THE listed operators of Philippine Airlines (PAL) and Cebu Pacific expect to see better financial performance in the fourth quarter, as jet fuel prices have gone down.
PAL Corporate Communications Vice-President Jose E. L. Perez de Tagle said the flag carrier is aiming to trim its losses in the fourth quarter, noting the lower price of jet fuel will help achieve its goal.
“[W]e still see that the markets are growing. Our revenues are increasing… We still expect growth and we expect that to continue over the next few months and well into the year afterwards,” he told reporters in a chance interview on Monday.
PAL Holdings reported a lower net loss of P2.5 billion in the third quarter, versus a net loss of P2.95 billion a year ago, as the airline mounted additional flight frequencies and launched new routes.
Alexander G. Lao, president and CEO of Cebu Pacific subsdiary Cebgo, noted the budget carrier’s third quarter was weak due to a combination of factors — high jet fuel prices, peso depreciation, and the low season.
“But those things, we’re seeing the reverse so far in the fourth quarter… That will certainly help our bottomline, not just ourselves, but all the other airlines. Hopefully we’re able to do something positive in Q4,” Mr. Lao told reporters.
Cebu Pacific, on the other hand, swung to a loss of P518 million in the third quarter from a profit of P42 million in the same period last year, which it attributed to rising jet fuel costs and the weakening of the peso against the US dollar.
PAL and Cebu Pacific implemented a Level 3 fuel surcharge starting September, which translates to a P74 to P291 added charge on domestic flights, and P381 to P3,632 for international flights, depending on distance traveled.
Although the fuel surcharge helped Cebu Pacific recover some of its losses, Mr. Lao said the airline has to keep ticket prices in check to remain competitive in a price-sensitive market like the Philippines.
“We have to make sure we can compete. So if our competitor for example doesn’t charge fuel surcharge, sometimes you have to make adjustments in the fares just to be able to stimulate passenger demand,” Mr. Lao said.
Mr. Perez de Tagle said PAL still has to closely monitor how the market will react to another increase in fuel surcharge before implementing it.
The Civil Aeronautics Board (CAB) approved a Level 4 fuel surcharge in November, but airlines decided not to raise ticket prices.
The world price of jet fuel according to the International Air Transport Association (IATA) stood at $79.94 per barrel as of Nov. 30, down 3% versus a year ago and down 19.8% versus last month. — Denise A. Valdez