Philippine Airlines reported a substantial loss of $229.7 million for the first nine months of 2013, a crucial time for the country’s newly upgraded aviation industry as it prepares to provide direct flights to the United States.
The country recently regained a Category 1 rating from the US Federal Aviation Authority after it complied with international safety standards.
PAL’s financial health, however, does not seem to match the bright prospect of the local aviation industry, although the airline’s management expressed confidence it will deliver an improved performance in 2014.
For now, the country’s flag carrier shows a balance sheet tainted with a one-off expense of $261 million as it retires 20 aging jets and replaces them with more modern, fuel-efficient planes.
PAL hopes to implement a more efficient fleet planning program from the deployment of its new aircraft, an expanded network and further upgrading of service standards on the ground and in the air.
“The year 2013 was a clean-up year for PAL as we went through the costly, yet necessary, fleet renewal process, but we are on track with our goals and we remain committed to improving your airline’s financial and operational performance,” said PAL president and chief operating officer Ramon Ang.
“With the lifting of the country to Category 1 Status, PAL can now deploy its new planes to the United States and explore vast opportunities, including network expansion and partnership with other airlines, in one of the Philippines’ largest passenger markets,” Ang said
PAL will own one of Asia’s youngest fleet at 3.5 years with the completion of a modernization program that involves, among other things, the replacement of 20 aging aircraft with modern, fuel-efficient planes that are expected to reduce costs due to expected higher productivity gains.
The retirement of PAL’s old fleet is part of a turnaround strategy aimed at transforming the flag carrier into Asia’s airline of choice through fleet modernization, network expansion and service innovation.
With the upgrade, PAL expects to generate substantial annual savings from lower maintenance and fuel costs.
More than 70 years after PAL first took to the sky, the story of PAL continues to evolve under a new management that has a track record for successfully growing businesses in virtually every growth sector of the Philippines.
The country previously held a Category 1 status, but this was downgraded to Category 2 in January 2008. A Category 2 status means the country lacks laws necessary to oversee air carriers in accordance with minimum international standards or that its civil aviation authority is deficient in one or more areas.