PALEA: Outsourcing is not an industry trend

Press Release
March 20, 2011
PALEA

The Philippine Airlines Employees’ Association (PALEA) today cited sources to rebut the claim that outsourcing is an aviation industry trend that Philippine Airlines (PAL) must follow. “The typical model in the airline industry, especially in the Asia-Pacific Region, is for major airline companies, especially flag carriers or former flag carriers, to maintain ground handling and related services in-house at domestic transportation hubs,” asserted Gerry Rivera, PALEA president and Partido ng Manggagawa vice chair.

PALEA said that this is the case in Malaysia, India, Sri Lanka, Thailand, Australia, New Zealand, South Korea, Bangladesh, Taiwan and Pakistan. The group explained that in Indonesia ground handling is carried out by a joint venture between Garuda, the old flag carrier, and the airports authority. While in China ground handling is typically carried out by joint ventures between airlines and airport authorities.

Rivera avowed that Malaysia Airlines provides ground-handling services to various airlines at its domestic hub. Thai Airways also maintains an in-house ground handling services at its domestic hub. “These are facts that can easily be cross checked through the websites of these airline companies,” he added.

In contrast PALEA claimed that the service providers set to take-over the functions of the regular employees do not have any demonstrable competence in providing the airline services that will be outsourced by PAL. Citing the article of journalist Raisa Robles, PALEA insisted that Manuel H. Osmeña, the alleged owner of SkyKitchen and SkyLogistics, is a long-time partner of Lucio Tan; and these corporations were only organized in 2009.

Further in India, the national Carriers Indian Airlines Ltd. and Air India Ltd., aside from two other private companies, provide ground handling services. “We have learned that in view the overall security environment, the Indian government is considering a ban on ground-handling at Indian airports by foreign airlines and Indian private companies. It is being proposed that these functions should be performed only through Indian Airlines Ltd., Air India Ltd. and Airports Authority of India or their subsidiary companies. Thus the ground handling services in India will be regulated and quality of services assured. This will also prevent mushrooming of small agencies, which pose security risk.”

‘We hope that Malacanang will not be blind to these facts in considering its decision on the legality of the planned outsourcing. We have presented these facts in a comment we submitted to the Office of the President last February 24,” Rivera ended.