August 11, 2024 | 12:00am
MANILA, Philippines — National carrier Philippine Airlines (PAL) may be descending profit-wise as the air travel market normalizes, but the operator is confident that its flight path leads to long-term growth.
PAL’s parent PAL Holdings Inc. reported that its net income dropped by 45 percent to P5.97 billion in the first half from a year-ago level of P10.89 billion.
It reported a four-percent increase in revenues to P90.92 billion, but expenses ballooned faster at 15 percent to P80.3 billion, causing the shrink in earnings.
PAL president and chief operating officer Stanley Ng said the airline is en route to long-term growth even as the air travel market is normalizing from revenge spending in 2023.
Ng also believes PAL has made the right call to buy new aircraft to prepare it for future demand.
PAL is waiting for the delivery of aircraft made by Airbus: nine A350-1000s for long haul and 13 A321neos for regional flights.
So far, PAL has deposited P12.04 billion for pre-delivery payments for the jet orders.
The A350s are scheduled for delivery between 2025 and 2027, while the A321neos are expected to come in from 2026 to 2029.
This year alone, PAL is spending $450 million in capital expenditures, the bulk of which will go to the refurbishment of old aircraft for customer convenience.
“As the industry adjusts to rebalancing between demand and capacity and continues to face cost challenges, we are implementing a disciplined investment plan to upgrade our fleet and continue our digital transformation so that we can serve our passengers better,” Ng said.
PAL has ferried nearly eight million passengers to date, up by 12 percent from just seven million a year ago. The airline supported this passenger increase by raising flight volume by 11 percent, made possible by its fleet of 78 aircraft.
Internally, PAL also gained more members in its frequent flyer miles program. Ng said Mabuhay Miles has breached the six million level as of June.
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