Green light for PAL cost cutting
21 / 06 / 2010
PHILIPPINE Airlines (PAL) has the go ahead to start a massive outsourcing programme to cut costs, after the government ruled against employee opposition.
“We welcome the decision insofar as it recognises PAL’s financial troubles and the need to spin-off non-core services as part of its survival strategy,” PAL said in a statement.
Those units that will be affected are cargo and ground handling, which will be outsourced to Sky Logistics, in-flight catering and call centre reservations.
The cuts will lead to the current workforce being slashed from 7,500 down to 4,000 at a saving of up to US$22 million a year.
“PAL must now focus on the tough challenge of surviving the crisis and competing amidst a difficult operating environment. To do this, PAL must implement various revenue enhancement and cost-control initiatives that include outsourcing,” the airline added.
The unions have vowed to fight the decision.