FLAG carrier Philippine Airlines (PAL) posted a net loss of $25.1 million in the first half (H1), reversing from the previous year’s net income of $136.7 million, as higher jet fuel expenses amid the continued war in the Middle East pressured earnings.
In a disclosure, parent company PAL Holdings Inc. said fuel costs increased by 48.2 percent to $674.5 million and accounted for 39.2 percent of the airline’s operating expenses, up from 30.3 percent a year earlier.For the second quarter alone, PAL incurred a net loss of $103.6 million against a net income of $60.2 million a year earlier, with fuel costs rising 88.2 percent year on year to $422.9 million.Earnings before interest, taxes, depreciation and amortization (Ebitda) dropped 28.5 percent to $271.0 million, with Ebitda margin falling to 5.5 percent from 23.0 percent previously.Despite the jet fuel cost factor, the airline reported higher first-half revenues, which grew 5.9 percent to $1.746 billion from $1.648 billion, driven by higher passenger yields, strong cargo revenue and growth in ancillary revenues.Passenger and cargo revenues increased by 4.5 percent and 30 percent, respectively, to $1.47 billion (passenger revenue) and to $98.2 million (cargo revenue), supported by fare and freight rate adjustments. Ancillary revenues also rose on increased sales of travel-related products and services.However, total passengers carried by PAL in the first half declined by 3.1 percent to 8.2 million, while load factor eased to 78.9 percent from 81.6 percent a year earlier.PAL said it moved quickly to mitigate the impact of higher fuel prices through targeted fare and capacity adjustments across its network.“The Middle East conflict has created significant near-term pressure on our fuel costs, and our second-quarter results reflect that impact. At the same time, our first-half performance demonstrates PAL’s underlying resilience,” PAL President Richard Nuttall said.PAL said international demand continued to be robust, while domestic demand was more affected by higher fares, although domestic operations remain profitable.“International demand remains strong, our cost discipline is holding, and we enter the second half with the flexibility to manage through this disruption while staying focused on our strategic plan,” Nuttall added.PAL Holdings shares shed a centavo, or 0.47 percent, to P2.12 apiece on Thursday.
