• Top Philippine carriers suffer profit setbacks

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    The parent firm of Philippine Airlines said Thursday it plunged deeper in the red in the previous quarter, while Cebu Pacific’s profits dropped amid an expansion push by the country’s two top carriers.

    Listed PAL Holdings said falling passenger traffic in the three months to June led to net losses surging by 32.9 percent from a year earlier to P499.8 million ($11.4 million).

    Passenger numbers dropped 21.5 percent in the quarter, it told the Philippine Stock Exchange. Revenue for the period fell 10.8 percent to P18.5 billion.

    A spokeswoman for the airline, which is undertaking a major expansion program, declined to comment on the results.

    PAL ordered 54 Airbus aircraft in a $7 billion refleeting program last year, and has been rolling out 12 new destinations in Australia, China, Malaysia and the Middle East this year.

    It is also planning direct flights to Paris, London, Rome and Amsterdam later this year after the European Union removed the carrier last month from an aviation safety blacklist.

    Cebu Air, operator of the country’s top budget carrier Cebu Pacific, saw its net profit dive 66.7 percent from a year earlier to P257.3 million in the three months to June.

    As the peso fell it had to find more money to repay US dollar debt that had financed aircraft purchases.

    “The company’s major exposure to foreign exchange rate fluctuations is in respect to US-dollar-denominated long-term debt incurred in connection with aircraft acquisitions,” Cebu Air told the stock exchange.

    It said the falling peso caused it to suffer a P1.3-billion foreign exchange loss for the six months to June.

    Cebu Air ordered 37 Airbus aircraft in 2011 as part of a 10-year, $3.8 billion refleeting program.

    It said its net profit for the first six months of 2013 dropped 18.5 percent to P1.4 billion.

    In the same period revenues improved 10.1 percent to P21.7 billion. Passenger volume rose 7.9 percent to 7.5 million people as the airline put on more flights.

    Cebu Air said it now operates 44 aircraft, up by six from a year earlier.

    AFP

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