PAL posts lower first quarter income, sees 'dark clouds' ahead

MANILA, Philippines - Philippine Airlines (PAL), reported yesterday a total comprehensive income of $35.5 million for its first quarter ended June 2009, down by $9.6 million over the same period last year.

In a filing with the Securities and Exchange Commission (SEC), PAL said total revenues dropped by 12 percent to $394 million compared with $446.9 million for the same period in 2008. This was due mainly to the 25 percent decrease in passenger revenues of $95 million, as passenger traffic and yields continue to decline.

Other international carriers are also reporting weakening demand, with no sign of an immediate economic recovery. Fears over the spread of Influenza A (H1N1) are also contributing to the falling load factors of PAL as well as other global airlines. 

Total expenses for the first quarter amounted to $358.5 million, 11 percent better than the previous year’s figure of $401.8 million. Lower fuel prices contributed significantly in reducing the company’s expenses.

Moving on to the second quarter, PAL, like all the other global airlines, is facing the specter of extremely weak passenger traffic and cargo demand amidst the protracted world economic meltdown. The International Air Transport Association (IATA) recently revised its projections for fiscal year 2009-2010 to a combined loss of $9 billion for all member airlines. PAL said it is currently implementing certain initiatives aimed at meeting its revenue targets as well as further reducing costs.

In July, PAL took delivery of its third reconfigured B747-400 aircraft equipped with enhanced cabin amenities, including lie-flat Business Class seats and state-of-the art inflight entertainment system. PAL also upgraded its website which now enables customers to book and buy tickets using not just credit cards but also BancNet ATM cards.

The recent series of fare promos (Real Deal, Way to Go, U Go to MNL) were also accessible through the website, whose main features may also be accessed through WAP-enabled cellphones (PAL Mobile).