LONDON – Philippine Airlines (PR) has launched a program that will see its workforce cut by around 35%. This represents around 2,700 employees at the airline.
It is understood that this program will last until the end of December this year. This is in response to the COVID-19 pandemic causing rolling lockdowns and travel bans overseas.
Demand at the carrier continues to be weak, even with domestic flight restrictions being lifted on a gradual basis. According to the Air Carriers Association in the Philippines, traffic for September was estimated to be 20% below pre-COVID-19 figures.
Positive Support in the Wake of Job Cuts?
According to Business Inquirer in the Philippines, one source had said that the President of the airline Gilbert Santa Maria (GSM) is doing a good job during the pandemic despite the job cuts. “Majority if not all think that GSM is doing a great job in navigating PAL through the stormy waters of this pandemic”.
This may have been seen as strange to some in the industry, especially with the retrenchment and early retirement programs PR is rolling out. The carrier was planning to use those two strategies on 20-40% of the 7,800-strong workforce at the carrier, including those at PAL Express (2P).
More Cuts Ahead?
According to the same source, PR Management stated that there was no guarantee that this will be the final set of layoffs, having made some earlier this year.
Recurring costs, such as aircraft maintenance and lease payments, is something that the airline is currently struggling with. PR is currently in talks with creditors and lessors in an effort to return aircraft back early to conserve costs further.
On top of this, the airline has processed around 80% of refunds, valued at P16B (US$330.1m). This has resulted in the owner of the PAL Group Lucio Tan to infuse a P6B (US$123.8m) investment just to keep the company afloat in these troubling times.
Heavy Losses During COVID-19
These cuts will have been seen as inevitable by those in the Philippines, as losses from January to June amassed P20B (US$412.7m). This is incredibly higher than the losses of P3.3B (US$68.1m) recorded in the first half of 2019.
It, therefore, represents a 606% increase in its losses, which gives the reasoning for Lucio Tan to have to inject money into the company. These come as desperate times for PR. Like with other carriers around the globe, it is hoping that the end of the year and the next will provide somewhat better pastures.
Featured Image: Philippine Airlines Boeing 777-300. Photo Credit: Wikimedia Commons