PAL parent firm reports P1.46B in net loss

MANILA, Philippines—Lucio Tan’s PAL Holdings Inc., the parent company of flag carrier Philippine Airlines, posted a net loss of P1.459 billion in October to December 2011, the listed firm reported this week.

This followed the reporting last week by subsidiary PAL of a $33.5-million net loss during the same period, which was blamed on disruptions in operations due to labor woes.

The three-month period is third quarter of PAL’s fiscal year, which starts in April and ends in March.

From April to December 2011, PAL Holdings said its losses reached P3.6 billion, down from a net income of P3.2 billion in the same period a year ago.

“Consolidated revenue was down by 2 percent from P55.2 billion in the same period a year ago. The decline in revenue can be attributed to the decrease in passenger and cargo revenues by 13 percent,” PAL Holdings said.

In October, PAL was forced to operate at a significantly reduced capacity amid the implementation of its operational restructuring, which involved the closure of three key departments and retrenchment of 2,600 people.

The legality of PAL’s restructuring was questioned by the company’s biggest labor union, PAL Employees’ Association, before the Court of Appeals. The case is still pending.

Aside from the revenue drop, PAL Holdings said it also suffered from a significant rise in fuel prices in the period. It said total expenses rose by 12 percent, driven mainly by the higher cost of jet fuel, which averaged $133 per barrel in 2011 from $98 in 2010.

At the end of 2011, PAL said jet fuel accounted for more than 50 percent of total expenses, up from 39 percent a year earlier.

The company said its losses were slightly tempered by a 9-percent increase in “other revenues,” mainly the leasing of PAL’s lease Airbus jets to sister firm AirPhil Express and excess baggage charges.