MANILA, Philippines – It’s not easy being Philippine Airlines (PAL) these days. Former employees continue to protest its outsourcing program. An unfavorable Supreme Court ruling was recalled in favor of the flag carrier. Passengers complain about cancelled or delayed flights.
“We took a hit on the image,” admitted PAL president and chief operating officer Jaime Bautista, in a briefing for ABS-CBN News editors last Friday. “We have to work harder to get back the trust and confidence of the passengers.”
The Philippine Airlines Employees Association (PALEA) held a wildcat strike last September 27, forcing the company to cancel its international and domestic flights which affected some 14,000 passengers. Even after its outsourcing program was implemented on October 1, the airline continued to cancel flights due to the lack of manpower of the third-party service providers.
Now, more than two weeks into its outsourcing program, Bautista said PAL operations are getting back to normal, although with a lower number of flights.
PAL now has 95 published flights, of which 59 are international and 36 are domestic. This is compared to the pre-strike level of 140 flights a day.
Challenges
Aside from its labor problems, PAL continues to face several external challenges that are stifling its growth.
First, the US Federal Aviation Administration’s (FAA) downgrade of the Civil Aviation Authority of the Philippines (CAAP) to Category 2 and the European Commission decision to ban in 2010 all Philippine carriers from operating in member-countries of the European Union.
Bautista said the FAA issued the downgrade because of its audit findings that CAAP was not technically equipped to supervise airport operations. This has prevented PAL from increasing its flights to the US and from adding new routes in the US.
“It’s very unfair for PAL because other US carriers can mount as many flights as they want… Hawaiian Airlines now flies more to Honolulu-Manila than PAL. We want more frequencies to Hawaii and Guam, but we can’t,” he said.
PAL asked the FAA if they can allow the substitution of planes, so it can use the B777-300ER for its US flights but it was denied. “It wsa denied because they said it was a new technology and they had no confidence CAAP has the people to do oversight for this new technology and plane,” he said.
As for the EU placing Philippine carriers on a blacklist, Bautista said this has affected not just PAL’s sales in Europe, but also lessened business for the tourism industry.
“PAL is a certified safe airline. It is the only Philippine carrier that has an IOSA (IATA Operational Safety Audit) certification… The US, EU and IOSA acknowledge that PAL is safe, but it sees the deficiencies in CAAP,” he said.
“We comply with all the safety regulations of the CAAP and all regulatory agencies of countries where we operate. The airline industry is heavily regulated. We can’t not comply with the regulations. We always pass the audit and inspection. For PAL, safety is always number 1,” Bautista emphasized.
Overburdened NAIA
Another challenge for PAL is the severe runway limitations at the Ninoy Aquino International Airport (NAIA). For an airport, the safe limit is 36 take-offs/landings per hour, but NAIA is pushing the maximum of 54 take-offs/landings per hour.
“It is difficult to get slots… Plus only the international flights are coordinated. There is no slot coordination for domestic flights, considering 51% of the flights in NAIA are domestic,” Bautista said.
Aside from this, there are also severe infrastructure and facilities constraints at the NAIA, such as congestion at its terminals, as well as danger from bird strikes.
PAL sees the problem getting worse, not better, with more foreign carriers allowed to increase flights.
“Because of these problems, Philippine carriers are hurt the most because Manila is our home base,” the PAL president said.
source: http://www.abs-cbnnews.com
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