I am so not a lover of the Supreme Court at all. Honest, I don’t totally hate them, just sickened by their antics and their superlative merchant spirit. If they’re in the mood, everything could absolutely be for sale, including their own mommy. (Of course daddy got auctioned one year and one day ago today.)
Right now, too much attention is focused on the issue of the recall of the Second Division of the Supreme Court (SC) resolution favoring the petition of dismissed members of the Philippine Air Lines Employees’ Association by the SC en banc. Thus, it should definitely be worth a few moments to look at the context of the case to see the bigger picture.
Philippine Air Lines – PAL, isn’t turning out huge profits although some people paint the airline to be making tons of money. For many years, I watched Brian Williams of NBC nightly news continuously reporting the slow death of airline companies in the U.S. Other broadcast stations abroad also reported this succession of airline companies going down one after another.
Indeed airlines have the highest operating costs compared to other industries. Due to worldwide recession, international travel and exports are at their record lowest. Stability and profitability are beyond reach as people take less leisure trips – indubitably a luxury – so revenues remain at significant lows than during the better years. The global financial crisis of the past and in recent times, 2008, caused all of these.
Yes, three years and several worldwide high-profile layoffs, business closures and money market meltdowns later, people are still wary of non-essential spending. Business travel slumped, as companies scaled back on spending in this area and in 2012, even import-export activities will suffer considerably.
The bottom line is the key to any profit-oriented company. Higher figures are essential, not for any sort of imaginary bragging rights, but because turning a profit (and the higher, the better, of course) is actually the raison d’être. This does not, however, take away from the other aspects, such as providing service in this case. Nevertheless, no business entity in its right mind would want to operate at a loss. Further, remaining barely in the black is a concept that just doesn’t make much sense.
With these in mind, what is PAL to do when faced with the various challenges? Like many other organizations that were or are in the same situation, the most simple-but-effective answer is: streamline. Among the results of this was Plan 14, formulated in 1998, in which the fleet would be reduced from 54 to 14 airplanes. The laying off of 5,000 employees (including 1,400 cabin crew) was an unfortunate but necessary consequence, as there would then be much more personnel than necessary.
At this point it is imperative to note that among the notable events of 1998 was the Asian Financial Crisis that wreaked havoc on many countries around the world, the Philippines included. At this time, PAL incurred PhP90 billion in liabilities, or PhP5 billion more than its assets. Needless to say, this was not a desirable state for the company to be in.
In addition, PAL is also looking to outsourcing for cost relief. In the same way that companies look towards lower expenditures, many operational components could be handled capably by contracted third parties. This entails relinquishing a certain amount of direct control however it promises benefits on the budget side compared to full vertical alignment. Constant evaluation ensures that things are done the way they should be and at a high satisfaction level.
Streamlining, whether by cutting operations, relying on outsourcing or other methods, can enable a company to stay afloat in a sea of troubles. It seems more than a little unfair to point a finger at PAL and say that it is representative of how Big Business in the Philippines casually tramples over the rights of workers.
Survival is the key; doing what is needed may often not be pretty, but going under is downright ugly. Imagine the job loss if the company shuttered its operations.
Reforms at PAL should have come decades ago. There is no way to confirm it but the word from the inside is that many important personnel of PAL have gone wayward, getting enmeshed in unconventional forms of making money on the side through smuggling – a dangerous game such as it is since we are living in dangerous times.
On the other hand, certain career officials of PAL strive to keep these personnel in place – despite that many of them are political accommodations. That means those personnel were not wholly qualified nor competent to be in their present posts.
That’s the reason why no one cares if the company goes decrepit, its facilities are rotting and customers suffer beyond the airline’s shame. My friends and classmates have all left PAL for other airlines. All of them rose to high positions in Cathay, Lufthansa, Saudia, Cebu Pacific, Northwest, among many other airlines – you bet they should be very conscientious in their jobs or else they’d have been retrenched too.