PAL swings to net loss in 9 months

MANILA, Philippines — Philippine Airlines (PAL) swung to a net loss in the first nine months as the flag carrier recorded a $339.4-million increase in fuel expense as a result of the conflict in the Middle East.

PAL incurred a net loss of $159 million during the period, a reversal of the $158.7 million net income it posted a year earlier.

The airline, however, grew its revenue by four percent year-on-year to $2.5 billion.

“Our nine-month results demonstrate the underlying resilience of Philippine Airlines in an operating environment marked by exceptionally high fuel costs and continuing geopolitical uncertainty,” PAL president Richard Nuttall said.

“We have responded with disciplined capacity deployment, stronger revenue management, targeted commercial initiatives and tight control of controllable costs,” he said.

PAL said fuel remains its biggest expense,  accounting for nearly 40 percent of the airline’s operating costs, up from about 31 percent a year ago.

To manage the impact, PAL adjusted fares and fuel surcharges and reduced flights on some routes, while keeping  other costs in check.

The airline expects fuel prices to remain the main factor affecting its financial performance for the rest of the year.

However, Nuttall said while the sharp increase in fuel prices weighed significantly on profitability, demand for travel remains healthy and the company’s revenue performance shows that its commercial strategy is gaining traction.