PAL HOLDINGS, Inc., the listed operator of flag carrier Philippine Airlines (PAL), saw its net income improve to P60.6 billion in 2021 from a loss of P73.1 billion a year earlier, primarily due to an increase in “other income” attributable to gain from debt settlement and condonation of debt.

The company’s revenues for 2021 reached P58.7 billion, 6.2% higher than the P55.3 billion in 2020, PAL Holdings said in its annual report released on Wednesday.

“The significant increase in revenues was mainly due to the increase in cargo revenues as air cargo has been a vital partner in delivering essential goods since the [coronavirus] pandemic,” it said.

The company’s operating expenses were cut 23.3% to P62.8 billion last year from P81.84 billion previously.

“This is mainly due to expenses related to grounded aircraft which were recognized under ‘other charges,’” it said.

Flying operations expenses decreased by P15.1 billion, 31.3% lower than the previous year’s balance of P48.4 billion.

PAL Holdings attributed the decrease to “fleet costs such as depreciation expenses and lease charges related to grounded aircraft which were recorded under ‘other charges’ and fuel expenses due to decrease in number of flights operated.”

The company saw its aircraft and traffic servicing expenses fall to P6.1 billion or 14.8% lower than the P7.2 billion previously “mainly due to lower ground handling and landing and take-off charges.”

It likewise saw passenger service expenses decline 21.3% to around P4 billion from P5.1 billion, mainly “due to decrease in number of passengers which resulted in lower passenger food and inflight.”

At the same time, PAL Holdings saw its maintenance expenses decrease by more than 19% to P10.1 billion from the previous year’s P12.4 billion due to “grounded aircraft and lower utilization of aircraft.”

The company noted that reservation and sales were lower at P3.16 billion in 2021 versus the previous year’s P3.20 billion. It attributed the decline to the “significant decrease in sales due to travel restrictions.”

It said that general and administrative expenses rose to P6.2 billion, up 11.9% from the previous year’s balance of P5.5 billion, primarily because of “restructuring expenses such as legal and professional fees.”

The company also said that “other income” of P64.4 billion recognized in 2021 was “mainly attributable to gain from debt settlement and condonation of debt,” while the charges, net of P29.4 billion in 2020, were “due to the impairment loss recognized for some of the group’s operating fleets.”

PAL Holdings shares closed 0.79% lower at P6.30 apiece on Wednesday. — Arjay L. Balinbin