PAL Holding’s losses hit P1.1B

MANILA, Philippines - Listed PAL Holdings Inc., the parent firm of national flag carrier Philippine Airlines Inc. (PAL), incurred a net loss of P1.08 billion in end-June this year amid lower revenues brought about by the 21-percent drop in passenger traffic.

In its unaudited financial statement submitted to the Philippine Stock Exchange (PSE), PAL Holdings said it recorded a net loss in end-June or a complete reversal of the restated net income of P494.59 million registered in end-June last year.

PAL Holdings, the parent firm of PAL which is jointly owned by taipan Lucio Tan and diversified conglomerate San Miguel Corp. (SMC) – recorded an 11-percent drop in revenues to P18.53 billion in end-June from P20.78 billion in the same period last year.

Passenger revenues declined 13 percent to P15.3 billion in end-June this year from P17.57 billion in end-June last year as a result of the 21.5-percent drop in passenger traffic while cargo revenues also retreated by three percent to P1.32 billion from P1.36 billion.

Expenses of PAL Holdings decreased 3.3 percent to P19.61 billion from P20.29 billion due to lower expenses for flying operations as well as air and traffic servicing

“This was largely on account of lower expenses related to flying operations, aircraft and traffic servicing countered by the increase in maintenance, passenger service, reservation and sales, and financing charges. Reduction in other charges likewise contributed to the decrease in expenses,” PAL Holdings said.

The company’s flying operations expenses dipped 5.9 percent to P11.41 billion from P12.13 billion due to the downward movement in fuel costs offset by higher aircraft lease rentals and depreciation of flight equipment.

The company said fuel costs that remains to be the airline’s biggest operating expense dropped 11.8 percent to P7.77 billion from P8.8 billion due to the decline in the average jet fuel prices per barrel to $126.68 per barrel this year from $ 135.60 per barrel last year.

Lesser flights operated during the quarter also contributed to the downward movement in aircraft and traffic servicing expenses by 6.5 percent to P2.27 billion from P2.43 billion while maintenance expenses grew 14 percent to P2.46 billion from P2.16 billion as a result of more aircraft, engine and component repair costs incurred.

Passenger service expenses likewise rose by 8.2 percent to P1.41 billion from P1.3 billion due to costs incurred relative to cabin crew benefits and higher cost of food served to passengers.

For the quarter ending June 2013, PAL Holdings’ booked a consolidated total comprehensive loss of P499.8 million or 32.9 percent higher than last year’s total comprehensive loss of P376 million.