MANILA, Philippines — Flag carrier Philippine Airlines (PAL) is cruising on its way to another year of profitability, as it prepares its war chest cost spikes resulting from geopolitical tensions.
PAL’s parent PAL Holdings Inc. doubled its net income to P15.16 billion between January and September, from P6.76 billion a year ago, supported by the recovery in overseas and domestic air travel.
During the period, PAL’s revenues soared by 38 percent to P134.58 billion, outpacing the 28 percent surge in its expenses to P109.7 billion.
PAL president and chief operating officer Stanley Ng said the airline is ready to face the emerging uncertainties clouding the world economy.
The national flag carrier projects fuel prices to balloon as a consequence of geopolitical conflicts.
Right now, the Middle East – home to the largest oil producers – is experiencing a humanitarian crisis, with tens of thousands of people killed in the war between Hamas and Israel. It remains to be seen when the conflict will end, as Israel rejects calls for a ceasefire in the region.
“At the same time, we have to be ready to face potential major challenges in the coming months, as geopolitical upheavals drive up fuel prices and threaten economic disruptions,” Ng said.
PAL Holdings president and chief operating officer Lucio Tan III said investments would help shield the airline from the potential impact of external developments.
“We will continue to fortify the Philippine Airlines Group against external headwinds such as the volatile fuel prices and impact of world events, while building up PAL as a resilient and dynamic competitor,” Tan said.
During the nine-month period, PAL grew its passenger revenues by more than half to P120.08 billion from P79.52 billion as it flew 11 million passengers due to the resurgent demand for air travel.
However, PAL’s cargo revenues dropped by 47 percent to P10.74 billion, a development that the carrier attributed to a softening in the market.
Likewise, airlines around the globe are starting to revert their aircraft for commercial purposes after retrofitting them for cargo flights in the heat of the pandemic.
PAL recently placed a P177 billion order for nine Airbus A350-1000, wide-body jets that it intends to deploy for its return to European soil.
The airline operates the largest network of international flights among Philippine operators with its capacity to reach cities in Asia, Australia, the Middle East and North America.