Airlines In The Philippines II

[Evodesire]

When the crisis has placed under control and air travel restrictions have been lifted, what changes do you see will happen in our airline industry? Do you think PAL will return some of those A321-200s? Well the deferment of delivery of aircraft is now quite obvious and a new wide body aircraft within the year won't happen anytime soon.

[Arianespace]

Some interesting facts happen at PAL Holdings meeting yesterday July 23.

For one, Viv and his half brother John G. Tan resigned from the Board less than a year from their post for  “personal reasons.”

Second, they withdraw their nomination as board members for cy 2020-2021. A nominee for independent director, Mark M. Chen, also backed out of the nomination. Patrick L. Go took Chen’s place as independent director.

Third, Lucio Tan took chairman, president, CEO and COO posts from Gilbert Sta. Maria.

Seating on the 11 man board are husband and wife Lucio and Carmen, son-in-laws Joseph T. Chua, Johnip G. Cua, Lucio “Hun Hun” C. Tan who is the son of Bong, Gregorio T. Yu, Gilbert Sta. Maria, and Ryuhei Maeda from ANA.

So what gives? We could be seeing belt tightening.

[Evodesire]

However, Gilbert is still President and COO of Philippine Airlines Inc., right?

[Arianespace]

Some more interesting insights:

PAL Shake-up: The saga continues

EYES WIDE OPEN
- Iris Gonzales
(The Philippine Star) -
July 27, 2020

Manila’s blue skies are empty and the control towers are quiet. But over at Lucio “Kapitan” Tan’s Philippine Airlines (PAL), the turbulence shows.

On Friday, Kapitan’s son Michael and daughter Vivienne (who are half-siblings), stepped down as members of the powerful board of directors of PAL.

Both agreed to leave the board to allow more professionals in the beleaguered flag carrier. Supposedly, this was what economic officials wanted before PAL could get some government support in this difficult time.

But that’s only half the story, multiple sources told me. I heard the siblings left the airline with heavy hearts.

Vivienne, sources say, really wanted to address PAL’s financial bleeding and plug the money leaks. In the process, she may have ruffled some feathers. And thus, some people may have wanted her out of the company.  Now she is no longer part of the board and management, sources say. But she will get a board seat in the smaller airline, Air Philippines.

During their last virtual board meeting on Thursday, Vivienne was quiet, says a source who was present during the meeting.

Michael, on the other hand, gave a farewell speech, the source says.

“He thanked PAL for the opportunity to serve, but he was sorry to leave PAL at a time of crisis,” the source adds.

Russia’s Rasputin

But as in the case of Vivienne, some people may have wanted Michael out of the company, too, sources say.

For instance, sources say, he was recently accused of disloyalty by – as the sources described – a Rasputin-like figure in the Tan empire.

Supposedly, so goes this Rasputin’s story, Michael disagreed with the transfer of PAL’s operations to Terminal III in the mid-2000, paving the way for the competitor to move into the terminal and grow.

But sources say it was not Michael, but Kapitan’s brothers (including the other MT - Mariano Tanenglian) who did not want PAL to transfer to Terminal III because the move entailed higher costs.

During the meeting on Thursday, Michael thanked his father for the chance to serve PAL in the last 15 years, says the source who was in that meeting.

The siblings, their representatives told me, declined to comment on the circumstances surrounding their departure.

Outside PAL, Michael is president of LT Group Inc. and Vivienne remains as director of various LT-owned companies.

What would Bong Tan do?

I wonder how different the situation would be if another Tan son, Lucio “Bong” Tan Jr. were still alive. A team player and a one-man-axis of power, Bong tried to keep the “peace” in the empire, always considering what’s good for the business and the employees.

He shared his father’s immense love for PAL, I sensed this during one of our last conversations. He and Michael had wanted to sell some of their father’s pricey real estate assets in China just to save the airline when it was already encountering financial trouble.

Japan’s All Nippon Airways

I wonder, too, how ANA is appreciating all that’s happening with the flag carrier. It acquired a 9.5 percent stake in PAL last year, enough to get a board seat.

“ANA is watching a telenovela,” says another source.

That’s an apt way of putting it, I guess – a boardroom telenovela unfolding before their eyes. No Nihongo subtitles needed.

I do hope PAL can ride through the turbulence and that with the boardroom changes, it would finally get help from the government.

While the government cannot afford to bail out the beleaguered carrier, some form of debt relief or liquidity assistance may be provided, tied to strict conditions. All stakeholders, including its owners, must share in the burden. And yes, the company must be professionalized.

But for sure, PAL needs help. And fast. At the end of the day, it is a private company heavily imbued with public interest.

