This is a re-posted opinion piece.
I have been hearing an increasing amount of complaints about the quality of PAL’s in-flight service since their labor problems escalated at the height of typhoon Pedring. Even in business class, they sometimes have difficulty giving the usual amenities like free wine. Some foreign passengers have been reported to have vigorously protested the deterioration of the airline’s service quality. This loss of reputation for quality service will slowly kill the airline.
When I asked some people I know inside PAL what is going on, they admitted that indeed, they have had problems because among others, they can’t even get their catering trucks out of their flight operations center. In fact, they can’t even get garbage trucks to collect the garbage and this is creating a pretty unhealthy situation that could have negative impact when FAA visits soon to see if our Category 2 status could be finally upgraded.
The airline has been resorting to interim measures to get food on board flights by contracting Via Mare and Max’s to provide them. But even if the food handling standards of these top restaurants are impeccably way up there, PAL officials are worried about this lack of control. One bad case of food poisoning given the less than ideal situation and that’s another set of problems for them.
What I don’t understand is why authorities are allowing the Palea demonstrators to block the catering trucks from leaving the premises. Picketing is one thing. Preventing the normal course of business by physically blocking movement in and out of the operations center couldn’t be legal.
Then again, Palea leaders are fighting to the death because they have to. They led their members to this situation and they have to keep morale up. Luckily for the leaders they have the union funds to sustain themselves. Their members have lost their chance for re-employment. They may yet eventually kill the airline and the jobs of the remaining 5,000 or so employees who will all get nothing if the airline keels over.
I understand from sources that in a recent family meeting, Lucio Tan was asked by some family members why must they continue to bleed good money on PAL. Some $2 billion had already been poured by Lucio Tan on PAL since the start and a billion more may likely be needed if they are to modernize the fleet and be competitive in today’s tough skies. If this is Lucio’s idea of paying back his dues to this country, to some of us with naughty minds, it might have been cheaper if he just paid the taxes being demanded from him regardless of basis.
I wouldn’t be surprised if Lucio himself is sorry he took control of the airline from Tonyboy Cojuangco over some disagreements on strategy. At that time, his money out was very much below the billion level. There is no certainty they can make any money anytime soon. Now that prospective buyers of PAL have backed out one by one, Lucio Tan’s family members have started to get really worried.
Apparently, they tried to sell PAL not just to Manny Pangilinan and Ramon Ang but also to Qantas. In the case of the Australian carrier, the interest was there to make Manila into a major hub for both Qantas and Jetstar, its budget carrier, as part of their new strategy to focus in Asia. But PAL’s labor problems scared off the Australians. They have enough labor problems at home.
Other than their labor situation, the one other problem slowly killing PAL is our Category 2 status. This had been going on for some five years now. They can’t use their more efficient Boeing 777 on their US West Coast routes. They have delayed the delivery of a few more 777s as much as they could but will have to once again start accepting delivery.
The thing is, a PAL executive told me, “we ordered those 777s way before we were placed on Category 2 status.” True enough… plane orders are done many years ahead and dropping those orders now will entail a fairly significant amount of down payment being forfeited.
Apparently, even when they are able to use the 777s to Vancouver, the Category 2 status forces them to deviate from the most direct route to avoid flying over any American air space. This means about 45 minutes more of flying time which builds up to quite a sum of money in the light of today’s fuel prices.
So I was right in last week’s column that it is only Lucio Tan who is insisting on putting more money into the airline to keep it flying. Current PAL employees had better say novenas for his good health. If he keels over, so will PAL. Employees will have to line up with the other creditors of the airline to get a cent in a bankruptcy situation.
As I said, his heirs prefer to just limit their losses now. There are easier ways of making a buck on their capital elsewhere. In fact, when I mentioned the possibility of shifting more of their airline investments to AirPhil Express, one Tan relative said that is “better to cut clean” or be completely out.
As for government, if they don’t think PAL is important enough to help get back normal operations, like letting its catering trucks out, maybe it is time for someone at DOTC to think of plans to mitigate the immediate impact of a PAL closure. In the medium to long term, its domestic competitors can gear up to absorb the market. For one, I am sure Air Asia Philippines will have the resources to step up to the challenge. Cebu Pacific’s new planes due to arrive soon will also help minimize travel disruptions. Fred Yao is also planning to get new Airbuses for Zest Air.
One option should be permanently closed: a government takeover of PAL. There is no national interest served by this move. If PAL is a losing proposition for the private sector, so would it be and even more so for government. Don’t even think of using SSS or GSIS funds again for PAL. That’s so unfair for the lowly employee members of these trust funds who already lost money in PAL in the past.
But I would mourn PAL’s death, if it happens. Despite its shortcomings, boarding a PAL flight in foreign airports happily signals that I am already home. It is always good to see our national colors on its tail and our country’s name in clear bold letters. PAL is dying slowly but hopefully, we won’t see the last of Asia’s first.
Mabuhay
One thing I will miss if PAL goes under is Mabuhay, its in-flight magazine. The publication of Mabuhay is outsourced to a publishing company headed by Simeon Ventura Jr. Jun did not train in journalism but is doing an amazing job of publishing what could well be the best in-flight magazine in the region. It is good to know you can also now buy Mabuhay from Fully Booked.
I saw Mabuhay’s October issue during my last PAL flight to and from Shanghai. If all our tourism attaches abroad sent out copies of the magazine, I am sure a lot of potential tourists will be intrigued enough to come visit our Philippines. Even Pinoys have a lot to learn about goings on in the country through Mabuhay. Jun packs in a lot of information in easy bite size morsels throughout the magazine in addition to the more extensive features.
Actually, other regional cities on PAL’s flight map benefit too. The October issue for example has Macau as cover and the inside article truly entices one to go buy a PAL ticket for Macau at the first opportunity.
And it is not all tourist stuff. There is this heartwarming article too about an effort to train solvent sniffing out-of-school youths to train under a Spanish government grant for skills needed to reconstruct crumbling heritage sites. The training includes basic English, math and values formation in addition to technical drawing and building materials sciences.
Tourism Secretary Mon Jimenez should invite Jun Ventura to give a talk to his promotions staff on what it takes to produce good materials tourists will appreciate. His Mabuhay has been doing it for years with good results.
Congress
Benedict L sent this one.
A driver is stuck in a traffic jam on the highway. Nothing is moving. Suddenly, a man knocks on the window. The driver rolls down the window and asks, “What’s going on?”
“Terrorists have raided Congress holding congressmen hostages. They are asking for a $10 million dollar ransom. Otherwise, they are going to douse them all in gasoline and set them on fire. We’re going from car to car, taking up a collection.”
“How much is everyone giving, on average?” the driver asks.
The man replies, “About a gallon.”
Boo Chanco’s e-mail address is [email protected]. He is also on Twitter @boochanco
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By: Boo Chanco – Demand and Supply
Source: The Philippine Star, Nov. 9, 2011
To view the original article, click here.
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