Wednesday, September 28, 2011

Philippines Airlines: A sign of Filipino management failure

Last Tuesday's wild cat strike by the employees of Philippine Airlines has been depressing and distressful to its passengers, foreigners and locals.

What happened here, what is going on?

Let us study PAL's history for a minute:

Philippine Airlines is one of oldest airlines in Asia, established in 1941. It is quite good in the early days. But due to the Asian Financial crisis in 1997, PAL almost hit rock bottom. Poor management, overspending, and frequent re-shuffling of its employees created huge losses amidst together with the Financial Crisis. One of the biggest well known strike were held in 1998 led PAL to shut down its operations. Foreign businesses, stakeholders, and investors wanted to save the airline but were turned off by this frequent labor disputes.

PAL has been looking for some strategic partners earlier up to now. Before, Cathay Pacific has shown interest, but the airline is still weak from its knees, and its management tried again to manage it itself, and acquired a big loan from SEC (Securities & Exchange Commission)  to continue its operations and hopefully make some profit. But there is a catch, this agreement (they call it 'receivership') will end on 2007. SEC is like the 'umbilical cord' to PAL. PAL rebounded and increased its routes to major airports around the world.

Year 2007 ended and now 'all hell broke loose.' Mismanagement, overspending is there again (PAL is buying a lot of airplanes wherein they are short of pilots, crew, and staff), and frequent disputes from its employees, in which they formed a union called PAL Employees Association (PALEA).

PALEA's demand are simple, better pay, good benefits and job security. But PAL cannot give these as it is trying to recover its losses earlier. It was a 'stale-mate.'

Frequent labor disputes are present from then on, and PAL has decided mass contractualization of its employees. In 2010, some of PAL pilots left their jobs permanently without any information.

Now we all know its story. As an ordinary passenger what we will do then? I think you know that already. By avoiding PAL at all costs to avoid any delays in your schedule. This will be a continuous cycle until a major revamp has been established. The company is in distress and it will take some time and effort to bring back its reputation. Other airlines offer cheaper fares anyway.

This is a sign that a Filipino cannot manage a company in its entirety. That is why other nationalities like Chinese, Europeans, Americans, even Indians are preferred in managing day to day operations of a business.
A major installation like an airport requires utmost care and precision. If someone could not do it - then leave. Better than making matters worse for thousands of passengers.

1 comment:

  1. They outsourced many of their flights na. I was going to book a flight with them to boracay.

    I was surprised to see that airphil is flying for them. Really PAL?

    Booked with CebuPac instead.