National carrier Philippine Airlines said Thursday it will cut its work force by offering early retirement as a cost-cutting measure after suffering more than $301 million in losses.
"We want to make PAL lean and mean so it will be agile and flexible enough to adapt to the new economic climate," company president Jaime J. Bautista said in a statement.
He said the airline industry has been one of the hardest hit by the global recession.
The statement said the company will take "decisive steps" to restructure after last month reporting losses of $301.4 million for its fiscal year ended March 2009. It had net profit of $30.6 million in the previous year.
The airline did not specify how many of its 8,000-plus employees would be offered early retirement.
The company's revenue increased to $1.634 billion in the last fiscal year from $1.504 billion in the previous year due to a 17 percent increase in passengers, but it was overwhelmed by increased maintenance costs and record-high fuel prices that raised expenses to $1.9 billion. Fuel accounts for 44 percent of the airline's operating costs.
In April, the Kuala Lumpur-based Association of Asia Pacific Airlines said regional airlines suffered deeper-than-expected losses of $4.3 billion last year due to sharply higher fuel costs and dwindling demand amid the global economic slump.
The group said combined revenue for its 17 members, including Philippine Airlines, rose 6 percent in 2008 to $103 billion, but failed to keep pace with higher fuel costs.
Bautista said the cost cuts will not undermine airline safety and compliance with industry standards.
He also said the airline will continue to meet increasing passenger demand especially for the domestic market and is eyeing new charter or regular destinations.
The airline will soon acquire new Boeing 777-300ER jets and is also in the final stages of refurbishing its fleet of wide-bodied aircraft to feature new seats and state-of-the-art entertainment systems, Bautista said.