Philippine Airlines (PAL) has reported a big improvement in profitability, posting a record net comprehensive income of $85 million for the first quarter of 2015 from the $20.7 million net loss incurred in the same period last year.
In a filing with the Securities and Exchange Commission, PAL reported total revenues from January to March 2015 increased 30 percent to $627 million, from $482.4 million 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 airline also embarked in more aggressive marketing and sales campaigns resulting in improved yields per passenger revenue kilometer flown.
Total operating expenses in the first quarter amounted to $556 million, 11 percent higher than last year’s same period figure of $500.3 million, due largely to growth in passenger volume as a result of operating more flights.
However, the revenue surge outpaced the rise in operating expenses. The increase in operating expenses was tempered mainly by the decline in fuel costs. Jet fuel prices dropped dramatically from an average of $130.92 per barrel from January to March 2014 to $83.28 per barrel for the same period in 2015.
In the first quarter of 2015, PAL took delivery of two brand new Airbus 321s and disposed of four aging Airbus 340 and two Airbus 330 airplanes.
PAL also returned to New York starting 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 re-opening of the Cebu hub.
The airline operated a total of 10,948 roundtrip flights and served almost three million passengers in the first quarter of 2015. The 2014 results revealed a remarkable performance by PAL on the core operating front.
Operating revenue jumped 75 percent to $2.28 billion as passenger carriage soared and yields improved, leading to an operating profit of $54.2 million—reversing the operating loss of $127.1 million in 2013.
The first quarter profit sustained gains from 2014, PAL said. For that year, the flag carrier earlier reported a total comprehensive income of $20.4 million, breaking a three-year losing streak and setting the airline on a path to sustained growth.