Airlines in the Philippines have not benefitted from the same rate of domestic demand recovery

as airlines elsewhere in the region. Although there are some encouraging signs emerging in
Dec-2020, a dramatic rebound will be elusive while domestic travel restrictions remain in place.
The local airline industry was already entering a pivotal period before the pandemic, with
Philippine Airlines (PAL) looking to reorganize itself to achieve long term financial stability, and
multiple efforts under way to address long-standing airport capacity issues in Manila. Now the
COVID-19 pandemic has amplified aviation industry problems and prompted all parties to re-
examine their strategies. But the key first step will be gaining more momentum in the
restoration of domestic capacity.
The retrenchment was carried out after a comprehensive system-wide review process and is
part of the company’s overall recovery initiatives amid the ongoing pandemic that has
massively affected the global airline industry.

While demand for air travel slowly returns, the airline states that it is still far from pre-
pandemic levels. PAL currently operates less than 30% of its normal pre-pandemic number of
weekly flights, held down by lowered travel demand and travel restrictions around the world
and throughout the Philippines. Since March 2020, PAL has suspended capital expenditures,
reduced management salaries, deferred lease payments and slashed non-essential expenses.
The affected employees will continue to receive their salaries and medical benefits until the
effective date of separation. Support includes outplacement assistance and employability
initiatives to help ease the transition. Meanwhile, PAL has assured its customers and partners
that current operations will continue without disruptions. PAL will continue to gradually
increase international and domestic flights as demand recovers. In addition to regular
scheduled services, the flag carrier continues to mount special repatriation flights to help bring
home stranded Filipinos from the Middle East, Europe, North America and all over Asia. PAL
likewise operates all-cargo services to meet the essential cargo transport needs of the public
and support economic supply chains. PAL will also be supporting the transportation of COVID-
19 vaccines, once available.