The operator of flag carrier Philippine Airlines swung to a loss in 2017 as expenses soar. PAL Holdings Inc., in a stock exchange filing yesterday, said losses last year amounted to P7.33 billion compared to a profit of P4.13 billion in 2016.
The decline came even as demand for air travel remained strong. PAL Holdings said passenger revenue last year reached P110.64 billion, up 14 percent, as it served more people and added flights. Cargo and ancillary revenues were also up.
PAL Holdings’ overall revenue for 2017 hit P129.5 billion, up 13.2 percent.
However, expenses jumped 26.7 percent to P136 billion, or more than what PAL Holdings earned from its sales.
“The main drivers for the growth are attributable to flying operations expenses, maintenance, passenger service, aircraft and traffic servicing, and reservation and sales,” PAL Holdings noted.
It is normal for expenses to increase as an airline ramps up operations. However, PAL Holdings noted a big jump in fuel costs, a major operating expense.
Listed under flying operations, PAL Holdings said it spent P37.7 billion for jet fuel in 2017, higher by 44 percent compared to 2016 level.
It said the average price of jet fuel rose to $75.59 a barrel last year from $67.57. PAL added that aircraft lease rentals rose to P14.1 billion in 2017 from P11.6 billion in 2016 as it increased its fleet of Boeing 777-300ERs and Airbus A320s.
Overall, flying operations last year jumped 31.7 percent to P67.3 billion.
PAL Holdings’ results showed that demand was on the uptrend. The flag carrier flew some 14.5 million passengers last year from 13.4 million in 2016.
“During the year, new international points and city pairs were introduced. Flights between Clark and Seoul, Cebu and Chengdu, Kalibo and Chengdu, Kalibo and Guangzhou and Cebu and Bangkok and daily service to Kuala Lumpur commenced,” PAL Holding said.