In the time of COVID-19, for instance, even as it was bleeding, the flag carrier fetched thousands of stranded Filipinos all over the world and brought them home. It has likewise sent thousands of foreigners in the Philippines back to wherever their homes may be -- US, New Zealand, Canada and Australia.

Like frontliners, its crew members brave the risks to serve their fellow Filipinos and foreigners alike.
Asia’s oldest airline

Asia’s oldest airline

PAL is Asia’s oldest airline, even older than our government.

Born before World War II, the airline was formed by a group of industrialists led by Andres Soriano Sr. but then war broke and interrupted PAL’s takeoff as Asia’s first airline.

Today, nearly 80 years later, PAL is facing another war, the COVID-19 pandemic, which it considers its biggest challenge since World War II.

Sought for comment, PAL spokesperson Cielo Villaluna says:

“Philippine Airlines’s survival is the goal. Our stakeholders share the same goal. Internal cost control measures are being carried out. But government support is crucial – be it in the form of  long term credit facility, working capital credit lines, credit guarantee arrangements, and relief from airport charges.”

These, she adds, will help the flag carrier weather this turbulent period.

If the government decides to help, it really isn’t about bailing out a billionaire’s company; it is about helping an institution that has been serving Filipinos since its birth.

And this may be easier now that the edge-of-your seat boardroom drama is over. Well, at least for now and until the next Netflix-like Game of Tans season starts.

My take, I think the two vacant director post will end up with the government, GSIS and Landbank seats, after capital infusions, tailored similarly to IAG support by Boris Johnson. I won't be surprise anymore if this is where its heading. Cathay Pacific does it so why wouldn't we? After all, only PAL is the truly private carrier in ASEAN region.

[Arianespace]

And some more writings on the wall...

EYES WIDE OPEN

Iris Gonzales
(The Philippine Star)
August 3, 2020

PAL management announced it was looking to return 10 leased wide-bodied aircraft. These are the sleek and sexy, but more expensive wide-bodied Boeing-777 and the Airbus 330 and A350.

... some of the flag carrier’s over 1,000 pilots will be grounded for a long time, or let go altogether.

PAL offloads its excess baggage
Ripping through turbulent skies, Lucio Tan-owned Philippine Airlines (PAL) is getting rid of all the extra weight.

Clearly, PAL, which was already facing difficulties even before the coronavirus disease 2019 or COVID-19 pandemic disrupted global air travel, needs to do everything in its survival handbook to make it through this crisis.

In its town hall meeting on Thursday, insiders said PAL management announced it was looking to return 10 leased wide-bodied aircraft. These are the sleek and sexy, but more expensive wide-bodied Boeing-777 and the Airbus 330 and A350. PAL has a fleet of over 60 aircraft.

Desperate times call for desperate measures indeed.

The bad news that goes with that though is that it might mean some of the flag carrier’s over 1,000 pilots will be grounded for a long time, or let go altogether.

It’s still unclear how many pilots will be affected, but some of the leased aircraft need at least three pilots, insiders said.

The final decision will also depend on the destinations or flights where some of the leased aircraft are used. For example, flights to destinations that are not likely to pick up in the coming months may be scrapped and, thus, the wide-bodied carriers may not be needed anymore.

Aside from getting rid of the wide-bodied carriers, PAL may also continue to downsize, say insiders who attended the town hall meeting. Nothing is final yet, but management assured employees that it is doing everything it can so PAL will make it through this difficult time.

Carmen Tan steps down as vice chairman

The town hall meeting came on the heels of recent board changes, which are said to be part of PAL’s move to professionalize the organization.

Another change in the flag carrier is that Tan’s wife, Carmen, stepped down as vice chairman, management said in a letter to PAL employees last July 27.

“Ms. Carmen Tan stepped down as vice chairman and the position remains vacant,” PAL president and COO GIlbert Santa Maria said in the letter.

On behalf of management, Santa Maria also expressed “profound gratitude” to Tan’s son Michael and Tan’s daughter Vivienne, who both stepped down as directors of the powerful PAL board last July 23, “for their respective contributions to the stewardship of PAL through the years.”

Vivienne, employees were told, also quit her role as executive vice president-chief administrative officer of PAL effective July 23 and the position is left vacant.

Government support

Management said PAL is not out of the woods yet as some flights, which could have churned in revenue, did not push through.

“All told, we were only able to operate 123 regular flights in June, just 18 percent of our plan to mount 682 limited flights that month. These challenges did not deter us from operating 222 sweeper and repatriation flights and 640 all-cargo flights since March 2020,” Santa Maria said in the letter.

