Lucio Tan offers voluntary separation to thousands of PAL employees

Philippine Airlines is urging employees to consider voluntary separation as it plans to cut 2,450 ground-based staff and management team as it aligns its business with the sharp downfall in air travel wrought by the Covid-19 pandemic.

PAL, with 7,000 employees, said it needs to right size its workforce as it continues to grapple with the effects of the virus.

The first stage of PAL’s manpower reduction program, which will be carried out in the fourth quarter, is seen to affect 35% of the airline’s total employees.

Since March this year, PAL has frozen capital expenditures, adopted a skeletal work force, slashed management salaries and non-essential expenses to control costs.

PAL earlier admitted it was on the cusp of bankruptcy even after its majority owner, bilyonaryo Lucio Tan injected P16 billion in cash into the airline, which posted P18 billion in losses in the past three years.

“At the height of the pandemic, PAL chose to implement temporary furloughs and flexible working arrangements to maintain jobs as long as possible. However, the collapse in travel demand and persistent travel restrictions on most global and domestic routes have made retrenchment inevitable, with PAL currently operating less than 15% of its normal number of daily flights after eight months of lockdowns,” the flag carrier said.

Nevertheless, PAL assured its employees that retrenchment program would be carried out in a fair manner that complies with all legal requirements.

Last year, PAL racked up record losses of P10.2 billion, more than three times the P2.84 billion loss recorded in 2018. In 2017, the airline incurred P4.61 billion in losses.

Its total liabilities likewise jumped 66% to P312.9 billion as PAL loaded up on long-term debt by 123 percent to P210.34 billion.

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