PHILIPPINE Airlines (PAL) spent $8 million to make attractive the salaries and benefits of its pilots to prevent them from leaving the country and work for foreign airlines.

PAL president Jaime Bautista told reporters that the flag carrier even increased the retirement pay of the pilots from 22.5 days to 1.5 months.

“They [pilots] are flying the most special asset of the company. So we need to protect them. We are giving them better pay, better benefits, including better retirement pay,” said Bautista.

He added: “I think we shelled out $8 million to prepare for this. This is for them, so they won’t even think of leaving PAL.”

PAL lost nine pilots in 2003. In 2004 and 2005, 22 and 29 left, respectively. In 2006, 15 resigned. Bautista said the number dropped last year. “I think there were only around five who resigned,” he said.

A majority of these Filipino pilots and maintenance personnel now work for airlines in the Middle East. They receive as much as $10,000 a month.

Bautista said that if a foreign airline company would offer a Filipino commercial pilot with a monthly salary of $10,000, he would be receiving it in full, as these airlines are subsidized by the government.

In the Philippines even if the local airlines offer the same amount of salary to a commercial pilot, he would be taxed 32 percent, thus he does not take the entire pay home.

This year PAL is taking in 72 new pilots to fly PAL Express, PAL’s budget-airline brand.

“We will train, and we will need 72 new pilots for our interisland operation that will be under PAL Express. They will be trained to operate turbo-propeller aircraft,” added Bautista.

PAL Express  will primarily fly intraregional routes in the Visayas and Mindanao from its Cebu hub, as well as secondary routes to smaller airports on island-provinces that are not able to accommodate PAL’s regular jet aircraft.

PAL Express is scheduled to take off on May 5, with eight flights daily between Manila and Boracay. Services ramp up dramatically on May 19, when PAL Express’s Cebu hub operations start with flights between Cebu and five points in the Visayas and Mindanao.

PAL will spend $150 million to finance the acquisition of three Bombardier Q300s and six Q400s and reopen its Cebu hub.

Bautista said financing will be from a combination of internally generated cash and borrowings. PAL, he said, is now in talks with local banks to partly finance the project cost.

“We are still in discussions with a syndicate of local banks. The amount will be in a magnitude of $100 million in terms of borrowing,” he said.

Two Q300s have already arrived. Three more Q300s will be arriving in the first week of May and one Q400 a week after. “This year we will take delivery of six turbo-props. We are looking at acquiring a total of nine units for the first year of PAL Express’s operation. We can probably increase the fleet by next year depending on the demand,” said Bautista.

PAL Express is offering promotional fares for as low as P88 for one-way flights between Cebu and Bacolod, Caticlan, Tacloban, Butuan and General Santos. The special fare can be availed of until May 18, and is for travel from May 19 to August 15.

PAL Express is expected to boost PAL profits by about P300 million every year once its low-fares unit goes full blast. PAL Express is also expected to carry 1 million passengers each year.

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AUSTRALIA-BASED Nido Petroleum Ltd. (Nido) has announced its plans to expand its drilling program in Service Contract 54 (SC54) by accelerating its shallow-water strategy.

PHILIPPINE Airlines (PAL) spent $8 million to make attractive the salaries and benefits of its pilots to prevent them from leaving the country and work for foreign airlines.

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