Philippine Airlines cuts down on flights

Third-party firms contracted by the airline will take over next month catering, ticketing and other ground handling functions previously held by 2,600 PAL workers that are being laid off.

The move is seen to cut the $10 million-$15 million in the airline’s annual service costs according to earlier reports.

“It is common knowledge that a sector of the ground union is protesting the spin-off so we expect inevitable minor kinks during this transition,” Ms. Villaluna said.

“Simply put, in the event of a work slowdown, the situation will still be at manageable levels with the reduction in flights,” she said.

The airline said it will flying less often between Manila to Cebu, Davao, Bacolod, Iloilo, Butuan, Cotabato, Cagayan de Oro, Dipolog, Kalibo, Laoag, Legazpi, Tacloban, Tagbilaran and Zamboanga.

Meanwhile, affected international routes include those from Manila to Hong Kong, Bangkok, New Delhi, Macau, Singapore, Los Angeles, Vancouver, Guam, Sydney and Melbourne.

Flight frequencies between Cebu and Incheon are also being reduced.

“Select” flights will be suspended in the next few days before resuming on varying dates in October and November, the carrier said further without elaborating.

It is also looking to merge some flights using bigger aircraft, the airline added.

The outsourcing is finally being implemented after Malacañang, in a resolution dated Aug. 11, affirmed an earlier decision meted out in March allowing the airline to retrench ground crew on certain compensation conditions.

In the meantime, PAL incurred a net loss of $10.6 million for the quarter ending in June from an income of $31.6 million in the same period last year, reportedly due to rising fuel costs and the global economic slowdown.

The airline is aiming for a modest profit for its 2011-2012 fiscal year ending in March, after raking in $72.5 million in the previous fiscal year.

Shares of PAL Holdings, Inc., the majority shareholder of PAL, fell by 4% to P5.94 apiece on Friday.