PAL also transported the remains of deceased overseas Filipinos from Saudi Arabia back home to their families, a testament to the flag carrier’s commitment “to enhance national interest and provide aid and comfort to Filipinos who are doing their duties as OFWs, medical frontliners, entrepreneurs, farmers and service workers.”

It continues to seek government support.

The letter did not specify what kind of support the company is asking, but airline industry players said the best option would be a grant or subsidy, either wage or landing fee subsidies; next would be a credit guarantee to private banks so they could lend to the struggling airlines; and the other option is capital infusion through equity or convertible debt.

Whichever type of government support PAL and other airlines will get, PAL’s roughly 6,000 employees are all hoping the company will survive the crisis.

One longtime PAL employee shared with me her sentiment: “This is our flag-carrier, our national pride. We don’t want to see it go down.”

[Evodesire]

How accurate is this? What I heard is 2 777, 3 A330, 4 A321.

Arianespace wrote

And some more writings on the wall...

EYES WIDE OPEN

Iris Gonzales
(The Philippine Star)
August 3, 2020

PAL management announced it was looking to return 10 leased wide-bodied aircraft. These are the sleek and sexy, but more expensive wide-bodied Boeing-777 and the Airbus 330 and A350.

... some of the flag carrier’s over 1,000 pilots will be grounded for a long time, or let go altogether.

PAL offloads its excess baggage
Ripping through turbulent skies, Lucio Tan-owned Philippine Airlines (PAL) is getting rid of all the extra weight.

Clearly, PAL, which was already facing difficulties even before the coronavirus disease 2019 or COVID-19 pandemic disrupted global air travel, needs to do everything in its survival handbook to make it through this crisis.

In its town hall meeting on Thursday, insiders said PAL management announced it was looking to return 10 leased wide-bodied aircraft. These are the sleek and sexy, but more expensive wide-bodied Boeing-777 and the Airbus 330 and A350. PAL has a fleet of over 60 aircraft.

Desperate times call for desperate measures indeed.

The bad news that goes with that though is that it might mean some of the flag carrier’s over 1,000 pilots will be grounded for a long time, or let go altogether.

It’s still unclear how many pilots will be affected, but some of the leased aircraft need at least three pilots, insiders said.

The final decision will also depend on the destinations or flights where some of the leased aircraft are used. For example, flights to destinations that are not likely to pick up in the coming months may be scrapped and, thus, the wide-bodied carriers may not be needed anymore.

Aside from getting rid of the wide-bodied carriers, PAL may also continue to downsize, say insiders who attended the town hall meeting. Nothing is final yet, but management assured employees that it is doing everything it can so PAL will make it through this difficult time.

Carmen Tan steps down as vice chairman

The town hall meeting came on the heels of recent board changes, which are said to be part of PAL’s move to professionalize the organization.

Another change in the flag carrier is that Tan’s wife, Carmen, stepped down as vice chairman, management said in a letter to PAL employees last July 27.

“Ms. Carmen Tan stepped down as vice chairman and the position remains vacant,” PAL president and COO GIlbert Santa Maria said in the letter.

On behalf of management, Santa Maria also expressed “profound gratitude” to Tan’s son Michael and Tan’s daughter Vivienne, who both stepped down as directors of the powerful PAL board last July 23, “for their respective contributions to the stewardship of PAL through the years.”

Vivienne, employees were told, also quit her role as executive vice president-chief administrative officer of PAL effective July 23 and the position is left vacant.

Government support

Management said PAL is not out of the woods yet as some flights, which could have churned in revenue, did not push through.

“All told, we were only able to operate 123 regular flights in June, just 18 percent of our plan to mount 682 limited flights that month. These challenges did not deter us from operating 222 sweeper and repatriation flights and 640 all-cargo flights since March 2020,” Santa Maria said in the letter.

PAL also transported the remains of deceased overseas Filipinos from Saudi Arabia back home to their families, a testament to the flag carrier’s commitment “to enhance national interest and provide aid and comfort to Filipinos who are doing their duties as OFWs, medical frontliners, entrepreneurs, farmers and service workers.”

It continues to seek government support.

The letter did not specify what kind of support the company is asking, but airline industry players said the best option would be a grant or subsidy, either wage or landing fee subsidies; next would be a credit guarantee to private banks so they could lend to the struggling airlines; and the other option is capital infusion through equity or convertible debt.

Whichever type of government support PAL and other airlines will get, PAL’s roughly 6,000 employees are all hoping the company will survive the crisis.

One longtime PAL employee shared with me her sentiment: “This is our flag-carrier, our national pride. We don’t want to see it go down.”

