The surplus, the largest quarterly profit in PAL’s 61-year history, largely made up for the P1.6-billion annual loss the flag carrier suffered in the preceding fiscal year. That deficit was caused mainly by the fallout from the Sept. 11 US terror attacks.
"This achievement is the result of an entire team pulling together at a critical juncture for the company. I could not have asked for a better start to the fiscal year," said PAL president Avelino L. Zapanta.
PAL’s fiscal year begins April 1 and ends March 31 the following year.
This year’s P983.9-million first-quarter profit was more than twice the P457.7 million net income PAL earned for the same period last year. It also surpassed the airline’s internal budget target nearly nine times over.
"The profit performance reflected PAL’s ability to adjust to the dynamics of the volatile post-Sept. 11 marketplace," said Zapanta.
PAL had to rationalize its capacity offering so that this precious resource is optimally allocated where it is most needed for greater public service.
The company also intensified its already stringent cost-cutting program, spending P343 million less on fuel and P84.4 million less on maintenance – its top two expense items – than last year.
Overall, PAL was able to reduce its operating expenditures by nearly P1 billion to a level P8.67 billion, despite having essentially the same assets and organization.
"This proved crucial as operating revenues stayed flat at P11.4 billion, leading to an operation income of P2.73 billion – 45 percent higher than a year ago," said Zapanta.
Financing charges of P1.5 billion and other charges of P251.8 million further brought down the profit figure to the bottom line of P983.9 million.
Despite carrying slightly less passengers in the domestic network and flying less flights owing to the capacity alignments, PAL still experienced significantly higher systemwide load factors for the quarter: 67.6 percent in the domestic sector and 81.1 percent in international, for an impressive 78.9 percent overall.
"This leads us to seriously study whether to add capacity," noted Zapanta.
PAL’s outstanding first-quarter performance puts the flag carrier firmly back on the growth track.
Meanwhile, PAL clarified yesterday it was not the one that asked a Makati court for relief from a P2-billion "put-option" deal with several government financial institutions but a group of stockholders in the company.