PAL Reports $301 Million loss for 2008

Blames fortune on costlier jet fuel

By Darwin G Amojelar
July 21, 2009

PHILIPPINE Airlines (PAL) said it posted a net loss in the fiscal year ending March this year due to higher fuel expenses.

The Lucio Tan-owned airline company said net loss amounted to $301 million in the fiscal year ending March from a net profit of $30.6 million in the same period last year.

The country’s flag carrier said revenues rose by almost 10 percent to $1.6 billion during the period.

The airline carried close to nine million passengers during the year, which was nearly 20-percent higher than the previous year. It had a load factor of 76 percent.

PAL’s total expenses at end-March this year were higher by 20 percent compared with the previous year as a result of high fuel cost.

In the third quarter ending December, PAL reported a net loss of $219.86 million due to mark-to-market losses from its fuel hedging contracts.

The International Air Transport Association (IATA) said Asian carriers, which included PAL, would register a total estimated industry loss of $10 billion for 2008.

By end 2009, PAL is expecting the arrival of its two, brand new and fuel-efficient B777-300ER aircraft from Boeing Co., Seattle , USA .

Earlier, PAL Holdings Inc. said Trustmark—the majority shareholder of the company—will repurchase up to $143 million zero-coupon notes and bilateral loans due in 2011.

Trustmark owns 84 percent of PAL Holdings.

PAL Holdings’ notes due in 2011 amounted to $160 million while loans outstanding reached $60 million.

The company’s debts will be repurchased between $50 and $58 million, including an early tender premium of $3 million from the price of $47 million to $50 million.