The management of Philippine Airlines offered their justification regarding the latest retrenchment process that they recently finished.
The flag carrier of the Philippines explained that the measure they took is a component of a business restructuring program.
Philippine Airlines reportedly wants to diminish the costs and boost its revenue. The airline firm cited that last year, the losses that the company sustained have worsened.
The ongoing flight suspensions and travel bans to locations that the coronavirus outbreak has impacted are the leading causes of this aggravation, the firm said.
Last Friday, Philippine Airlines made it known to the public that it has completed its cost-cutting efforts, according to the report by Philippine daily newspaper The Philippine Star.
This process resulted in the dismissal of roughly 300 personnel. These workers held management and administrative positions based on the company’s ground operations.
Aside from Philippine Airlines, Cebu Pacific is another service provider that reported losses due to the ongoing coronavirus dilemma.
Because of the travel prohibition, the largest budget airline of the country had approximated a P3-billion to P4-billion profit loss.
Furthermore, Cebu Pacific cited that refunds alone had already generated a loss for the firm, amounting to more than P2 billion.
These consumer reimbursements were because of the canceled flights to Macau, China, and Hong Kong.
Roberto Lim is the executive director of the Air Carriers Association of the Philippines, Incorporated (ACAP).
He remarked that the losses that local airline companies have obtained certainly feel excruciating for their operations.
Lim explained that this pain also applies to international airline firms. The ACAP vice-chairman relayed that these airline industry players could be at the brink of collapsing as well.
Lim specifically referred to the already financially troubled carriers that are vulnerable to piling profit losses.
Moreover, he said that the dilemma for these airline companies is they need to carry on flying regardless of the pandemic.
This action makes them burn money, especially when they continue flying with empty seats, Lim added.
The ACAP executive director explained that the government-ordered travel ban is hurtful for the airline companies that fly to South Korea, China, Taiwan, and Hong Kong.
Nevertheless, he said that citizen protection is still a priority. Lim’s perspective is also supportive of the cost-cutting measure that Philippine Airlines has taken.
Due to uncertain times like the present, he pointed out that airline companies really need to suspend flights to some of their routes.
These business organizations’ first line of method is cost-cutting. They have to slash costs as they could not increase their revenues, Lim explained.
The ACAP executive director also gave Cathay Pacific as an example. This airline firm decided to make its 27,000 employees take unpaid leaves.
Plus, Cathay Pacific also grounded 100 of its aircraft in a bid to safeguard its enterprise and to preserve cash.
On Wednesday, March 4, 2020, PAL Holdings, Incorporated (PSE: PAL) closed at P6.80 per share.
Furthermore, the total value turnover reached P38,970.00. The Philippine Stock Exchange recorded the 52-week high of the holding company of Philippine Airlines at P11.00.
Meanwhile, its 52-week low is at P6.50.
- Key Prices for PH Bluechip Stocks 30% Above 52-Week Low - June 4, 2024
- May 2024 Market Sentiment Rating of 30 PH Bluechip Stocks - June 3, 2024
- EquiTalks: ICT, BPI, AEV Updates – 5.29.2024 - May 29, 2024
