Philippine Airlines Quarterly Profit Soars 101%

Continuing its recent run of profits, Philippine Airlines has reported an unaudited net income of US$34.5 million for April-to-June 2007, a 101% surge from the US$17.2 million profit registered in the same period in 2006.

The better-than-expected quarterly performance was a result of the airline’s ability to capitalize on strong passenger demand during this peak travel quarter in the highly seasonal business it operates under.

“It confirms that we are now restructured to achieve sustained profitability and validates our decision to exit receivership as soon as possible,” said PAL president Jaime J. Bautista.

The flag carrier is in the process of securing Securities and Exchange Commission (SEC) approval, expected before year-end, to move out of a receivership program it entered in 1998. The following year, the SEC approved a rehabilitation plan that has guided the airline’s operations ever since.

Bautista said the profit would be plowed back into operations as PAL pursues several initiatives to enhance its products and services, including a comprehensive fleet renewal program, as well as systems, technology and infrastructure upgrades.

The April-to-June profit was sparked by higher traffic on PAL’s routes, which cover 41 domestic and international points. The airline carried close to 2 million passengers on 5,771 flights during the quarter, up about 5% and 7%, respectively, from the same period in 2006.

Passenger load factor rose appreciably to 82.18% – PAL’s highest in over a decade – from 79.32% a year earlier, in yet another sign of the flag carrier’s improved performance.

These pushed up total revenues for the quarter to US$373.4 million, 13% higher than the year-ago level of US$331.2 million.

 But expenses for the quarter also increased, by 8%, to US$338.9 million, as PAL continued to grapple with persistently high jet-fuel prices, a non-controllable yet significant cost determinant.

 However, the airline did manage to keep a tight rein on other expenses, resulting in major savings. For instance, aircraft maintenance, traditionally the second-biggest expense item for the airline, saw a substantial drop of US$5.7 million or 12% to US$42.9 million for the quarter, as intensive cost-control efforts bore fruit.

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