Philippines Airlines Inc is the Philippines largest air courier which is currently looking to fail to return to profit after losing 25 pilots. The pilots quit for better paying jobs overseas which has caused flight cancellations. Another sign of how the Philippines OFW market can disrupt or damage local markets. President Jaime Bautisca said “the pilot resignations are a poaching issue”. Parent company PAL holdings Inc. Tumbled 8% in Manila trading after the airline cancelled 22 flights over three days and the government called an emergency meeting with industry executives.
Most of the pilots will join Hong Kong Airlines Ltd. Due to being offered not only higher wages but better working conditions according to Elmer Pena (President of the Airline Pilots Association of the Philippines). The Airline began a recruitment drive due to expansion of its air fleet which has increased due to demand increases from the world’s most populated nation.
Philippines Air which is based in Manila will look to cut its loses after the resignations by reducing its domestic flight services. The company is controlled by billionaire Lucio Tan (also controls Tanduay). The Airline had expected to break even this year after posting its second straight loss in the twelve months ended on March 31st.
Its currently looking that the company will be forced to revise its targets, The carrier currently has 473 Pilots (including the 25 who quit). The airline has ordered the pilots that resigned back to work by August 8th.
The Philippines government is hopeful the dispute can be resolved according to Transport Secretary Jose De Jesus who stated such in a meeting in Manila after meeting with PAL and Cebu Air Inc. Officials will meet with some of the 25 pilots tomorrow in hope the matter will be resolved.
How much of a salary difference you may be asking. Airbus SAS A320 captains joining Hong Kong Air which is backed by China’s Hainan Province, will see a salary increase from around $7000 per month with an income tax of 32%. To a salary of around $17,000 a month with 15% tax. I can’t see how this matter will be resolved with meetings as I can’t see any reason the pilots would want to remain on a financial front. Cebu Pacific will also lose 3 pilots to Hong Kong Airlines who pay less than Philippines Air.
Cebu Air President Lance Gokongwei declined to comment on departures. Transport undersecretary Dante Velasco said the company may be losing pilots.
Hong Kong Air is expanding its fleet and planning flight expansion to other destinations such as Istanbul, Tokyo and Paris as it looks to challenge Cathy Pacific Airways Ltd. The company has ordered 53 Airbus aircraft according to Airbus’s website.
Another blow that can happen shortly is that Philippines cabin crew may also go out on strike within the next two weeks due to staffing level issues. The airline reported a net loss of $14.3 million for the year ending march. Revenue has fallen to $1.4 billion from $1.6 billion.1998 pilots strike led the carrier to suspend debt payments until Tan added $200 million to his investment.