Palace dismisses union appeal vs PAL outsourcing

MALACAÑANG yesterday affirmed a decision to support Philippine Airlines’ (PAL) outsourcing plans, rejecting a union appeal.

The decision came as the flag carrier announced a loss of $10.6 million for the quarter ending in June, which it blamed on increasing fuel prices and events abroad.

Earlier this year, the Palace said that an October 2010 Labor department decision allowing the flag carrier to implement the plan — in the process laying off some 2,600 workers — should be upheld.

The PAL Employees’ Association (PALEA) appealed but Executive Secretary Paquito N. Ochoa, Jr., in an August 11 resolution, said: “the points raised by petitioner in its Motion for Reconsideration are a mere rehash of those considered, discussed and ruled upon by the Secretary of Labor … and affirmed in our decision dated March 25”.

“[T]his office, taking into account the national interest involved and the interest of labor, took a fresh look thereat and reviewed our findings, but found nothing erroneous and unlawful in the aforementioned decision,” Mr. Ochoa added.

PALEA, whose officials were not immediately available for comment, had claimed that the Office of the President erred in ruling that PAL could contract out inflight catering, airport services and call center reservations; that the consequent retrenchments were valid; and that the airline was not liable for unfair labor practices.

A PAL spokesperson declined to comment as the airline had yet to receive a copy of the Palace decision.

With regard to the $10.6-million loss, a PAL statement said it was due to “significant increases in fuel prices and other factors like political turmoil in the Middle East and North Africa, and natural calamities like the Japan earthquake and tsunami,” PAL said.

“Jet fuel costs alone, which is the airline’s biggest expense item, amounted to US$210.8 million, up by US$56.2 million or 36% from the year ago level of US$154.6 million,” PAL said.

Operating revenues rose by 6% to $454.1 million during the first quarter of its fiscal year beginning April from the same period last year, the airline reported. Passenger yields were up 9% but passenger traffic declined by 7%.

Operating expenses, meanwhile increased by 18% to $464.7 million.

Shares of PAL Holdings, Inc., the carrier’s majority shareholder closed 5.18% or P0.32 higher at P6.50 apiece yesterday. — Kathleen A. Martin, Businessworld