PAL Holdings profit slips in Q1 as costs rise

PAL HOLDINGS, Inc., operator of Philippine Airlines (PAL), reported a slight decline in attributable net income to P4.28 billion for the first quarter (Q1) as higher fuel and operating costs weighed on earnings.

For the three months ended March, the flag carrier posted P4.28 billion in net income attributable to the parent, down 1.15% from P4.33 billion in the same period a year earlier.

Gross revenues rose 11.67% to P52.43 billion from P46.95 billion a year earlier, while gross expenses increased 8.94% to P46.07 billion from P42.29 billion.

“Our first quarter results reflect both the strength of demand for Philippine travel and the disciplined execution of our team,” PAL President Richard Nuttall said in a media release on Tuesday.

Passenger revenues reached P44.85 billion, up 10.66% from P40.53 billion, accounting for the bulk of total revenues for the period. Cargo revenues totaled P2.55 billion, while ancillary revenues amounted to P4.93 billion.

For the first quarter, the airline carried 4.30 million passengers, up 6.1% from a year earlier. The company attributed the increase to post-holiday demand, network resilience, and capacity expansion, with available seat kilometers rising 7.2%.

The company said growth in its cargo business reflected improved yields amid tight airfreight capacity due to the Middle East war.

“However, these results only partially reflect the impact of the escalation in the Middle East late in the quarter, which has introduced volatility in fuel prices and disrupted parts of the global aviation network,” he said.

Expenses for the period rose, led by flying operations, which increased 10.75% to P24.21 billion. Fuel and oil costs, a major component of flying operations, climbed 11.31% to P14.86 billion from P13.35 billion a year earlier.

Maintenance expenses increased 19.07% to P7.18 billion. Aircraft and traffic servicing costs reached P5.85 billion, passenger service costs P3.73 billion, reservation and sales expenses P3.64 billion, and general administrative costs P1.46 billion.

“We are actively managing our network and costs to protect margins and liquidity. While near-term headwinds remain, we are confident in the strength of our fundamentals and are taking prudent steps to sustain our momentum,” Mr. Nuttall said.

The company said it will continue to focus on financial discipline and strengthening operations as economic volatility affects the global aviation sector.

At the local bourse on Tuesday, shares in PAL Holdings closed unchanged at P3.27 apiece. — Ashley Erika O. Jose