PAL trims losses by 6%

MANILA, Philippines - Listed PAL Holdings Inc., the parent firm of national flag carrier Philippine Airlines (PAL), trimmed its losses by six percent on the back of lower operating costs with the entry of diversified conglomerate San Miguel Corp. (SMC).

In its annual report submitted to the Philippine Stock Exchange (PSE), PAL Holdings said it booked a net loss of P4.133 billion for its fiscal year ending Mar. 31, 2013 or P246 million lower than the P4.379 billion net loss registered in its fiscal year ending Mar. 31, 2012.

Since the entry of SMC in April last year, PAL embarked on a major re-fleeting program aimed at acquiring 100 aircraft. Tobacco and liquor magnate Lucio Tan still controls a 51-percent stake in the airline.

The company’s revenues slipped by P30.4 million to P74.022 billion from P74.053 billion as the peso strengthened to P41.6379 per $1 this year from P43.1203 to $1 last year.

Passenger revenues reached P62.2 billion as it flew 7.62 million international and domestic passengers while cargo revenues amounted to P5.35 billion.

Had the exchange rate remained at the 2012 level, passenger revenues would have increased by P1.35 billion while cargo revenues would have gone up by P137.1 million.

“The upward movement in passenger revenues was attributed mainly to the improved yields generated from passenger seat offerings. Cargo revenues, likewise, was better versus the same period the year before as a result of the increase in cargo traffic,” PAL Holdings stated in the annual report.

Other revenues from the lease income recognized from aircraft operating lease arrangements with an entity under common control and ancillary revenues relative to passenger transport services and charters jumped 15.9 percent to P6.468 billion.

In all, the airline booked a comprehensive loss of P496 million due to the effect of foreign exchange translation.

On the other hand, the strong peso helped cut the airline’s expenses by 2.1 percent to P77.76 billion from P79.39 billion.

“This had the effect of reducing flying operations, aircraft and traffic servicing, passenger service and reservation and sales costs offset in part by the increase in maintenance and general and administrative expenses,” PAL Holdings added.