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By Darwin G. Amojelar, Reporter
PROFITS of Philippine Airlines
(PAL) ell sharply in the first quarter of its current fiscal year
owing to high fuel expenses, which rose by half this year.
The Lucio Tan-owned carrier said
in a statement that its operating net income plunged by 78 percent
to $12.4 million in the April to June period compared with the $12.4
million in the same three-month period of its fiscal year 2007.
For its fiscal year ending March,
PAL’s net income dropped 76.56 percent to $30.6 million from
$130.5 million in the same period last year.
The country’s flag carrier
posted a 20-percent increase in first-quarter revenues to $432.4
million. Its revenue passenger kilometers, the industry yardstick
for passenger sales volume, was up by 4.3 percent at 4.73 billion.
From April to June, PAL carried
2.16 million passengers on 14,495 flights, up 11.6 percent and 25.6
percent, respectively, over the same period in 2007. Passenger load
factor hit 80 percent.
Its operating expenses rose by 38
percent to $420 million primarily due to soaring oil prices, which
increased by 70 percent year-on-year. Last year, fuel accounted for
about 35 percent to 40 percent of an airline’s operating cost per
passenger, and was the second-highest expense next to labor.
To recover losses from high fuel
costs, PAL imposed a higher fuel surcharge flying to US or Canada at
$164 from $129 previously. The airline also imposed an additional
surcharge to Australia of $144 from $114; Korea, to $74 from $54;
Guam, to $34 from $19; Singapore, to $49 from $34; Indonesia, to $84
from $74; Vietnam, to $64 from $44; China, to $69 from $58; and Hong
Kong, to $50 from $40.
PAL also raised its fuel
surcharge for its Thailand flights to $99 from $44, and for its
Japan flights to $99 from $69.
For the April to June period, the
carrier recognized a net gain from the fair value changes of its
outstanding derivative positions. It hedges its fuel requirements to
shield it against sudden changes in world prices.
Coupled with the modest operating
income described above, plus other non-operating expenses, the
airline realized a total income of $45.8 million.
“The positive result shows
PAL’s underlying strength and resilience in the face of the
unprecedented escalation of fuel prices in the period under
review,” Jaime Bautista, PAL president said.
PAL Holdings has an 84.7-percent
stake in the flag carrier. It earlier acquired six holding companies
that collectively owned 81.57 percent of PAL. Separately, PAL
Holdings owns 3.1 percent of PAL through a subsidiary, PR Holdings
Inc.
The airline flies to 43
destinations, including 18 domestic and 25 international points. The
airline also serves the US, Japan, Hong Kong, Korea and the Middle
East routes.
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