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Philippine Airlines begins major job-cutting program

Flag carrier aims to slash a third of its workforce due to pandemic blow

Philippine Airlines, like its peers around the world, has taken a severe blow from the coronavirus pandemic. (Photo by Ken Kobayashi)

MANILA -- Philippine Airlines on Thursday kicked off a major job-cutting program that could slash its workforce by more than a third, employees briefed on the matter told Nikkei Asia.

The drastic move reflects the deepening impact of the coronavirus pandemic and related travel restrictions on airlines across Asia.

In the first phase of the program the airline will seek voluntary resignations, while the second stage will involve compulsory terminations, airline officials told staff during virtual townhall meetings on Thursday. The program is expected to run through early December.

Philippine Airlines and its budget affiliate employ around 7,800 workers. Staff were informed in early September that the airline was considering a 21% to 38% reduction of its workforce.

The company is aiming to cut around 35% of jobs across all departments, according to the employees who spoke on condition of anonymity as well as materials from the meetings seen by Nikkei. A Philippine Airlines spokesperson was not immediately available for comment.

Airline officials stressed during the townhall meetings that the program was necessary for the company's survival and that it might take a few years for business to recover.

PAL Holdings, the airline's listed parent which is partly owned by Japan's ANA Holdings, reported 20.7 billion pesos ($427 million) in losses in the first half, from a 3 billion peso loss in the same period last year, as revenues plunged 54.7% to 36.8 billion pesos. In the April-June quarter -- which covered the most intense period of lockdown in the Philippines -- revenues fell 88.8% to 4.7 billion pesos.

Billionaire Lucio Tan, who controls the airline, had been forced to infuse billions of pesos in additional capital to keep it afloat, according to a stock exchange filing.

Philippine Airlines cut around 300 jobs in February. Cebu Air, a Philippine budget carrier, has also laid off 800 staff amid continuing travel restrictions due to the coronavirus pandemic.

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