PAL sustains profitability, nets P3.79B in Q1 2015

MANILA, Philippines – The operator of Philippine Airlines Incorporated (PAL) opened 2015 on a positive note, as it rides on stronger passenger traffic of new international routes.

PAL Holdings, Incorporated said in a statement Monday, May 4 that it registered a net income of P3.79 billion ($85 million) for the first quarter of 2015, a huge comeback from the P923.74 million ($20.72 million) net loss incurred in the same period last year.

“This was attributed mainly to an increase in passenger traffic after new international destinations were opened, as well as the expansion in domestic route network following an enhanced commercial arrangement with PAL Express,” the flag carrier said in the statement.

PAL returned to New York on March 15, with service via Vancouver. Several domestic routes were added to the network such as thrice weekly flights to Tablas in Romblon, and the reopening of the Cebu hub.

The flag carrier said that it operated a total of 10,948 roundtrip flights and served about 3 million passengers in the first quarter of 2015.

This was after it returned to profitability in 2014 with a net income of P910.36 million ($20.42 million), breaking a 3-year losing streak.

Improving yields

Citing a filing with the Securities and Exchange Commission (SEC), PAL said its total revenues from January to March 2015 surged by 30% P27.98 billion (to $627.49 million), from P21.53 billion ($482.84 million) in the same period in 2014.

PAL said the increase in its total revenues is partly because of “more aggressive marketing and sales campaigns resulting in improved yields per passenger revenue kilometer flown.”

Its total operating expenses during the first quarter amounted to P24.79 million ($556 million), 11% higher than last year’s P22.31 million ($500.30 million) mainly because of increased flight operations.

The upsurge in total revenues, however, outpaced increase in operating expenses. PAL said that expenses were tempered mainly by the decline in fuel costs – the biggest chunk of PAL’s operating outlay.

Jet fuel prices dropped dramatically to P3,717.24 ($83.28) per barrel from January to March 2015 from P5,843.68($130.92) per barrel in the same period last year.

During the first quarter of 2015, PAL said it took delivery of two brand new Airbus 321s and disposed of 4 dated Airbus 340 and two Airbus 330 airplanes.

“We need to consolidate and build on these gains to strengthen the foundation for future growth, aware that we operate in a very volatile environment,” PAL President Jaime J. Bautista said in the statement.

“As always, we remain focused on our goal of transforming PAL into the airline of choice in all markets it serves,” he added.

In November, independent aviation think tank Center for Asia-Pacific Aviation said that PAL’s outlook is not all gloom as the Philippine market is now relatively strong, boosted by a reduction in the number of domestic competitors, the restoration of Category 1, and a relatively strong economy.

“But PAL first needs to adjust its fleet plan to a more rational level and get the right mix.” (READ: Clipping PAL’s ‘too many wings’) – Rappler.com

$1 = P44.64