Philippines Airlines Case Essay

Philippines flight paths started its history on evidence 15, 1941 on a small twin-engine beech tree Model 18 flying 212 of unalloyed skies from manila to Baguio with a full freight of five passengers. Upon the outbreak of the pacific war, pals two aircraft were pressed into proceeds with the US army Air Corps. Post-war operations began on February 14, 1946 with five ex-military Douglas DC-35. In July, the air duct chartered DC-4s to carry Ameri basin table service men home to Oakland, making befriend the first airline to cross the Pacific. unceasing DC-4s service to San Francisco began in declination 1946. In May 1947, blood brother undefendable a driveway to Europe. By 1952, the foreign route network covered two-thirds of the wold, and the government became the volume stockholder. At present, buddy uses the nearly do technology in the local airline industry.Technical centers were constructed to perform fusee discourse for other airlines and contract work for t he states and Philippine Military services. Computerized makings systems link most pal sales outlets 103 in the Philippines and 56 worldwide. The chum up Data Center at the Manila Domestic Airport is the core of the most extensive computer system in the Philippines to solar day. A massive refleeting program was introduced to be able to cope with the standards of the industry. Indeed, this program pave the way for the jobs they argon facing right field now.ClosurePhilippine Airlines (PAL) is facing its lash crisis. Foremost in the familys mind is how can it possibly subjugate problems created by the economic turmoil that has been dismission the Asian region since July 1997- a business office few quarters were able to predict. What do they do in times of lessen demand for air travel, poor revenues, change magnitude operational cost, and when credit to cover monetary obligations is almost non-existent? The main reason wherefore PAL suffered financial problems was because of the massive refleeting modernization program, which was funded through loans made from local and international creditors.It has reached a point where it can no longer keep up with its obligations. Then, the persistence unrest come into force because of the guide to d makesize manpower as a radical to its financial problems. The pilots rejected a intent to retire 200 colleagues using a provision in their CBA which would non conk out them enough monetary benefit that leave behind compensate their year of service with the company. The basis employees protested the manner by which the trouble enforced a retrenchment program on their ranks as a result of the 22-day pilots strike. The downsize was a bitter pill to swallow. ambit of Events Prior to the ClosureJune 1998The 620 PAL pilots went on strike paralyzing PALs operations. 1,800 ground employees were retrenched.July 1998Philippine Air Lines Employee Association (PALEA) went on strike to demand the reinstatement of the r etrenched members who they claimed were dismissed by violating their CBA provisions. September 1998Lucio Tan gave out a intent to PALEA officers, the acceptance of which will realise the survical of PAL. PALEA officers accepted the proposal.Members of PALEA rejected the proposal and demanded a retraction from the officers. Officers retracted on a condition that a referendum is held on the proposals. Referendum under the sponsorship of DOLE was held. NO votes prevailed. Closure becomes reality. focus side (Interview)The closure was done because the company is on the brink of bankruptcy. It was cod to the unanticipated economic crisis. There is no problem with the management and grok. The management then gave a proposal to avoid the closure of the company. attention side (source from Newspapers)They are afraid that the management can easily fire them without the CBA. They are also worried about the experience of the labor union even if the CBA is suspended. other referendum was made and the YES votes prevailed which sum that they agreed to the proposal of Mr. Lucio Tan mayhap because of limited options they acquire. answer (Written by a PAL employee)The upheavals in PAL can best exposit as Bad Luck. afterwards 57 years in existence, who would have say that management expertise is lacking, by chanceinappropriate to the call of the times that never lacking.The labor unions have enjoyed the rights since day one of their foundation but again due to the call of the times, they have honorable ask for more.Each one has its own reasons for being so the collapse of the opening come to fore and closure was inevitable.The Yes or No vote.Both are shame but we chose the lesser evil- Why Yes?1. Yes means reopening of the airline, a must for national post as well as unmarried workers interest. The industry is merry to national trade and tourism. Its absence could muffled down the Philippine economy further. season its true that there maybe other airlines , PAL has the edge in facilities, human resources, and worldwide recognition. 2. The suspension of CBA can still be questioned in judiciary for its legality and can be move by the union. 3. There are labor laws to protect the workers.Effects of the Closure in the EconomyThe economy then was in recession so the people did not consider air travel. Many PAL workers went home jobless. GNP drops because of low productivity. dividing line opportunities were cancelled or delayed due to lack of Air Transportation.Re-openingPal opened its door when all the problems were partially solved. possessor Lucio Tan infused capital to the wingless airline, which was not enough for its continued survival. Selling of some(prenominal) as put ins were considered to pay creditors. It lessened flight destinations to be able to lower operation cost. A possible management turnover energy happen for the survival.Rehabilitation PlanThe devise was mainly to infuse capital to PAL airlines. Possible invest ors were invited for the extract of the capital. Selling section of ownership were also considered. Foreign investors such as Cathay Pacific, Northwest were thought process of possible investment to the said airline. A $150 million capital infusion was intendned but the Securities and Exchange cathexis (SEC) did not approve it last December 1998. Selling of sharesworth $11.916 million in abacus international, one of the biggest international computer reservation systems in the world was considered to raise exchange for operations. A new rehabilitation plan worth $200 million is set to be submitted on March 15, 1999 for the adulation by the SEC.