PAL lays off over 2,000 employees

MANILA, Philippines — Flag carrier Philippine Airlines (PAL) will lay off over 2,000 employees this month as its comprehensive financial restructuring is set to be under way soon, its president Gilbert Santa Maria said.

In a letter sent to PAL employees on Monday, a copy of which was seen by The STAR, Santa Maria said the company would carry out close to 1,000 voluntary and 1,100 involuntary separations across all departments this month.

By the time the process is complete, he said, PAL would have separated a total of 2,700 employees or 35 percent of its workforce, including departures such as resignations.

In a statement yesterday, PAL said affected personnel would continue to be employed until mid-March.

Prior to the retrenchment, PAL said it chose to implement temporary furloughs and flexible working arrangements to hold off job cuts as long as possible and ensure that its employees continued to receive salaries and benefits, particularly medical benefits, during the height of the pandemic.

“Philippine Airlines is a long way from full recovery, but we have started the process and must see it through. Much work has already been done, but to complete the restructuring of our enterprise and ensure its survival we now have to take the painful, but necessary action of completing the manpower reduction plan that we started last October with the announcement of a voluntary separation program,” Santa Maria said.

The PAL official said “difficult decisions and painstaking preparations” have been reached and made to ensure that all the resources are available to fully discharge its obligations to those who will leave the company.

“We began 2021 with the slow and hopeful recovery of our domestic and international flight demand, although some of the traffic growth had been tempered by fresh travel restrictions imposed by the Philippines, the US, and several countries in reaction to the new virus strain first identified in the UK,” Santa Maria said.

Santa Maria assured employees that the company is doing its best “to keep Philippine Airlines in the air.”

He said PAL’s comprehensive restructuring, which marks the next phase of its recovery journey, would soon be under way.

“There will be more to report to you on these developments in the coming weeks,” he said.

PAL intends to seek court protection from creditors as it undertakes debt restructuring as part of ongoing efforts to ensure the airline’s survival, with a Chapter 11 filing in the US among the considerations.

The airline has appointed the prestigious international law firm Norton Rose Fulbright as airline counsel for its restructuring.

“Philippine Airlines management and stakeholders remain committed to find the necessary solutions that will enable the company to emerge financially stronger and secure,” PAL spokesperson Cielo Villaluna earlier said.

PAL saw its losses swell further to P29.03 billion in the nine months ending September last year as operations continued to be severely affected by global travel restrictions due to the COVID-19 outbreak.

PAL’s 2020 and 2021 aircraft deliveries were postponed and rescheduled for delivery in 2022 to 2025.

PAL has assured its customers and partners that current operations would continue without disruptions.

The airline said it would continue to gradually increase international and domestic flights as demand recovers.