PAL reports profitability

But Earnings alarming

August 21, 2010

Plagued by labor disputes, and threats of imminent strike from its flight and ground crews, Philippine Airlines is reporting a $31.6 million profit in the April-June period, down from $35.5 million in the same period last year.

The figure was down by $3.9 million or 11% from the same period last year.

"PAL must swallow bitter pills and handle its labor issues with utmost care to survive amidst the difficult and cut-throat operating environment," an airline statement quoted its president Jaime Bautista as saying.

The carrier said in a disclosure to the Philippine Stock Exchange (PSE) that it posted revenues of $426.7 million for the first quarter of its fiscal year 2010-2011, up by 30% over last year’s $ 327.7 million.

However, expenses surged 37% to $391.6 million. The company reported total expenses of $391.6 million, up by $106.1 million from $ 285.5 million last year.

Jet fuel expense rose by $55 million during the first quarter with fuel prices at an average of $100.47 per barrel from $70.28 per barrel in 2009, which continues to be the airline’s biggest operating expense.

The airline also reported a decrease in other income, by $47.5 million to $15.4 million as compared to $62.9 million registered last year.

"Despite encouraging numbers on account of the peak travel season, PAL is bracing for lower passenger volumes during the airline’s ’lean season’ usually between August to November," said PAL President Jaime J. Bautista.

Despite the current problems the airline is in, PAL remains focused on continuing efforts to generate more revenues particularly on its international network and control costs.