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Philippine Airlines requires USD230m p/a

28-Sep-2010 10:46 AM

Philippine Airlines stated it is important for it to cut jobs and outsource non-core units as it requires USD230 million in capital p/a, 50% of which must come from cost savings (Manila Bulletin/Philippine Daily Inquirer, 27-Sep-2010). The remainder of the capital is to be raised from cash generation activities, such as sales and marketing. The carrier stated all departments need to become more cost efficient following the global financial downturn and other factors, and a reduction in cabin crew is just one of many cost cutting measures. PAL added it is still adhering to its survival plan developed after reporting more than USD312 million in losses over the past two years, despite better than expected traffic results in 1H2010.

Philippine Airlines: “The cabin crew union demands that funds saved from manpower reduction should be equally divided among them. But this, unfortunately, is not the aim of the whole exercise. If we heed their call to give them the savings, we may have satisfied crew members today but no airline to speak of in the long term … Contrary to the cabin crew union’s claim, there has been no diminution of employee rights or benefits. They work a little bit more for the same pay, which simply means more efficiency. Estimated savings from crew reduction as measured by our Cabin Services is about PHP70 million [USD1.6 million] a year, not PHP141 million [USD3.2 million] as claimed by the Flight Attendants' and Stewards' Association of the Philippines,” Cielo Villaluna, Spokesperson. Source: Manila Bulletin, 27-Sep-2010.