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Philippine Airlines, Inc PAL Holdings, Inc. Sustainability Report 2020 Contents 26 -- Governance 27 Compliance with laws and 32 Data security regulations 33 Customer privacy Introduction 28 Effective, accountable, and transparent governance 03 The Chairman’s message 04 Executive summary 06 About the Company 34 -- Social 14 Company highlights 35 Health and safety 44 Employee training and development 50 Customer management 19 -- About this report 53 Employee hiring and benefits 20 Purpose, Reporting Standards, Scope and Coverage 20 PHI’s Material Topics 54 -- Environment 55 Resource Management 58 Ecosystem and biodiversity 58 Environmental impact 21 -- Economic 22 Direct economic value generated and distributed 25 Outlook 62 – Our people and values 63 Employee welfare and communication 64 Corporate social responsibilities The Chairman's Message To our Dear Stakeholders, The mission of sustainability gained special force in 2020 when PAL We transformed our services to incorporate New Normal Holdings Inc. faced the greatest challenge in its history, no less than safety protocols that protect our employees and passengers: the survival of the PAL Group, which includes Philippine Airlines full Personal Protective Equipment (PPE) for our crew; modified (PAL) and PAL express (PALex), and their transformation into viable meals, amenities, facilities and digital assets to promote airline businesses for a vastly changed aviation market. healthy travel practices; stronger cleaning and disinfection measures; and new testing centers that helped authorities Impact of a Global Pandemic reopen borders and allow safe increases in travel volumes. The worldwide spread of COVID-19 shut down aviation markets and crippled the economies of most nations. PAL and PALex were forced Public Service and Public Accolades to cancel flights, affecting millions of passengers, wiping out more Our efforts as a responsible flag carrier contributed greatly to than USD 2 Billion in revenues and placing extreme pressure on the Philippine repatriation drive, with PAL flying majority of the liquidity. displaced OFWs and other Overseas Filipinos to their homes all over the country. Our ability to repurpose PAL’s current fleet to Survival, Recovery and Transformation serve new cargo business opportunities enabled PAL to The recovery of PAL and PALex entailed the slow restoration of transport vital economic shipments and essential medical routes and flight frequencies and determined efforts to operate supplies including medicines, PPEs, and life-saving vaccines. hundreds of repatriation flights and thousands of all-cargo flights to augment revenues and perform vital public services. The airlines Through it all, PAL won international recognition in 2020 as one survived through the concerted support of all employees, of the top ten airlines with the highest safety credentials for stakeholders and partners, generating the necessary funds to shore travel during the pandemic according to Safe Travel Barometer; DR. LUCIO C. TAN up liquidity, sustain operations and provide the basis for a and as a 4-Star Major Airline by the Association of Airline Chairman and permanent plan for 2021. Passengers (APEX). PAL and PALex also received the highest 7 Chief Executive Officer stars rating on Safety from AirlineRatings. Enduring Commitment to Sustainability The pandemic demonstrated the depth of our commitment to a The recovery of our airlines further strengthens our resolve to sustainable business that puts the health and safety of our valued work towards reviving tourism, supporting economic recovery personnel and customers first. We are reducing the size of our fleet and Filipino livelihoods, and maintaining global links that serve to align with post-COVID market realities, with priority on younger the public. Service and sustainability shall be the watchwords and more fuel-efficient aircraft. of a renewed Philippine Airlines and PAL express. 3 Executive Summary Executive Summary For close to 80 years, PAL has been on a mission to deliver time of uncertainty and keep an open line of safe, reliable, efficient and pleasant travel experience communication with the employees. We treat exceeding passenger expectations. Despite the setbacks in employees with dignity more so at a time when we have the year 2020, starting with the Taal eruption and ending to let them go as part of a workforce rationalization with COVID-19, the challenges of which we continue to face program. head-on, the mission continues. Our Safety Management System and Quality Assurance While the pandemic has brutally affected the Company’s Programs go hand-in-hand to ensure that our operations ability to generate revenues as planned, the Company did are conducted safely in accordance with Aviation wastes and hazardous substances that all contributes to what it does best - to be of service to the global community, Authority Regulations, PAL Standards, and industry best the deterioration of the global climate landscape. serving with the heart of the Filipino, a heart that is resilient practices. We address issues on Health and Safety