PAL Holdings Inc., the listed operator of flag carrier Philippine Airlines, saw profits surge in the nine months through September this year as demand for air travel remained strong while oil prices stayed low.
PAL Holdings said in a stock exchange filing that profit during the period hit P6 billion, higher than the P233.88 million booked in the same period last year. Total revenues, mainly from ticket sales, rose 10.8 percent to P81.98 billion.
PAL Holdings said passenger volume increased by about 30 percent, mainly in the US, Australia, Japan and Middle East routes. This, “coupled [with] the effect of interlining arrangement with PAL Express in the domestic sectors, contributed to the favorable revenue performance during the current period.”
PAL Holdings also cited gains in excess baggage revenues, ancillary revenues and lease income.
The low oil price environment also allowed the firm to post savings. Jet fuel costs represent the firm’s biggest expense.
During the period in review, PAL Holdings said fuel costs were cut to P22.76 billion from P29.13 billion as average jet fuel prices declined to $86.56 from $129.73 per barrel.
“However, this was countered by the increase in aircraft lease charges, transportation expense and cockpit crew costs. Aircraft lease charges went up by P3.89 billion due to the acquisition of seven A321s and three A330 HGWs,” PAL Holdings said.
The airline operator said total expenses during the period moderately increased by P3.26 billion or 4.5 percent. These came from expenses related to maintenance, passenger service, general and administrative operations as well as reservation and sales.
For the January to September 2015 period, PAL Holdings also recognized “other income” of P1.63 billion against P225.4 million the previous year. It said this was mainly due to the income generated from the sale of shares in Abacus International Holdings Ltd. this year.
Due to the expected growth in air travel, company president Jaime Bautista earlier said the carrier would spend at least $500 million next year to acquire seven new planes, including long-range Boeing 777-300ERs.