[XWB_flyer]

<quote author="Arianespace">

EYES WIDE OPEN

Iris Gonzales
(The Philippine Star)
August 3, 2020

PAL management announced it was looking to return 10 leased wide-bodied aircraft. These are the sleek and sexy, but more expensive wide-bodied Boeing-777 and the Airbus 330 and A350.

... some of the flag carrier’s over 1,000 pilots will be grounded for a long time, or let go altogether.

PAL offloads its excess baggage
Ripping through turbulent skies, Lucio Tan-owned Philippine Airlines (PAL) is getting rid of all the extra weight.

Clearly, PAL, which was already facing difficulties even before the coronavirus disease 2019 or COVID-19 pandemic disrupted global air travel, needs to do everything in its survival handbook to make it through this crisis.

In its town hall meeting on Thursday, insiders said PAL management announced it was looking to return 10 leased wide-bodied aircraft. These are the sleek and sexy, but more expensive wide-bodied Boeing-777 and the Airbus 330 and A350. PAL has a fleet of over 60 aircraft.

Desperate times call for desperate measures indeed.

The bad news that goes with that though is that it might mean some of the flag carrier’s over 1,000 pilots will be grounded for a long time, or let go altogether.

It’s still unclear how many pilots will be affected, but some of the leased aircraft need at least three pilots, insiders said.

The final decision will also depend on the destinations or flights where some of the leased aircraft are used. For example, flights to destinations that are not likely to pick up in the coming months may be scrapped and, thus, the wide-bodied carriers may not be needed anymore.

Aside from getting rid of the wide-bodied carriers, PAL may also continue to downsize, say insiders who attended the town hall meeting. Nothing is final yet, but management assured employees that it is doing everything it can so PAL will make it through this difficult time.

Carmen Tan steps down as vice chairman

The town hall meeting came on the heels of recent board changes, which are said to be part of PAL’s move to professionalize the organization.

Another change in the flag carrier is that Tan’s wife, Carmen, stepped down as vice chairman, management said in a letter to PAL employees last July 27.

“Ms. Carmen Tan stepped down as vice chairman and the position remains vacant,” PAL president and COO GIlbert Santa Maria said in the letter.

On behalf of management, Santa Maria also expressed “profound gratitude” to Tan’s son Michael and Tan’s daughter Vivienne, who both stepped down as directors of the powerful PAL board last July 23, “for their respective contributions to the stewardship of PAL through the years.”

Vivienne, employees were told, also quit her role as executive vice president-chief administrative officer of PAL effective July 23 and the position is left vacant.

Government support

Management said PAL is not out of the woods yet as some flights, which could have churned in revenue, did not push through.

“All told, we were only able to operate 123 regular flights in June, just 18 percent of our plan to mount 682 limited flights that month. These challenges did not deter us from operating 222 sweeper and repatriation flights and 640 all-cargo flights since March 2020,” Santa Maria said in the letter.

PAL also transported the remains of deceased overseas Filipinos from Saudi Arabia back home to their families, a testament to the flag carrier’s commitment “to enhance national interest and provide aid and comfort to Filipinos who are doing their duties as OFWs, medical frontliners, entrepreneurs, farmers and service workers.”

It continues to seek government support.

The letter did not specify what kind of support the company is asking, but airline industry players said the best option would be a grant or subsidy, either wage or landing fee subsidies; next would be a credit guarantee to private banks so they could lend to the struggling airlines; and the other option is capital infusion through equity or convertible debt.

Whichever type of government support PAL and other airlines will get, PAL’s roughly 6,000 employees are all hoping the company will survive the crisis.

One longtime PAL employee shared with me her sentiment: “This is our flag-carrier, our national pride. We don’t want to see it go down.”

The most likely aircraft types are likely to see a downsized in numbers A321ceo, Bi-class A330-300 (8760 to 8771), and B777-300ER (7772 to 7777).

I did not consider the A320-200 as they are in the process of being returned to there lessors or transfered to GAP even before COVID-19 though its possible they are also included in the 10 aircraft that are to be returned to lessors.  

[Solblanc]

It’s a little worrying that even a350s are on the chopping block. If anything, they should be kept over a330s as they’re more flexible.

[XWB_flyer]

Solblanc wrote

It’s a little worrying that even a350s are on the chopping block. If anything, they should be kept over a330s as they’re more flexible.

Although I have my doubt of PAL removing any of there A350. But from what I heard the leasing rates are quite when compared to either the A330 and B777 so it is a certain possibility.

Another possibility is PAL will phased out there entire B77W fleet similar to Delta did with there B772/77L which was quite shocking as they recently just completed a multi-million dollar retrofit program with new seats in Main Cabin and introducing both Premium Select and Delta One Suites.

