PAL losses widen as expenses soar
Richmond Mercurio (The Philippine Star) - August 14, 2019 - 12:00am

MANILA, Philippines — Flag carrier Philippine Airlines (PAL) widened its losses in the first half as expenses shoot up.

Parent firm PAL Holdings Inc. in a filing to the Philippine Stock Exchange yesterday reported a total comprehensive loss of P3.01 billion in the first semester, a sharp 355-percent increase from last year’s total comprehensive loss of P661.56 million.

Consolidated revenues during the period, however, grew by 8.6 percent to P81.25 billion from last year’s P74.85 billion.

“The increase was attributable to the growth in passenger and ancillary revenues, resulting from additional flight frequencies and introduction of new routes. This was offset in part by the reduction in cargo revenues by 6.1 percent,” PAL said.

PAL reported consolidated expenses amounting to P77.75 billion in the six-month period, 3.3 percent higher than the previous year’s total of P75.27 billion.

PAL said the higher expenses was a result of the increase in depreciation due to the impact of PFRS 16.

“Likewise, maintenance costs increased by 7.8 percent due to the additional aircraft deliveries and reservation and sales increased by 14.1 percent due to the growth in passengers,” it said.

PAL is expecting three additional aircraft scheduled for delivery before the year ends.

PAL vice chairman Lucio “Bong” Tan Jr. earlier said the airline expects its return to profitability happening next year instead of this year, but hopes to see losses trimmed further by yearend.

“Every rehabilitation gets ugly first before it gets better,” he said.

The last time PAL finished a year profitable was in 2016, despite net earnings falling 39 percent year-on-year then.

By 2017, PAL incurred a net loss of P7.3 billion from a P4.13 billion profit the previous year on higher expenses.

PAL’s net loss was reduced to P4.33 billion in 2018.

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