PAL reports 13.2% growth in revenues at P129.5 B; net income down at P109 B » Manila Bulletin Business

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PAL reports 13.2% growth in revenues at P129.5 B; net income down at P109 B

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By Emmie V. Abadilla

After mounting more flights and carrying over one million more passengers last year, Philippine Airlines (PAL) hauled in P129.5 billion revenues, up 13.2% versus the same period in 2016, although the flag carrier lost P4.6 billion due to higher expenses, against its P5.9 billion earnings in the comparative period.

Overall, PAL carried 14.5 million passengers vis-a-vis 13.4 million in 2016 as it introduced new international points and city pairs, starting services  between Clark and Seoul, Cebu and Chengdu, Kalibo and Chengdu, Kalibo and Guangzhou and Cebu and Bangkok as well as daily services to Kuala Lumpur.

On the domestic network, PAL last year launched route sectors originating from Clark Airport in Pampanga, Cebu, and Davao.

PAL netted P109.284 billion in passenger revenues and P8.397 billion in cargo revenues. It has a passenger load factor of 71.39%.

However, the airlines’ consolidated expenses also rose 26.7% to P136.0 billion in 2017  due to flying operations expenses, maintenance, passenger service, aircraft and traffic servicing, as well as reservation and sales.

Flying operations expenses increased by 31.7% to P67.3 billion. Jet fuel costs, which represent the biggest expense of PAL, also rose from P26.1 billion to P37.7 billion in the same period as jet fuel prices increased from an average of US$ 67.57 per barrel in 2016 to US$ 75.59 per barrel in the current year.

Aircraft lease rentals increased to P14.1 billion from P11.6 billion in 2016 as PAL phased in of additional B777 and A321 aircraft. Furthermore, maintenance expenses grew 23.5% to P19.4 billion due to higher aircraft, engine and component repair and maintenance costs resulting from additional aircraft deliveries and increased use of the aircraft.

Passenger service expenses amounted to P12.6, up 22.1%  as passenger traffic grew 8.3% and flights increased by 3.2% . More flights translated to 19 per cent higher aircraft and traffic servicing expenses ,particularly ground handling charges and landing and take-off charges, totaling P15.1 billion.

Reservation and sales went up 18.7% due to higher booking fees incurred as a result of the increase in number of passengers carried.

PAL’s consolidated Total Assets amounted to P180.0 billion, P15.4 billion higher than the preceding year. This was due to the increase in Current Assets by 5.4% and increase in Noncurrent Assets by 10.4%. Its total liabilities increased to P166.0 billion as loans related to aircraft financing went up by P10.5 billion and Notes Payable pertaining to unsecured short term loans from local banks increased by P10.1 billion.

Accounts Payable-mainly of obligations to various suppliers, increased by P2.8 billion, offset by the decrease in Accrued Expenses and Other Current Liabilities as the airline settled P5.1 billion of the disputed Civil Aviation Authority of the Philippines  (CAAP) and Manila International Airport Authority (MIAA) charges. Unearned Transportation Revenue increased by 10.2% as a result of the growth in passenger sales and Noncurrent Liabilities also increased by 4.1%.to P81.8 billion due to loans related to aircraft financing.

In 2017, PAL received the delivery of seven airplanes– five Bombardier Q400 turboprops for inter-island flights and two Boeing 777-300ERs for long-haul routes. Mid-year, the first of eight reconfigured, tri-class Airbus A330s was unveiled, featuring one of the most luxurious cabins in the sky. This A330 first flew to Honolulu, followed by Sydney, Melbourne, Tokyo Haneda and other routes.

From July to November, five dual-class, 86-seater Q400 were delivered. Its first commercial flight was Cebu-Caticlan in August.

Meanwhile, on December 15, a PAL 777 made the first trans-polar flight for a Philippine carrier – a 16.5-hour, non-stop Toronto-Manila flight – preceded by the upgrade of several routes from one-stop to non-stop in 2017: Manila-Doha, Manila-Auckland, Manila-Kuwait and Manila-Jeddah.

PAL’s complete fleet of 10 777s now fly to North America and London.

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