PAL in the red as Lucio Tan returns
The listed owner and operator of flag carrier Philippine Airlines remained unprofitable in the third quarter of 2014 as tycoon Lucio Tan returned to the carrier’s helm.
PAL Holdings reported a third quarter 2014 net loss of P316.6 million, albeit narrower than its P1.14 billion loss during the same period in 2013.
The decline came as PAL Holdings said revenues during the quarter, the start of the so-called “lean season” for airlines, improved by about 39 percent to P25.03 billion.
“The increase was attributable mainly to the favorable passenger revenue performance during the quarter. This was brought about mainly by the introduction of new routes such as London, Abu Dhabi, Dammam, Riyadh, Canton and Haneda, Japan in international operations,” PAL Holdings said.
Tan’s group retook full control of the airline last month, after previously agreeing to acquire San Miguel Corp.’s 49 percent stake for $1.3 billion in September, ending the latter’s two year stint as airline manager and shareholder.
PAL Holdings said in its filing that revenues during the nine months through September 2014 hit P73.98 billion, while net income was P233.7 million. It did not provide comparative figures Monday since it was still reporting earnings under the fiscal year method back in 2013.
PAL Holdings booked a profit in the first half of 2014, partly because that period included the travel-heavy summer months.
In its third quarter filing, PAL Holdings added that total operating expenses grew over a quarter to P25 billion, as it ramped up operations. Fuel costs, the biggest component of this expense, was up by 25 percent to P9.8 billion, the filing showed.
“This was brought about mainly by the increase in consumption in 2014 as a result of the introduction of new long haul international routes to London and the Middle East and increase in domestic flights,” PAL Holdings said. It noted that fuel prices during the period also increased from $126.36 per barrel to $ 128.49.
The carrier pointed out that gain on the sale and leaseback of Airbus A330 and A321 planes helped offset expenses related to the grounding of old planes, in line with its reflecting initiatives.
Philippine Airlines president Jaime Bautista said last week they were still aiming to return to a profit by the end of 2014, though that outcome will depend on how well the carrier performs during the December peak season.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.