Tax bill pulled down PAL income in 2016

The operator of flag carrier Philippine Airlines said 2016 earnings slid almost 38 percent, despite higher passengers sales, mainly as the company paid a steep tax bill.

Listed PAL Holdings Inc. said in a stock exchange filing on Tuesday that net income last year hit P3.53 billion, down from P5.77 billion in 2015.

PAL Holdings said in its annual report that a reassessment was done on “deferred tax assets and liabilities”, alongside its current income tax. This resulted in an income tax expense of P2.16 billion for 2016, compared with P47.4 million in 2015.

PAL Holdings, which may soon welcome a new foreign airline investor sometime this year, its management had said, disclosed that its core business continued to show growth, although expenses rose faster in 2016 as it ramped up operations, adding planes and flights.

PAL Holdings said total revenues last year rose 7.2 percent to P116.6 billion. Over 80 percent of these came from passenger revenues, which rose 7.1 percent to P96.3 billion. Cargo revenues dropped almost 4 percent to P6.9 billion while ancillary (non-ticket fare) sales jumped 24 percent to P9.76 billion.

According to the company, PAL carried 13.3 million passengers last year, which is 12 percent higher than in 2015. PAL Holdings president Jaime Bautista said earlier the company was seeking to carry some 15 million passengers this year.

“During the year, PAL introduced new destinations namely Kuwait, Jeddah, Doha and Saipan and new services between Cebu and Los Angeles, Cebu and Singapore, Osaka via Taipei, Cebu and Caticlan, and Clark and Caticlan,” PAL Holdings said.

PAL Holdings ended 2016 with 82 planes, mainly Airbus A320s and A321s. Its long-range fleet was comprised of 8 Boeing 777-300ERs, 15 Airbus A330-300s and six A340s.