The operator of flag carrier Philippine Airlines (PAL) said its losses widened by 137 percent in 2019 as it was hit by higher financing charges for new planes.
PAL Holdings Inc. said in a stock exchange filing on Wednesday that losses last year hit P10.31 billion. This marked its third consecutive year in the red and came despite a slight increase in revenues and lower expenses.
Given an increase in passenger ticket sales, PAL’s revenue last year hit P154.5 billion, up 2.7 percent. PAL carried 16.76 million passengers in 2019, an increase of 4 percent, while total roundtrips went up 9 percent to 61,396. Expenses were also down by 3 percent, partly as the price of jet fuel went down.
PAL’s financing costs, however, went up 128.4 percent to P12 billion. The company said this was due to added aircraft financing and a change in accounting standards on its lease payments.
This followed the adoption of Philippine Financial Reporting Standards 16 in line with more transparent financial reporting standards around the world.
The rules affected how operating lease contracts, previously kept off the balance sheet, were reported.
PAL Holdings ended 2019 with 97 aircraft, with most of its fleet under lease. These included 10 Boeing 777-300ERs, six Airbus A350-900s, 15 A330-300s, 24 A321-231s, six A321N, one Airbus 321-271NX, 13 A320-200s and 10 Bombardier DHC 8-400 NG.
Plans for recovery have also been disrupted by the new coronavirus pandemic in 2020. As a result, PAL’s regular flights have been suspended since the middle of March as strict quarantine measures were implemented.
PAL said it was preparing to restart flights “although likely on a much-reduced scale of scheduled flights, which will gradually ramp up as demand recovers.”
The flag carrier added that it was “exploring new sources of income while implementing cost-saving initiatives.”