PHILIPPINE Airlines (PAL) reported a net income of $140.3 million for its financial year ending March 31, 2007, the largest profit in its 66-year history and an affirmation of the flag carrier’s robust financial health eight years into its restructuring program.
In a filing with the Securities and Exchange Commission (SEC), PAL said the surplus was a “significant improvement” over the preceding fiscal year’s profit of $22.8 million — a more-than-six-fold jump.
It was also PAL’s third straight annual profit, a modest streak achieved in spite of adverse operating conditions, including skyrocketing fuel prices, the liberalization of the aviation industry, continuing global terrorist threats and other issues affecting travel, as well as the airline’s cost base.
Full recovery
“These solid results, not just from last fiscal year but over the past eight years under restructuring, confirm that PAL is fully recovered and is now firmly on track towards long-term profitability,” said PAL president Jaime J. Bautista.
“We are consolidating these gains by reinvesting them in the business to further improve our products and services, which is critical in shoring up our competitive position in the liberalized aviation milieu.”
Last year’s record profit came on the back of a $158.4 million or 12.8 percent upsurge in revenues, which also reached a new high of $1.39 billion.
Strong performances by the passenger and cargo businesses, coupled with some non-recurring items, contributed to the expansion.
Passenger carriage led the way, with PAL ferrying a total of 6.9 million passengers on 21,252 flights during the year, attaining a load factor of 76.8 percent — its highest in 15 years.
Fuel prices
On the other hand, expenses increased by 6.4 percent to $1.3 billion, principally due to the continued rise in jet fuel prices from an average of $71.79 per barrel in 2006 to $79.81 per barrel in 2007. This added $35.7 million to PAL’s fuel bill, which ballooned to $401.9 million last fiscal year.
PAL managed to keep other expenses in check by relentlessly controlling costs, and improving systems and productivity. For instance, the airline recently completed the implementation of electronic ticketing throughout its network, becoming the first Philippine carrier to fully adopt the customer-friendly technology. (PR)
