PAL Holdings books P3.6-billion profit in 2016

PAL HOLDINGS, Inc., the listed operator of Philippine Airlines, saw its profit drop last year, dragged by an 8% increase in expenses.

In its annual report submitted to the Philippine Stock Exchange, the Lucio C. Tan-led carrier said its net income fell 39% to P3.59 billion in 2016, from 2015’s P3.59 billion which was boosted then by a one-time gain on the sale of an investment and strong growth in passenger volume.

PAL’s total revenues improved by 7% year on year to P116.63 billion in 2016, propelled mainly by a 7% increase in passenger revenues to P96.29 billion. The flag carrier saw a 12% increase in number of passengers carried to 13.35 million, as it added more flights in 2016.

“During the year, PAL introduced new destinations namely Kuwait, Jeddah, Doha and Saipan and new services between Cebu and Los Angeles, Cebu and Singapore, Osaka via Taipei, Cebu and Caticlan, and Clark and Caticlan,” the listed company said.

Cargo revenues slipped 4% to P6.93 billion in 2016, from P7.19 billion a year ago, while those from its ancillary business — including other products and services — was also up 24% to P9.76 billion from P7.87 billion previously.

On average, the group carried 36,482 passengers and 511 tons of cargo daily. Broken down, 19,220 were domestic passengers including codeshares with PAL Express, and 17,262 are international. For cargo, local operations accounted for 320 tons, while international accounted for 191 tons. PAL’s flights were 69.16% full on the average last year.

Meanwhile, total operating expenses inched up by 8% to P110.87 billion from P102.88 billion seen the previous year.

“This was primarily due to higher expenses for maintenance, general and administrative expenses, passenger service, aircraft and traffic servicing expenses, offset in part by the decrease in flying operations expenses,” PAL said.

Broken down, bulk of the airline’s expenses or P59.24 billion was for flying operations, 2.6% lower than the P60.87 billion in 2015. Maintenance expense, one of PAL’s biggest costs, jumped 36% to P15.04 billion from P10.99 billion due to the delivery of additional aircrafts in 2016.

As end December, PAL’s international route network covered 42 points, while its domestic network covered 32 cities and towns in the Philippines ( under codeshare and mostly operated by partner PAL Express).

This year, the flag carrier looks to ferry 15 million passengers 2017 with new routes and increased flight frequencies, PAL President and Chief Operating Officer Jaime J. Bautista earlier said.

Shares in the company closed at P5.34 each, up from its previous finish of P5.30 apiece.