[Arianespace]

PAL needs both the 77Ws and the XWBs.  Right now, their numbers however are not reflective of demand. Some must go for longer storage.

[XWB_flyer]

http://philippineairspace.blogspot.com/2020/08/pal-trims-widebody-fleet.html?m=1

Apparently three A330-300 three A350-900 and four B777-300ER are in the process of being returned.

For the A333 I think the most likely once to be returned are the Bi-class configured as they are mainly use on ME routes or high demand regional and domestic routes which are likely to much capacity for PAL and refurbishing them like the Tri-class A333 would be also costly.

I'm surprised the A359 is also included. Although the lease rate for them are quite high so may be that is the reason why its included. Its also possible that PAL will not contiune with the plan to returned the A359 as its the right-sized aircraft for recovery for long-haul destinations.

The B773 on the other hand isn't surprising to me as its the largest aircraft type in PAL fleet and with most forcast estimate a 2 to 4 year recovery for long-haul travel it was going to be the first type that will see a reduction in numbers IMO. Also six B777 would be enough numbers for PAL's high demand long-haul routes such as Los Angelas, San Francisco and Toronto or Vancouver.

No mentioned of the A320/A321 yet. But the A320 was in process of being returned to there lessors while I see the excess A321ceo being returned to there lessors as PAL will need to take the A321neo they have on order eventually its also possible PAL will converted some of the order for the A320neo?

[chowpau]

Just wait for the official word from PAL...people I know working are reacting to the news especially the pilots flying the A350

[Arianespace]

Flight crews have no idea how dire the straight is. All of them was told that some of them might have to go. I hope the airline hold them until December otherwise they may have to seek employment elsewhere which is pretty hard at this time.

[Arianespace]

I was watching ABS-CBN drama and how events unfold before the eyes of its workers yet no one really believe the inevitable. They were told the best of hope and believed they did. Reality strike and the bad news finally sink in.

Hopes were given to airline workers of better things to come by July. Management had a good projection as to how things might unfold last April. They were hoping for the best and it wasn't good enough. We are now in August and the projection was thrown out of the window. The situation is bad. CEB already made their call. PAL and AAP will be making theirs anytime soon. It will not be good to hear. But some decision has to be made.

[Arianespace]

Really bad news for PAL people yesterday.

I was waiting for official announcement in difference to your request. None came out so far.

So I'm posting this ahead again should anyone pick up later.

As was said last month, and true to the word posted on this forum, Philippine Airlines will let go 40% of their employees (both ground and flight crews) this coming October.

It will be PAL's biggest retrenchment since 1997. Told you its forthcoming. But I guess nobody is listening.

FYI Senate is delaying the aid package for the airline industry. It is still there up for deliberations. And Congressman Romero is not happy about it. His airline will die together with others if the measure is not pass this year. They are suppose to come after Bayanihan Two.

[Arianespace]

The Story is out...

PAL to cut jobs anew 

MANILA, Philippines — Lucio Tan-owned Philippine Airlines, the country’s flag carrier, will implement another round of voluntary and involuntary manpower reduction starting next month.

In a newly unveiled survival program dubbed Project Gamma, recently presented to employees, PAL management said the company would have to reduce its manpower by 35 percent starting October.

Just like other carriers, PAL has implemented manpower reductions. Last March, it let go of 300 people, of which some 200 were retrenched while 100 opted to retire early.

The exact number of employees to be covered by the next round of manpower reduction was not immediately available, but 35 percent of a total headcount of roughly 5,000 to 6,000 employees is equivalent to 1,750 and 2,100 people, respectively.

[Arianespace]

As of this posting, 3 A350 and 4 B777 are grounded still. So the figures reported back in August are accurate. No news however if lessors agreed to PAL proposal. My thoughts however is they already have. Otherwise, these planes would have left the country like some of CEB fleet. They are still here. So I think the no use no pay policy are already being effected. I kinda believe that lessors nowadays prefer to earn little than none at all.

[XWB_flyer]

This was last week. But decided to share it nonethless.

https://asia.nikkei.com/Business/Transportation/Philippine-Airlines-plans-to-seek-court-protection-from-creditors

Additionally PAL is planning to returned 20 aircraft back to there lessors no mention which type are they though?

[Arianespace]

Notice the plane that are not flying. They are good as given.

[AnonBoy]

If its based on current aircraft flying, the 777s are rarely on passenger flights (at least not the scheduled ones). Is it safe to say that the 350s are more secure in being the mainstay on longhaul flights? Most airlines have started reducing or retiring their 777s so I am assuming, it might be the same direction for PR.