No quick fix for PAL
AS I WRECK THIS CHAIR By William M. Esposo
The Philippine Star 2010-08-05

Philippine Airlines (PAL) is by no means the only major airline company in the world that has been encountering severe problems. There are many airline companies that are in a worse situation compared to PAL. 

Ever since the 9/11 terror attack in New York City, it has been a very bumpy ride for the airline industry. Air travel and revenues naturally plummeted worldwide. Some airlines had been so badly affected and were eventually permanently grounded or taken over.  

Just when the bad effects of the 9/11 terror attack appeared to have been overcome – the global economic crisis resulting from the US sub-prime mess exploded. The world is still recovering from that crisis. 

Thus, the present problem of grounded PAL flights owing to the sudden resignations of some of their pilots should not be simply seen as a labor-management row which can be addressed by a good mediator. President Noynoy Aquino (P-Noy), with all the goodwill he currently enjoys, might find it difficult to fix the PAL row even if he personally mediates between PAL and the pilots.

It is a fact that in recent years PAL has been losing money. In the airline business, a downward spiral with continued losses over several years equates to mega financial bleeding. Placed in a desperate situation, companies are forced to resort to desperate measures. In most cases, desperate measures include the unpopular cost cutting.

The core problem of the PAL row is the better remuneration other airline companies can offer the PAL pilots. The PAL pilots resigned because another airline firm gave them an offer they cannot refuse. In our reality of ever rising prices, nobody can blame a pilot who will seek to provide a better life for his family.

PAL President Jaime Bautista stated on an ANC interview last Tuesday with Karen Davila on her “Headstart” morning show that the pilots resigned without honoring their agreement to provide PAL with enough time to recruit substitute pilots. PAL had threatened to sue the resigned pilots over that issue.

There were other issues that were raised in media other than the resignations sans the agreed lead time. Among these were the issues on the forced retirement of PAL cabin crew members upon reaching the age of 40 years, the alleged lesser staff assigned to each flight which translates to overworked staff and the alleged long service hours of the PAL flight crews.

Bautista clarified that the forced retirement of the cabin crew members only covered those who were hired after the 2001 CBA (Collective Bargaining Agreement) where this was agreed upon and signed. The PAL President also explained that compared to world flight staff size standards, the PAL flight crews were ahead by one more flight staffer. He also mentioned that compared to the world standard of 100 working hours per month per flight crew staffer, the PAL flight crew members only worked 70 hours a month.

In a Tuesday noon time phone interview on ANC with Dateline Philippines anchors Tony Velasquez and Pinky Webb, Transportation and Communications Secretary Jose “Ping” de Jesus explained the government’s interest in settling the PAL row. Sec. Ping de Jesus mentioned that PAL is imbued with public interest. A disruption of PAL operations impacts on trade and commerce, tourism, air transport and tarnishes the image of the country itself. 

Ping admitted that the government really does not have too many options to play in attempting to settle the PAL row. Of course, the last thing the government would want to do is to operate the airline company again. P-Noy would not want to reverse one of the wise decisions his late mother Cory made during her presidency which is to privatize PAL.

Tourism Secretary Bertie Lim is eyeing the long proposed adoption of the controversial Open Skies Policy. That would require a serious deliberation. ANC anchor Tony Velasquez correctly called the Open Skies Policy as something that can accelerate tourism but also accelerate the demise of PAL.

Actually, there are other issues that must be considered with the possible adoption of the Open Skies Policy. This is not simply a case of whether we do not want PAL to exist anymore. The considerations extend beyond the needs of tourism.

People are mistaken when they think that the Open Skies Policy was never adopted because of the political clout of Taipan Lucio Tan. If the Open Skies Policy was really that beneficial to our country, there was no way Lucio Tan could have prevented its adoption. That the Open Skies Policy was never adopted would indicate that neither the previous administrations nor Opposition were convinced that the policy is good for the country.

Without a PAL around, we could be without a local factor to keep the foreign airline firms in check especially in the area of pricing. The sooner the present PAL difficulties are normalized, the better. What remains to be done is to seek a more lasting and encompassing solution to the many big and complex problems PAL faces. Whether we like Lucio Tan or not, the fact is PAL is part of the Philippine national interest.

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