PAL lays off 117 workers, outsources services

The affected employees will receive a separation package of 125% of monthly basic salary per year of service and a gratuity pay of P100,000

MANILA, Philippines — The country’s flag carrier Philippine Airlines (PAL) has decided to outsource its non-core businesses like ground handling, resulting in laying off 117 employees.

The shake-up comes amid a restructuring program, which PAL said would “improve business efficiency.”

The airline, which is led by business tycoon Lucio Tan, said the “recently undertaken business restructuring of domestic stations” will result in “more efficient air services that will benefit the riding public.”

Tan is the country’s 4th-richest man, according to Forbes magazine.

PAL said the objective of this restructuring is to focus on its core business to remain competitive in the aviation market. (READ: Clipping PAL’s ‘too many wings’)

“PAL will disengage from non-core services such as our ground handling activities in domestic stations which can be turned over to qualified third party service providers,” a company insider said in an email exchange with Rappler on Thursday, September 3.

The 117 affected employees, according to PAL, represent about 2% of its total workforce.

“The affected employees have been given their notice of separation, which will take effect on November 9, 2015. They will receive a separation package of 125% of monthly basic salary per year of service and a gratuity pay of P100,000 ($2,135),” PAL said.

During the January-to-July period, PAL told the local bourse that it posted a $138-million (P6.4-billion) net income. Although the second quarter financials were not available, PAL registered an $85 million profit in the 3 months ending March, allowing it to remain profitable for a second straight quarter.

Buoyed by a strong showing in the first half of the year, PAL expects to improve on its recent return to profitability in 2015 even as the lean season sets in, its president Jaime Bautista said in August.

“We’re expecting a profitable year because we have already reported a net income of $138 million (P6.45 billion) from January to July of this year. This is much higher than the figure from the period last year so it’s already a big improvement,” Bautista said at the airline’s general stockholders meeting on August 27. – Rappler.com

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