FPI backs PAL restructuring

MANILA, Philippines - The Federation of Philippine Industries (FPI) has expressed support to Philippine Airlines Inc.’s restructuring program as the country’s flag carrier faces labor disputes anew.

In a letter to House Committee on Labor and Employment chairman Karlo Alexei Nograles, FPI chairman Jesus Lim Arranza said business restructuring in the aviation industry is nothing new as airlines intend to focus more on core operations and opt to outsource non-core services.

“It is unfortunate that this type of business restructuring is immediately frowned upon by the labor sector as they see it as unfounded. Rather, the labor sector see it as a form of contractualization, undermining security of tenure and worse, they tag is as union busting,” Arranza said.

Arranza pointed out business remodeling is a common solution adopted by airlines worldwide to improve business efficiency.

Unless they want to be left behind by competition, he said Philippine carriers like PAL should undertake a business restructuring program to allow them to focus on their “core functionalities.”

Arranza said a similar program in the form of outsourcing of airport ancillary services was already implemented by PAL in 2011, the validity of which was upheld by the Department of Labor and Employment and the Office of the President.

“Understandably, this would be the position undertaken by the labor sector because this business restructuring necessarily entails manpower rationalization and engaging third-party service providers. However, the fact that a business restructuring program may result to manpower rationalization does not render it automatically as illegal,” he said.

Arranza said the FPI remains firm on its view that business restructuring in the aviation industry is only part of the constraints of operating an airline company due to many challenges in global aviation.

“Clearly, outsourcing or business restructuring in the aviation industry should not be frowned upon. Rather, our airlines should be given the chance to be competitive globally,” he said.

The Philippine Airlines Employees’ Association (PALEA) in October filed a notice of strike in protest of the flag carrier’s restructuring program.

House Resolution No. 2447 authored by Rep. Raymond Democrito Mendoza has already been filed which seeks to urge the House Committee on Labor and Employment to conduct an investigation in aid of legislation into the ongoing labor dispute between the management of PAL and PALEA.