PAL Holdings boosts revenues 18% in Q1

MANILA, Philippines - PAL Holdings Inc., the parent firm of national flag carrier Philippine Airlines Inc. (PAL), booked an 18.3 percent increase in revenues in the quarter ended March amid a strong growth in passenger traffic with the launch of several international routes.

In a report to the Philippine Stock Exchange (PSE), PAL Holdings said revenues amounted to P21.65 billion in the quarter ended March or P3.34 billion higher compared to the P18.31 billion booked in the same quarter last year. 

“The increase was attributable mainly to the favorable passenger revenue performance during the quarter as a result of the 40.1 percent increase in passenger traffic mainly in international routes,” the company said.

The airline’s consolidated total comprehensive loss went up 8.3 percent to P1.08 billion for the three months ended March 31 from P1 billion in the same period last year.

The net loss of PAL Holdings declined to P931.28 million in the quarter ended March 31, 2014 from P1.25 billion loss fosted in the same period last year.

The company’s total operating expenses grew 16.6 percent to P22.45 billion from P19.24 billion due to higher expenses related to flying operations, aircraft and traffic servicing, passenger service and reservation and sales. 

Flying operations costs jumped 26.4 percent as a result of increases in aircraft lease charges, jet fuel and cockpit crew cost, offset by depreciation-flight equipment.

Furthermore, PAL Holdings booked a P1.23 billion increase in lease charges with the arrival of six Airbus A321, eight A330s, a Boeing 777 aircraft, as well as two A330 and A321 engines on operating leases starting August.

On the other hand, fuel costs went up P1.86 billion due to the increase in volume to 1.6 million barrels from 1.4 million barrels due to the operation of new international routes such as London and various Middle East  routes.

The increase in other components was countered by the decrease in maintenance and general and administrative expenses.

The airline’s maintenance expenses fell 34.8 percent to P1.82 billion from P2.79 billion as a result of lower aircraft, engine and component repair costs incurred during the current period.

As of March 31, the company’s consolidated total assets stood at P114.86 billion.

PAL president and chief operating officer Ramon S. Ang is confident that PAL would be profitable for its Fiscal Year 2014 after booking a net loss of over P11 billion last year including over P5 billion from the retirement of 20 aircraft.

“We reported a loss of $250 million from the write off of the old aircraft last year so we are confident that PAL will be profitable this year. Moving forward now, I believe we will be profitable,” Ang said earlier.

He traced the optimism to the arrival of brand new and fuel efficient aircraft as well as the launch of new destinations particularly in the US such as New York, Chicago and Florida as well as Europe including Paris, Rome, and Amsterdam.

The US Federal Aviation Administration (US-FAA) upgraded the country’s aviation safety rating back to Category 1 last April 9 after being downgraded to Category 2 in January 2008, while the European Union allowed PAL to enter European airspace in July last year.

“It is now easy to fly anywhere in Europe, the US or any new destination. But we have to wait for the viability study for those destinations,” he clarified.

PAL is now looking at “new generation” Boeing and Airbus aircraft to complete its fleet renewal program to double its fleet to 100 aircraft.