PAL Recovers, posts P1-B Profit in April and May
SINGAPORE -- Robust sales following an increased appetite for travel allowed Philippine Airlines (PAL) to book a net income of more than one billion pesos (around 18 million USD) in the April-May period, the first two months of its fiscal year, after a net loss of 661 million pesos (10.7 million USD) in the fiscal year ended March, a company official said.
PAL submitted a financial report to the Securities and Exchange Commission showing a net income of almost 600 million pesos in April and an "equally good" performance in May despite a continued increase in jet fuel prices, said the official, a member of the PAL board.
"Operating income is more than one billion pesos in April, which finance people in PAL say is the highest in the company's recent history," said the board member, declining identification.
The airline's load factor increased after it added flight schedules using its fleet of 30 aircraft, the official said. A nine--percent increase in capacity yielded a 15-percent increase in traffic, he added.
PAL hedged half of its fuel requirements before prices of aviation fuel escalated, the official said.
The increased sales in April and May reflected what appeared to be a firm recovery of the global airline industry, according to an official of the International Air Transport Association (IATA), an association of more than 270 airline companies worldwide that is holding its annual general meeting here this Tuesday. PAL is a member of the IATA.
Andrew Drysdale, IATA regional vice president for Asia-Pacific, said airline companies in the Philippines were poised to take advantage of the improving conditions for travel worldwide.
"I think there is strong growth in the Philippines' aviation industry in the first quarter and we hope the trend would be sustained. Significant growth in Asia is expected to come mostly from China and India where there is a huge population," Drysdale said.
PAL, 63 years old, is Asia's oldest airline. It nearly collapsed in 1998 as the 1997-98 Asian crisis struck its major markets in the region.
It shut down operations for two weeks in September 1998, sought government protection from creditor lawsuits, and eventually began a 10-year financial rehabilitation that will end in 2009.
In the fiscal year ended March, PAL said sales slumped in the April-November period because of a pneumonia scare and it suffered a net loss of 1.6 billion pesos.
In December-January, sales picked up and PAL brought the net loss down to 600 million pesos.
Higher operating expenses in February and March due to the escalating price of aviation fuel snagged what would have been a continued recovery in PAL's last two months of operations in the previous fiscal year.
PAL went back in the red during the past fiscal year after posting a net income of 300 million pesos for the period from April 2002 to March 2003.
The price of aviation fuel had almost doubled to 46.03 dollars a barrel in May from 28.24 dollars a year earlier.
The IATA said in April that the world aviation industry finally recovered in the January-March quarter, which it said was a sign that this year would mark the full recovery of air travel since it got hit badly by a series of events starting with the Sept. 11, 2001, terrorist attacks in the United States.
It said passenger and cargo traffic posted double-digit increases in the January-March quarter. With INQ7.net
PAL eyes expansion of NAIA Terminal 2
PHILIPPINE Airlines, sole user of Terminal 2 of the Ninoy Aquino International Airport (NAIA), is considering expanding the terminal in three years to accommodate increasing passenger traffic on its domestic and international routes, an Inquirer source in the airline said Friday.
The expansion could eat up into the Nayong Pilipino [Philippine Village] leisure park beside the airport, the official said.
PAL could shoulder the cost of expanding the terminal, which was built by the government, the official said.
"Whoever needs it should build it," the official said. "PAL needs a bigger terminal. Expansion should happen in the next three years to keep up with the increasing traffic."
The airline plans to resume flights to Europe in the next three years, particularly in such countries as Italy, France, the Netherlands, and the United Kingdom.
The plan is to expand the terminal gradually and do it on a "modular basis," opening one new gate at a time as demand increases, the official said. "We could expand to the Nayong Pilipino area and we could do the expansion gradually. This way, it would also be easier to finance it."
The PAL official could not say how much funding the airline would need for the expansion.
The mothballed Terminal 3 of the NAIA remains embroiled in a legal case between the government and the Philippine-German consortium that built it.
A PAL official said the airline could not have maximum use of Terminal 3 even if it were operational, because it was built on the "wrong side of the airport."
The Supreme Court nullified early this year a 650-million-dollar contract of the PIATCo consortium with the government to build and operate the Terminal 3. PIATCo and its German investor, Fraport AG, have sued the government before an international court. Clarissa S. Batino, with INQ7.net