of our in difficult times. These circumstances has put the business passengers and personnel, especially, at a time of global The events of 2020 have brought fear, anxiety, uncertainty to a test, and we will emerge better, stronger as we surpass threat to our health. With employees as the main to a vast number of people, including our employees and one challenge after another. Executiveproponents Summaryof safety and the provider of service to our our less fortunate countrymen. Our Company continues to customers, much importance is given by the Company look into the welfare of the employees and has In this report, we present the different aspects of the to employee training and development, to ensure that implemented programs to help employees cope with the Company’s governance, including compliance with laws and employees are equipped in performing services for the various challenges experienced during the year. The regulations, particularly on labor laws and human rights and safety and satisfaction of our customers. Company has not failed to fulfill its corporate social how the Company upholds the rights of its most valuable responsibility even in the most difficult times. assets – its employees. We follow through with labor While we endeavor to recover and slowly resume flights management and how the Company keeps a harmonious to a normal level, we do not forget our responsibility to Sustainability is also defined as the ability to exist relationship between management and its workforce. Part help mitigate the effects of our operation to climate continually. Despite the odds, the Company did show 2020 of keeping a strong relationship between management and change. The Company is conscious of the energy it such ability. We will continue to exist so that we may the employees is maintaining respect and giving consumes and is committed to becoming more efficient continue to deliver safe, reliable, efficient and pleasant opportunities to a diverse group of individuals that make up in the usage of non-renewable energy, limiting travel experience exceeding passenger expectations…and the workforce. We demonstrate transparency especially at a greenhouse gas emissions as well as reducing solid serve as a Bridge of Hope to our countrymen. 5 About the Company About PAL Holdings, Inc. PAL Holdings, Inc. (the Parent Company or PHI) was incorporated in the Philippines on May 10, 1930 to engage in the business of a holding company. On October 5, 1979, the Philippine Securities and Exchange Commission (SEC) granted PHI an extension of its corporate life for another 50 years from May 1980. PHI is a subsidiary of Trustmark Holdings Corporation, a domestic corporation and is part of the Lucio Tan Group of Companies. The Parent Company and its subsidiaries are primarily engaged in air transport of passengers and cargo within the Philippines as well as between the Philippines and several international destinations. The Group operates through its major subsidiaries: Philippine Airlines, Inc., the Philippine national flag carrier; and Air Philippines Corporation, a subsidiary under common control that was indirectly acquired through Zuma Holdings Management Corporation in 2017. PHI's registered office address is at 8th Floor, PNB Financial Center, President Diosdado Macapagal Ave., CCP Complex, Pasay City, Metro Manila 7 About PAL Holdings, Inc. Philippine Airlines, Inc. (PAL) Pioneering in end-to-end airline operations that constitute an industry of its own, Philippine Airlines, Inc. (PAL) lives on with its original name and the national colors, shining through for eight decades. PAL stemmed from the Philippine Aerial Taxi Company established in 1931 by co-founder Andres Soriano, who shut it down in 1939 and replaced it with Philippine Air Lines two years later. Braving the imminence of war, PAL had its inaugural flight with only five passengers from Makati to Baguio on March 15, 1941. A private entity for much of its existence, PAL was brought under government ownership in the 1970s and 1980s, reverting to private hands in the early 1990s. Today, PAL is the only privately-owned major flag carrier in Southeast Asia. Its Chairman and CEO, Dr. Lucio C. Tan, is PAL's longest-serving chief executive. Through the years, designated as the "national flag carrier" by R.A. 2232, PAL has been recognized to play a central role in boosting the growth of the Philippine economy and the emergence of a nation-wide tourism industry. Today, PAL is the Philippines' largest international airline and the only full-service Filipino air carrier offering Business Class, Premium Economy and Regular Economy services. Its fleet consists of modern high-technology aircraft such as the Boeing 777 along with the Airbus A350 and A330 for long-haul routes and the A320/A321 family for regional and domestic routes. PAL's network stretches across the world. The flag carrier operates from four hub airports (Manila, Cebu, Clark and Davao) in the Philippines to an inclusive total of 25 domestic destinations and 28 points in Asia, Australia/Oceania, the Middle East, Europe and North America.
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