PAL posts loss in Q1 as oil prices rise
The operator of flag carrier Philippine Airlines swung to a loss in the first quarter of 2017 following a sharp increase in oil prices, whose fall has been a boon to the industry in recent years.
In a stock exchange filing, PAL Holdings Inc. said it posted a net loss of P1.13 billion from January to March this year, a reversal from the P2.9-billion profit announced in the same period in 2016.
The carrier, nevertheless, saw better sales during the period. PAL Holdings said total revenues hit P33.32 billion in the first quarter, up 14.4 percent, as it added more flights and served more passengers. However, this was not enough to offset a steep increase in costs.
PAL Holdings said total expenses during the quarter jumped 32.4 percent to P34.35 billion. It cited higher flying operations, maintenance costs, aircraft and traffic servicing expenses, among others.
Flying operations alone jumped 34.5 percent on higher fuel spending and aircraft lease charges.
“Fuel costs increased by 52.9 percent due to the increase in average fuel price per barrel in 2017 to $76.15 from $58.16 in 2016 and higher fuel consumption as a result of the increase in number of flights,” PAL Holdings noted.
It said leasing costs went up on payments associated with two additional Boeing 777-300ERs late last year. PAL ended the quarter with 82 planes.
PAL Holdings president Jaime Bautista earlier warned that 2017 would be challenging for the airline, as oil prices inch higher and as PAL faces tougher competition, crimping margins.
