PAL incurs loss in 2Q on higher fuel costs

The Manila Times
November 19, 2011
By Darwin G. Amojelar

PHILIPPINE Airlines on Friday said it suffered a net loss in the second quarter of its fiscal year ending March next year mostly because of skyrocketing jet fuel costs.
In a filing with the Securities and Exchange Commission, PAL said its total comprehensive losses in the July to September period amounted to $39.4 million, higher than the $26.7-million net loss in the same period last year.

Revenues reached $420.4 million, reflecting a 4.7 percent improvement over the year ago figure of $401.6 million for the same three month period.

Expenses grew 22.6 percent year-on-year to $459.7 million.

Jet fuel, which remains the flag carrier’s biggest expense, contributed the largest increase at 33.9 percent from $142.5 million in 2010 to $190.8 million for the current three-month period. Average jet fuel prices rose from $94.92 per barrel to $131.99 per barrel this year.

Citing data released by the International Air Transport Association, PAL said the airline industry in general achieved growth in passenger traffic year-on-year as of September by an average of 6.3 percent.

However, operating results in recent months are showing a decline in both passenger and cargo traffic, reflecting a reluctance for both business and leisure travel spawned by problems in the US and European economies. Going forward, IATA reports indicate more difficult times ahead for the airline industry as various countries continue to be plagued with economic uncertainty and cost-induced yield compression.