The Philippine Airlines says that it will proceed with the airline’s planned restructuring after the Department of Labor and Employment nixed employees’ opposition and said that it is management’s prerogative to outsource its key operations. The PAL also said that they welcome the decision insofar as it insofar as it recognizes PAL’s financial troubles and the need to spin-off non-core services as part of its survival strategy. The impinged units are in-flight catering services, airport services and call center reservations. The spin off will entail letting go some 3,500 out of its 7,500 workforce.
The planned retrenchment was originally set, however was deferred after DoLE believe jurisdiction over a simmering dispute between PAL management and its labor unions. The PAL had announced that it will outsource its call center reservations to ePLDT Ventus which would handle reservations, disruption handling, inquiries, bookings, back-office services and other call center services. The SkyKitchen Philippines, its catering services will be handled which is owned by businessman Manuel Osmeña. PAL’s cargo handling would be outsourced to Sky Logistics.
The PAL plans to downsize its medical, human resource units so that it can let go of 500 more employees and information technology. The cost-cutting measures would save the company about P500 million to P1 billion a year. PAL must now focus on the tough challenge of surviving the crisis and competing amidst a hard operating environment with the DoLE decision. The PAL must implement different revenue enhancement and cost control initiatives that includes outsourcing. The PAL is setting aside up to P2.5 billion to compensate the displace workers. The Philippines Airlines Employees’ Association blast DoLE’s midnight decision.
PALEA president and concurrent Partido ng Manggagawa vice-chairperson at the DoLE, Gerry Rivera said that if need, they are ready to elevate the case up to the Supreme Court. They maintain that contracting out is illegal. He said that the DoLE decision was released with the suspicious haste and preempted the ongoing mediation proceedings at the DoLE. The labor union will file a motion for reconsideration on or before June 28.
PAL was chosen as the best airline in the country for a second year in terms of flights and seat capacity operating out of the Ninoy Aquino International Airport (NAIA) by the Official Airline Guide in another development. The aviation ondustry’s main data keeper, showed that NAIA’s four terminals handled 1,859 flights in 2009 in the data from the OAG an increase of 12% over the 1,654 flights per week handled in 2008.
REFERENCE:
http://tcdn04.abs-cbnnews.com/business/06/21/10/pal-push-through-restructuring
