In the first half of its fiscal year, however, PAL posted a net income of $23 million, up 16 percent from $19.9 million a year earlier.
In a financial report filed with the Securities and Exchange Commission (SEC), PAL said net operating revenues reached $242.6 million in July to September this year, up five percent from the year ago’s $230.4 million. The increase was driven by higher passenger revenues amounting to $13.1 million.
Operating expenses, on the other hand, grew nine percent to $208.3 million, mainly due to higher maintenance costs.
"Higher aircraft, component and engine repair costs incurred during the quarter of the current fiscal year had the effect of increasing the maintenance cost by 47 percent or $16.4 million from last year’s quarter total of $35.2 million," PAL said.
Fuel cost, on the other hand, rose six percent, mainly brought about by higher fuel consumption as well as inthe average fuel prices per barrel of aviation fuel from $49.54 for the second quarter ended 2004 to 52.13 for 2005.
PAL said the increase in total operating expenses, which more than offset the increase in net operating revenues resulted in a lower income margin from operations by 33 percent.
As of end-September this year, PAL had total assets of $2.16 billion as against liabilities of $42.9 million.
PAL is acquiring 18 units of Airbus A320 for $840 million. The move is in line with its fleet modernization program aimed at cutting costs and further strengthening its dominant foothold in the industry.
The new Airbus A320, which will serve regional and domestic routes, will be delivered starting in the second half of next year until 2008.
At present, PAL has an operating fleet of 31 aircraft consisting of B747-400s, A340-300s, A330-300s, A320-200s, B737-400s and B737-300s with average aircraft age of 9.01 years.
PAL has been up-to-date in the payment of its obligations to creditors. From $2 billion in 1999, PAL’s debt is now down to just $1 billion.
Last year, PAL made payments for principal and interest to its creditors in accordance with the terms embodied in the amended and restated rehabilitation plan. From March 1999 to March 2005, PAL paid a total of $1.43 billion to its creditors.
PAL is also planning to increase its flights to San Francisco and Los Angeles. It is also studying the possibility of flying to Seattle.
It was earlier considering resuming flights to India and European countries to take advantage of the booming information technology industry in India.
From its hub in Manila, PAL serves 43 destinations – 18 domestic and 25 international points.
Amid the escalating prices of crude oil, PAL is hopeful it could retain the same profit level as last year. The national flag carrier posted a net income of P1.2 billion for the fiscal year 2004 to 2005 compared with a restated net loss of P643 million the previous level.