PAL faces biggest challenge since World War II

Valentine’s Day of 1946 was a historic day for Philippine Airlines.

On that day, PAL resumed operations with five Douglas DC-3 –touted as the greatest airplane of its time and a payroll of 108 names, after a five-year hiatus because of World War II, so say historical accounts.

Before the war, on Feb. 26, 1941, the airline was formally incorporated by a group of industrialists led by Andres Soriano Sr. In December of the same year, war broke and interrupted PAL’s birth as Asia’s first airline.

The war, which lasted from 1941 to 1945, left Manila in shambles and the airport, Nielson Field in Makati, was heavily damaged. PAL had to spend over P1 million – an unimaginable amount at the time – to refurbish it but the airline, which was nationalized, persevered and survived.

The rest, as they say, is history.

Another war

Today, nearly 80 years later, PAL is facing another war, the coronavirus disease 2019 or COVID-19 pandemic, which it considers its biggest challenge since World War II.

“In our nearly 80 years of service to the world, PAL has never experienced a complete disruption of this scale, with the exception of World War II. The challenges are immense, but we can only ask for the cooperation and support of all our valued customers, our partners in government and the transport and tourism industry, and our family of PAL personnel, as we devote our energies to recovery and a gradual restoration of our flights and network,” PAL said in a letter to passengers.

PAL is doing everything it can to survive.

Its 85-year old chairman, taipan Lucio Tan is keeping safe in his sprawling home somewhere in Metro Manila, but he continues to think of ways so that his beloved flag-carrier survives.

From petitioning government for support to taking pay cuts for senior officials, PAL’s management team led by its president Gilbert Santa Maria is implementing several measures as mandated by Kapitan.

The company also has plans to resume flights in the coming weeks but these would be limited, PAL said in its letter.

PAL’s plans are highly subject to change, depending on a number of crucial factors related to the COVID-19 outbreak such as the status of relevant travel bans and restrictions imposed by various governments and the public health and safety situation.

PAL will resume limited flights in May, but there will still be no flights to Auckland, New York JFK, Dubai, Doha, Perth, Melbourne, Port Moresby, and Sapporo.

Domestic flights will also be limited.

Other urgent measures

For PAL employees, Santa Maria assured them that PAL is doing its best to survive: “With the expressed mandate from our chairman and our board, we are taking urgent action to ensure the continuity of our business while also responding to the needs of our customers and employees.”

Measures include negotiating with aircraft lessors and other suppliers to defer payment while the fleet is grounded.

Together with other airlines, such as Gokongwei-owned Cebu Pacific and Romero-led Air Asia, PAL is also asking for government support similar to the assistance extended by other governments to their hard-hit airlines.

PAL is also in talks with banks to unfreeze credit lines. The company’s senior leaders also agreed to take a pay cut and a reduction in benefits.

It is also encouraging employees to go on leave without pay while others with nonessential roles are placed on leave with the proper entitlements, a move allowed by the labor department to enable companies to deal with business interruption brought about by the pandemic.

PAL will also advance the 13th month pay of its employees on April 15 for the first tranche and then the remaining half on June 15.

Like other airlines, PAL is facing severe cash burn as some passengers are seeking refunds.

Indeed, PAL is facing the most turbulent of skies.

But its chairman Kapitan is a quintessential survivor and his multi-billion business empire has successfully survived many difficult periods in the country’s history.

He is now the lone surviving ethnic Filipino-Chinese taipan in the country. He is also a survivor of World War II and he used to tell his children stories of hardships from that time, of whatever he remembered about it as a young boy, and how he was able to rise above the challenges. Would he be able to apply the lessons to his own carrier?

Will PAL survive the pandemic just as it survived World War II?

Your guess is as good as mine.

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com