Weak outlook forces Philippine Airlines to cut jobs, flights
09/30/2009 | 07:02 PM
Philippine Airlines (PAL) will lay off workers and reduce flights, a month after it raised the possibility of cutting employment and service due to its weaker financial outlook. See report here.
To further cut costs, the company intends to outsource non-core businesses such as catering and cut the number of its security personnel nationwide, PAL president Jaime Bautista said during PAL Holdings Inc.'s stockholders' meeting.
Moreover, to curb effects of the current global slowdown, the company has "tapped new traffic schemes" and "redeployed underperforming flight frequencies onto other routes."
PAL also "deferred all non-essential capital spending, suspended all non-essential programs, and cut fixed operating expenses," Bautista said.
First quarter operations are "not encouraging," Bautista told reporters, referring to its fiscal period that begins in April.
Net income from April to June this year reached $35.5 million, $9.6 million lower than profit posted during the same period last year, executives announced during PAL Holdings Inc.'s stockholders' meeting.
Revenues reached $394 million, 12 percent lower than the $446.9 million reported during the same period last year.
"The situation we are facing is very serious and your management has taken initiatives to further reduce costs and also increase revenues," Bautista said.
Besides cutting down its workforce by anywhere from seven to ten percent, PAL will also reduce seat and flight capacities by seven percent.
Flight capacities for US and Australia have already been cut by five to seven percent, Bautista added.
As of end-March this year, the airline employed 8,052. Of this number, 472 were pilots while 1,593 were cabin crew.
Employees were given until October 31 to accept retirement packages. Management will undertake a rationalization program anytime after that.
Moreover, Bautista said that the company is now "in the second quarter of what appears to be an extremely difficult year."
"This current fiscal year still shows no signs of recovery," he added.
The company expects to post losses during its second quarter due to weak international demand.
Bautista also projected a flat passenger growth this year to nine million from 8.5 million passengers last year.
A better performance is expected this year but it will still be a "net loss," Bautista said.
For its fiscal year ending March this year, PAL posted a net loss of $301 million from a net profit of $30.6 million in the fiscal year ending March 2008. - GMANews.TV
To further cut costs, the company intends to outsource non-core businesses such as catering and cut the number of its security personnel nationwide, PAL president Jaime Bautista said during PAL Holdings Inc.'s stockholders' meeting.
Moreover, to curb effects of the current global slowdown, the company has "tapped new traffic schemes" and "redeployed underperforming flight frequencies onto other routes."
PAL also "deferred all non-essential capital spending, suspended all non-essential programs, and cut fixed operating expenses," Bautista said.
First quarter operations are "not encouraging," Bautista told reporters, referring to its fiscal period that begins in April.
Net income from April to June this year reached $35.5 million, $9.6 million lower than profit posted during the same period last year, executives announced during PAL Holdings Inc.'s stockholders' meeting.
Revenues reached $394 million, 12 percent lower than the $446.9 million reported during the same period last year.
"The situation we are facing is very serious and your management has taken initiatives to further reduce costs and also increase revenues," Bautista said.
Besides cutting down its workforce by anywhere from seven to ten percent, PAL will also reduce seat and flight capacities by seven percent.
Flight capacities for US and Australia have already been cut by five to seven percent, Bautista added.
As of end-March this year, the airline employed 8,052. Of this number, 472 were pilots while 1,593 were cabin crew.
Employees were given until October 31 to accept retirement packages. Management will undertake a rationalization program anytime after that.
Moreover, Bautista said that the company is now "in the second quarter of what appears to be an extremely difficult year."
"This current fiscal year still shows no signs of recovery," he added.
The company expects to post losses during its second quarter due to weak international demand.
Bautista also projected a flat passenger growth this year to nine million from 8.5 million passengers last year.
A better performance is expected this year but it will still be a "net loss," Bautista said.
For its fiscal year ending March this year, PAL posted a net loss of $301 million from a net profit of $30.6 million in the fiscal year ending March 2008. - GMANews.TV
