Philippine Airlines says pilot trouble will hit bottom line

Agence France-Presse

Posted at Aug 04 2010 06:31 PM | Updated as of Aug 05 2010 02:31 AM


MANILA, Philippines - Philippine Airlines may post a loss in its current fiscal year because of pilot trouble that led to flight cancellations, its listed parent said Wednesday.

The flag carrier, known as PAL, had said it expected to return to profitability in the 12 months to March 2011 after posting a net loss of  $14.3 million  in its previous fiscal year.

"We wish to confirm that (PAL) may have to revise its targets... because the cancellation of several flights have indeed affected the revenue of PAL," PAL Holdings said in a statement.

Twenty-five pilots and first officers of PAL's short-haul aircraft suddenly quit last week for higher paying jobs abroad.

The synchronised move forced the airline to cancel 22 domestic and regional flights between Saturday and Monday.

On Tuesday the airline said its operations were back to normal but that three domestic flights had been axed indefinitely due to the pilot shortage.

PR Holdings, the investment vehicle for Lucio Tan, PAL chairman and majority shareholder, did not disclose the airline's exact losses from the pilot trouble.

The Philippine government stepped in this week to try to lure back the pilots who left amid threats by PAL management to sue them for breach of contract.

Some of President Benigno Aquino's cabinet ministers are involved in talks with the airline and the pilots' union in an effort to find a resolution.

Aquino spokesman Edwin Lacierda told reporters Wednesday that the talks were continuing, but appeared to douse hopes of an immediate breakthrough.

"We cannot guarantee that it would be resolved this week," he said.

"We thought it was just a simple case of higher wages luring pilots to seek jobs elsewhere," Lacierda said.

But he said the pilots' union had since brought out more complaints against the management.

PAL has been beset by growing labour unrest for months with ground crews and flight attendants also threatening strikes.