July 24, 2010
Philippine Airlines on Friday reported a comprehensive total losses of $14.3 million for fiscal year that ended in March 2010, data filed with the Securities and Exchange Commission (SEC) showed.
Drastic cost-cutting measures reduced the flag carriers losses by more than 95 percent, a sharp decline from the comprehensive net loss of $297.8 million it recorded last year.
PAL said that it losses was still fueled by weak passenger demand particularly on its international operations as a result of the global financial crisis which compelled them to reduce fares to be competitive. The strategy drove revenue down to $1.36 billion from $1.60 billion in 2008.
Meanwhile, its recorded expeses was down mainly because of lower fuel prices, cost cutting strategy and one-time gains recognized during the current period. The airline's total expenses by the end of March 2010 dropped by 28 percent to $1. 35 billion.
Despite worldwide capacity cuts in 2009, there were still significant empty seats prompting them to offer promotional fares just to fill the plane and consequently exerted pressure on its yields.
PAL further said that it was continuing to look for ways to improve its financial positions. It has lined up cost-saving measures and implemented various revenue enhancement programs, such as cash generation strategies and cost control initiatives.
What are the "one-time gains" spoken about? Without these, what would PAL's books have looked like?
ReplyDeleteThey cut losses from $300M to "only" $14.3M. That's still a significant loss.
Now some of their flights are unmanned, forcing their cancellation because of lack of pilots. Pilots are deserting the airline because they don't see a future there.
The books are in disarray, the labor situation is untenable and needs resolution now. Any foreign investor who puts money in at this point will only find himself cleaned out.
Quo vadis, PAL?