Philippine Airlines’ profit descends despite higher top line

The operator of Philippine Airlines (PAL) ended the first quarter with less profit despite stronger passenger revenues as expenses soared due to busier operations.

In a disclosure on Thursday, PAL Holdings Inc. reported that net income attributable to the parent company dropped by 23 percent to P3.6 billion in the first three months of this year from P4.65 billion in the same period last year.

Consolidated revenues were up 8.51 percent to P45.8 billion. Bulk of the top line figures were attributed to passenger revenues, which grew by 7.25 percent to P40.35 billion. However, higher operating costs weighed down the bottom line of the flag carrier. Flying expenses rose by 8.56 percent to P21.15 billion in the first quarter as the number of flights operated increased by 13 percent to 28,000.

The increase in aircraft use also drove maintenance expenses by 12 percent to P5.52 billion in the January-March period.

“Our positive bottom line confirms that we are on track with our growth strategies, in the areas of fleet growth, route network expansion and service innovations,” PAL president and chief operating officer Stanley Ng said in a statement.

But Ng said the aviation sector has been dealing with supply chain issues that prolong the maintenance period of aircraft, affecting fleet availability as a result.

He said PAL is “determined to address these challenges,” acquiring additional aircraft to augment its fleet. The flag carrier currently has five jets grounded due to delayed maintenance.

The airline set aside $450 million for capital expenditures this year, allocating four-fifths of the amount to the refurbishment of its A321ceo units, maintenance and upgrades of other jets, and payments for new aircraft.

The flag carrier is expecting delivery of 13 Airbus 321-231 neo (new engine option) aircraft between 2026 and 2029. It is also set to receive nine Airbus A350-1000 jets between 2025 and 2027.The airline currently operates a 78-jet fleet.

Earlier this year, PAL announced the launch of direct flights between Manila and Seattle in Washington state by Oct. 2. This route will be offered thrice weekly.

Seattle will be PAL’s sixth route to the United States, including Los Angeles, San Francisco, New York, Honolulu and Guam.

In addition, PAL is looking into reviving old routes, including Cebu-Osaka and Manila-Sapporo, this year to service the growing demand for flights to Japan.

The Lucio Tan-led carrier is targeting to service around 16 million passengers this year as it targets to restore volume to prepandemic level. Its passenger volume swelled by 58 percent to 14.68 million last year.