Pandemic woes force PAL to cut jobs by 35% in Q4

MANILA, Philippines — Philippine Airlines (PAL) is letting go over a third of its more than 7,000 employees this quarter as the economic reopening did little to salvage the airline from financial distress.

In a statement Monday evening, the flag carrier said it is reducing workforce by “up to 35%” either voluntarily of by laying them off. The “first stage” of downsizing already started with a call for employees to file “voluntary separation.”

It was not clear from the statement how long the offer to voluntary leave the Tan-led firm will last, but Nikkei Asia reported last week that the next stage would involve “compulsory terminations.”

“The retrenchment is part of a larger restructuring and recovery plan as the flag carrier rebuilds its domestic and international network amid the pandemic,” PAL said. Shares at PAL Holdings Inc., the airline’s holding firm, closed up 2.65% at P5.80 apiece early Monday.

Similar with other airlines, PAL endured a lingering financial damage from the pandemic that swept the globe beginning March, triggering travel restrictions and lockdowns that directly hit the aviation industry.

Unlike smaller carriers however, the flag carrier said it tried to avert letting go of workers by initially adopting a skeletal workforce and cutting down salaries of top executive to save costs. Capital investments were also drastically slashed, all while shareholders infused cash into the company to keep liquidity flowing.

But efforts were proven not enough, PAL said. “The collapse in travel demand and persistent travel restrictions on most global and domestic routes have made retrenchment inevitable,” it explained.

In the first quarter, PAL’s listed parent said the airline’s total comprehensive loss widened to P10.72 billion from only P60.81 million in the same period last year. The government has partially allowed flights since June, but PAL said “less than 15%” of its normal number of daily flights are operating to date.

In the same statement, PAL assured affected employees that “measures will be carried out in a fair manner that complies with all legal requirements and with support for outplacement assistance.”

The airline also said it will continue mounting repatriation flights to bring home displaced Filipino migrant workers.