PAL Holdings dives to loss in H1

MANILA, Philippines - The parent firm of flag carrier Philippine Airlines (PAL) reported a net loss in the first half amid higher expenses and fuel costs.

In a report to the Philippine Stock Exchange PAL Holdings Inc. reported a net loss of P1.66 billion from January to June, a reversal of the P4.61 billion net income in the same period last year.

While it posted a net loss in the first semester, revenue was up 17.7 percent to P67.8 billion as of end-June from P57.6 billion in the same period a year ago.

“The increase was attributable to the growth in passenger and cargo traffic, as well as ancillary revenues, resulting from additional flight frequencies and introduction of new routes,” PAL Holdings said.

Total expenses grew 32.5 percent to P69.32 billion in the first half, up from P52.31 billion in the previous year.

“This was primarily due to higher expenses related to flying operations, maintenance, aircraft and traffic servicing, passenger service, reservation and sales and general and administrative expenses,” PAL Holdings said.

Flying operations, in particular, climbed 42 percent to P38.29 billion in the first semester from P27.03 billion last year, on account of higher fuel costs.

Fuel costs jumped 73.6 percent from January to June as average jet fuel price per barrel rose to $75 this year from $63.38 a year ago, and the carrier operated additional flights during the period.

Maintenance costs increased 34.9 percent to P9.28 billion as of end-June from the previous year’s P6.88 billion given higher engine repairs and aircraft utilization, as well as additional aircraft deliveries.

The firm’s aircraft and traffic servicing expenses rose 21 percent to P8.30 billion in the first semester from P6.88 billion in the same period a year ago, as ground handling charges and landing and take-off fees increased with more flights operated.

Passenger service expenses went up 21.5 percent to P5.99 billion in the first six months from last year’s P4.93 billion due to passenger food and cabin crew costs.