PAL turns around with profit of $72.5M on 23% revenue jump
Flag carrier Philippine Airlines (PAL) posted a healthy $72.5-million profit for its fiscal year ending March, a turnaround from its $14.4-million loss last year.
In a statement, the company said this came as revenues rose 23 percent to $1.67 billion, supported by growing passenger and traffic volumes of 12.4 percent and 41.8 percent, respectively.
“Increases in passenger yields also complemented the growth in traffic volume,” the Lucio Tan-led carrier said Friday.
But the airline warned that its continuing profitability remained at risk due to volatile factors affecting the industry.
“While PAL is pleased with its recent positive performance, [we] remain watchful of the year ahead as fuel prices continue their upward trend,” it said, noting a gradual slowdown in traffic demand especially for leisure travellers.
About 40 percent of PAL’s expenses go to fuel. PAL noted that total expenses for the year totaled $1.61 billion, up 19 percent from last year’s $1.35 billion.
Jet fuel expenses, which continues to be the airline’s biggest spending item, rose by $142 million or 29.9 percent. During the 12-month period from April 2010 to March 2011, jet fuel prices averaged $102.89 a barrel compared to $86.94 the year before.
The company said the problem of volatile fuel prices might be made worse by the “devastating” earthquake and tsunami in Japan coupled with political unrest in the Middle East and North Africa.
“These factors also pose a serious threat to the flag carrier’s fragile bottom line,” the airline said.
PAL has been implementing several cost-cutting measures since it returned to profitability and exited corporate rehabilitation in 2007.
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