PAL posted net loss of $33M in Oct-Dec
Flag carrier Philippine Airlines (PAL) continued to lose money in the third quarter of its fiscal year, as it struggled with disruptions in operations due to labor issues, exacerbated by the continued rise in fuel prices.
In a filing with the Securities and Exchange Commission on Friday, the flag carrier said total revenue dropped by 3.8 percent year-on-year to $386 million in October to December—the third quarter of its current fiscal year ending March 31, 2012.
This led to a net loss of $33 million for the three-month period, a reversal from the $15.1 million profit the company posted a year earlier.
“PAL experienced weak passenger demand as well as declining cargo markets as the world economy struggled to recover,” PAL said.
“While there were improvements in yields for both passenger and cargo compared to the same period last year, load factors lagged behind,” it added.
At the start of the said quarter, the airline struggled to keep operations normal following a “sit-down” strike by its workers who were protesting their eventual retrenchment.
PAL implemented the job cuts in early October following the closure of three departments, namely in-flight catering, airport services and call center reservations.
PAL had hired three sub-contractors to replace the closed units but two of the companies—Sky Kitchen and Sky Logistics owned by Cebu-based businessman Manny Osmena—failed to provide enough employees to compensate for the retrenched PAL workers.
As a result, PAL had been forced to operate at a severely reduced capacity during the holiday season in November and December.
The company, however, said the retrenchment of workers was a necessary move, driven by the airline’s “desire to reduce and rationalize costs.”
“As the airline goes through its last quarter of fiscal year 2011-2012, it continues to seek ways of enhancing revenues and lowering costs,” PAL said.
The airline also said total operating expenses amounted to $419.5 million, up by $34.8 million or 9 percent from the level in the same quarter in fiscal year 2010-2011. This was driven mainly by higher jet fuel costs that continued to put pressure on the airline’s bottom line.
The company said fuel prices rose to $129.75 per barrel in October to December 2011 from an average of $100.96 per barrel in the same period the previous year.
