PAL Holdings, Inc. narrowed its net loss last year, on the back of higher revenues as it ferried nearly 16 million passengers.
In a regulatory filing, the listed operator of Philippine Airlines (PAL) reported an attributable net loss of P4.330 billion in 2018, lower by 41% from its attributable net loss of P7.334 billion in the year prior.
Revenues of PAL Holdings jumped 16.2% to P150.4 billion last year from P129.5 billion the previous year. This was driven by a 16% rise in passenger revenues to P128.4 billion due to “the increase in the volume of passengers carried and number of flights operated.”
“PAL operated 112,072 flights and carried 15.9 million passengers in 2018 vis-à-vis 103,362 flights and 14.5 million passengers in 2017,” the company said.
PAL’s international route network covers 39 cities in 18 countries as of end-December 2018.
Cargo revenues grew 21.7% to P10.217 billion on higher volume, while ancillary revenues went up by 14.8% to P11.564 billion due to passenger growth.
On the other hand, the PAL operator saw consolidated expenses surge 17.8% to P155.7 billion due to the higher cost of flying operations last year.
“The increase in flying operations expenses was attributable to fuel costs and lease charges. Fuel consumption increased by P13.9 billion from P38.4 billion in 2017 to P52.3 billion in 2018. The increase was mainly due to the escalation in jet fuel prices from an average of $75.59 per barrel in 2017 to $94.38 per barrel in 2018,” it said.
PAL Holdings said lease charges grew by P3.7 billion as the airline took delivery of a total of 11 aircraft since December 2017 through end-2018.
Other factors for the higher expenses are the rise in aircraft and traffic servicing expenses by 9.5% to P19.5 billion; maintenance costs by 7.8% to P20.9 billion; and reservation and sales expenses by 12.4% to P10.8 billion.
Total other charges shrunk 42.7% to P2.2 billion from P3.8 billion in 2017. “The reduction in expense by P1.6 billion was primarily due to the reversal of provision for contingency for the Flight Attendants and Stewards Association of the Philippines (FASAP) case as a result of Supreme Court’s final decision dated September 18, 2018 in favor of PAL,” it said.
Earlier this year, PAL Holdings sealed the deal to sell 9.5% of its outstanding shares to Japanese firm ANA Holdings, Inc. for $95 million. PAL President Jaime J. Bautista had earlier said getting a strategic investor in the company is expect to help it expand to become a five-star carrier. — Denise A. Valdez