PAL stays in the black from Jan to Sept 2014

MANILA, Philippines – The listed parent firm of flag carrier Philippine Airlines Inc (PAL) managed to stay in the black in the first 9 months of the year despite booking losses in the 3rd quarter of the year.

PAL Holdings Inc booked a net loss of P322.16 million ($7.17 million) or 72%  in end-September 2014, better than the P1.16 billion ($25.80 million) net loss booked in the same period last year, the firm said in a financial report submitted to the Philippine Stock Exchange (PSE).

PAL also reported a net income of P237.96 million ($5.29 million) in the first 9 months of 2014, a complete reversal of the P2.24 billion ($49.83 million) net loss booked in the first 6 months of its fiscal calendar in 2013.

The airline shifted to a calendar year in 2014 from the previous fiscal year that ended March, thus January to September 2014 could only be compared to the period April to September 2013 since January to March 2013 was part of another fiscal year period, PAL explained.

The third quarter could be a very good season for major players in the airline industry, PAL president and chief operating officer Jaime Bautista said.

“… The lean season starts October and November but December will be a very good month which will recover the losses incurred in October and November,” Bautista said.

PAL’s revenues grew 39% to P25.03 billion ($556.66 million) in the 3^rd quarter 2014 from P18.02 billion ($400.76 million) in the same period in 2013, mainly due to the favorable passenger revenue performance, along with the interlining arrangement of PAL with PAL Express in domestic operations.

Expenses, meanwhile, rose 25.3% to P25.16 billion ($559.55 million) from P20.07 billion ($446.35  million), attributed to higher expenses related to flying operations, aircraft and traffic servicing, passenger service, reservation and sales countered by the decrease in general and administrative expenses, along with maintenance expense, the airline said.

Fuel costs – the biggest chunk of PAL’s operating expense – increased by 25% to P9.89 billion ($219.95 million) due to consumption increase this year, attributed to the introduction of new long haul, international routes to London and the Middle East.

The increase in domestic flights and upsurge in the price of aviation fuel to $128.49 per barrel from $126.36 also contributed to the uptick in operating expenses.

Revenues, meanwhile, doubled to P73.98 billion ($1.65 billion) in the first 9 months this year from P36.54 billion ($813.08 million) in the first 6 months of its fiscal year in 2013 amid higher passenger and cargo volume.

Passenger revenues also jumped 104% to P60.78 billion ($1.35 billion) from P29.82 billion ($663.55 million) as PAL carried 6.9 million passengers from January to September 2014, versus the 3.4 million from April to September 2013.

The airline industry is a very seasonal industry with December and January as peak months due to the Christmas holidays. February is a lean month but travel picks up in March, April, May, and June due to summer.

Travel for the month of July, August, and September also weakens and further declines in October and November. – Rappler.com

*$1 = P44.94