PAL swings to P489-m profit

Manila Standard Today
August 25, 2012
By Lailany P. Gomez

Philippine Airlines, the country's first flag carrier, is back in the black after posting increased revenues in the first quarter of its fiscal year ending June.

PAL Holdings said in a disclosure to the Philippine Stock Exchange Friday that the total comprehensive income in the April-to-June period hit P489.2 million, a turnaround from a loss of P475.1 million year-on-year, due mainly to higher passenger traffic.

Total revenues in the first quarter amounted to P20.78 billion, up 5.8 percent from last year's P19.64 billion.

PAL attributed the increased revenues to higher passenger income, brought about by a 6.9-percent improvement in yields generated from promotional seat offerings and growth in traffic.

Revenues also include lease income from arrangements with an entity under common control.

Total expenses rose 1 percent to P20.29 billion from P20.09 billion on year.

The company attributed the slightly higher expenses to maintenance, passenger service, general and administrative and other expenses offset by the decrease in flying operations.

Maintenance expenses rose 20.9 percent from last year's P1.78 billion as a result of higher engine and component repair costs incurred during the current period.

Growth in the passenger traffic, especially on international flights, increased passenger service expenses by 3.3 percent to P1.30 billion.

Costs incurred related to the financing and delivery of one Boeing 777-300ER aircraft increased general and administrative expenses by P45.8 million, or 7.6 percent from last year's P604.9 million.

Flying operations improved by P212 million, mainly contributed by lower fuel costs and depreciation of flight equipment that was countered by the increase in aircraft lease rentals.

Jet fuel, which remains PAL's biggest operating expense, registered a 3.4 percent decrease over last year's P9.11 billion after average jet fuel price per barrel decreased from $138 in 2011 to $135.60 in 2012.

In April this year, San Miguel Equity Investments Inc., a wholly-owned subsidiary of San Miguel corp., acquired a 49 percent equity interest in Trustmark Holdings Corp. Trustmark owns 97.71 percent of PAL Holdings, which in turn beneficially owns 84.67 percent of PAL.

Ramon Ang, PAL president, had said the airline would return to profitability in 2013.