PAL confirms it’s cutting 35 percent of workforce, or 2,700 employees, before end of 2020

MANILA, Philippines—Philippine Airlines (PAL) confirmed it is reducing its workforce by up to 35 percent as part of a restructuring and recovery plan to survive the COVID-19 pandemic and the slow recovery of the airline industry.

In a statement released late on Monday (Oct. 5), the flag carrier said the manpower reduction combines voluntary and involuntary measures to be implemented in the fourth quarter of 2020.

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

The Inquirer reported last week that PAL told employees it planned to retire and lay off over a third of its workforce across the board, including ground personnel and cabin crew. This will impact some 2,700 of PAL and Air Philippines Corp.’s more than 7,800 employees.

The manpower reduction will be carried out until late November or early December this year, Inquirer sources said.

PAL said shareholders have infused additional capital to allow continued operations. Its shareholders included owner and billionaire Lucio Tan as well as ANA Holdings of Japan.

“At the height of the pandemic, PAL chose to implement temporary furloughs and flexible working arrangements to maintain jobs as long as possible,” the airline said in its statement.

“However, the collapse in travel demand and persistent travel restrictions on most global and domestic routes have made retrenchment inevitable, with PAL currently operating less than 15 percent of its normal number of daily flights after eight months of lockdowns,” it added.

PAL indicated it was in the process of rebuilding its domestic and international network. Still, estimates across the industry led by the International Air Transport Association do not paint a rosy picture for the industry’s recovery for at least a few more years.

PAL said it has also suspended capital expenditures, which are mainly for acquisition of new aircraft. It also put in place a skeletal work force and reduced management salaries and non-essential expenses.

PAL said it continued to mount special repatriation flights to help bring home stranded Filipinos from the Middle East, Europe, North America and all over Asia. It is also flying all-cargo services to meet the essential cargo transport needs of the public and support economic supply chains.

“PAL recently flew its second repatriation flight from Beirut carrying OFWs fleeing the troubled Lebanese capital,” it said in the statement.