PAL Holdings Inc., the operator of Philippine Airlines Inc., swung to a loss in the first quarter of its fiscal year ending March as revenue declined due to low passenger traffic during the period.
A filing in the Philippine Stock Exchange showed that PAL Holdings booked a net loss of P1.06 billion from April to June, reversing a profit of P418.57 million in the same period last year.
PAL Holdings, which is owned by San Miguel Corp. and the group of tycoon Lucio Tan, said revenue declined by 10.8 percent to P18.54 billion on what it described as “unfavorable passenger revenue.”
PAL Holdings noted a 21.5-percent drop in passenger traffic. The airline has been struggling to maintain consistent profitability amid growing competition from budget carriers operating in the country and abroad.
The company’s expenses also dipped by 3.3 percent to P19.62 billion, its filing showed.
“This was largely on account of lower expenses related to flying operations, aircraft and traffic servicing countered by the increase in maintenance, passenger service, reservation and sales, and financing charges,” it said.
PAL Holdings, however, noted an 8.2-percent increase in passenger service expenses to P1.4 billion due to costs associated with cabin crew benefits and food served to passengers.
The airline is in the midst of a re-fleeting program involving the acquisition of as many as 65 planes valued at about $9.5 billion.
The plan will allow Philippine Airlines to expand its routes. The expansion is expected to translate to additional revenue.
The airline on July 12 was allowed by the European Union to fly to its member-states after a ban was lifted selectively.
Philippine Airlines is in separate talks to acquire a minority stake in Cambodia Airlines Co. Ltd. However, the closing date for the deal has been moved to Oct. 15 from July 15. The move is aimed at boosting revenue, company president Ramon S. Ang had said.