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PhilippineAirlines: PAL Q1 Income up on strong summer traffic

Due to the usual strong demand during summer vacation, Philippine Airlines (PAL) reported total comprehensive income of USD 31.6 million for its peak months April to June 2010. The figure is lower by USD 3.9 million or 11% compared to the same period last year.
Despite encouraging numbers on account of the peak travel season, PAL president and COO Jaime J. Bautista said PAL is bracing for lower passenger volumes during the airline’s ‘lean season’ usually between August to November.

In a filing with the Securities and Exchange Commission, PAL reported revenues of USD 426.7 million for the first quarter of its fiscal year 2010-11, an improvement of USD 99.0 million or 30% over the same period total of USD 327.7 million in 2009.

During the first three months of its current fiscal year, the airline benefited from improvements in passenger traffic as well as cargo, reflecting signs of economic recovery worldwide. Higher yields generated per seat offering also complemented growth in passenger demand.

Total expenses amounted to USD 391.6 million, up by USD 106.1 million or 37% from the same quarter total of USD 285.5 million the previous year. Jet fuel, which continues to be the airline’s biggest operating expense, rose by USD 55 million during the first quarter with fuel prices at an average of USD 100.47 per barrel from USD 70.28 per barrel in 2009. The airline also reported a reduction in “Other Income” by USD 47.5 million to USD 15.4 million for the first three months this year compared with USD 62.9 million for the same period the year before.

Bautista said that while the aviation industry is showing signs of slow recovery, PAL remains focused on continuing efforts to generate more revenues and control costs. Moving forward, he said PAL must “swallow bitter pills” and handle its labor issues with “utmost care” to survive amidst the difficult and cut-throat operating environment.

During its last fiscal year ending March 2010, PAL reported a net comprehensive loss of USD 14.4 million in spite of a USD 35.5 million profit during the first quarter.

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