By Paolo Montecillo

MANILA, Philippines - Philippine Airlines (PAL) has moved to stem the further resignation of pilots with a pledge that none of its remaining pilots would be moved to PAL sister firm Air Philippines, a budget airline.

The resignation of two dozen pilots has led to the cancellation of a number of PAL flights.

The Department of Transportation and Communications (DOTC) on Thursday said PAL had submitted a list of commitments aimed at preventing pilots from leaving the company.

Transportation Undersecretary Dante Velasco said PAL's promise not to transfer pilots to Air Philippines "is a very determined step to end PAL's problems with its pilots."

Other commitments by PAL include publishing new daily flight schedule to ensure that affected passengers are informed about changes in their bookings.

The company also pledged to keep an open line of communication with its pilots, who, unlike other PAL employees, are not represented by a union.

PAL's three-pronged commitment to address the pilot shortage, which will be presented to the President, was a result of a series of meetings with DOTC officials.

Source of resentment

But Velasco admitted that PAL's move to transfer pilots to Air Philippines had become the biggest source of resentment among the airmen.

This led to the resignation of a total of 26 pilots, the latest being on Wednesday. The pilots have left the country to take higher-paying jobs abroad. This resulted in the lack of pilots to man the company's fleet of Airbus A320 and A310 aircraft.

Velasco said PAL management implemented a cost-cutting program earlier this year that involved the transfer of several senior and junior pilots to Air Philippines, which is being prepared to go head-to-head against Cebu Pacific.

Lower salaries

The pilots were given lower salaries, with the company claiming that these were "low-cost carrier rates."

PAL was forced to implement several cost-cutting measures after suffering close to $300 million in losses in the fiscal year of 2008 to 2009.

"But PAL did not expect that there would be a recovery in passenger volumes later in the year," Velasco said.

Business model

"Thus, PAL adopted a strategy of high-volume, low margins as opposed to its current high-margin and low-volume business model," he said.

Velasco said the pledges stemmed from PAL's "realization" of the need to keep an open communication line with its pilots and other employees.

Aside from its problems with pilots, PAL is dealing with disputes with flight attendants and ground employees.

Flight attendants have threatened work stoppages in protest of PAL's policy of forcing the cabin crew to retire at the age of 40, when all other PAL workers are allowed to work until the age of 60.

Ground employees are protesting PAL's plan to outsource 2,600 jobs initially as part of cost-cutting efforts.

"What I see here is we have set the tone of the way other labor issues can be settled. So we expect [PAL] to follow the mold of dialogue and to be more open-minded," Velasco said.

PAL officials could not be reached for comment as of Thursday evening.

Following PAL's moves, Velasco said the government would take a "watchful but hands-on" approach on the issue to "allow management to settle its differences with its pilots as they belong to one corporate family."