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Philippine flag carrier reports 604% jump in income
Publication Date : 20-08-2014
The earnings streak set off by Philippine Airlines president and COO Ramon S. Ang continues as the July net income of the once money-losing flag carrier reached $11 million, bringing net income from January to July 2014 to $18.6 million.
Earnings for the month of July represented a 604-per cent increase over the July 2013 net income of only $1.5 million. Meanwhile, earnings for the January-July 2014 period represented a turnaround from the $55.2-million loss reported in the first seven months of 2013.
A copy of the flag carrier’s unaudited financial statements obtained by the Inquirer showed that the improved performance was due to the increase in passengers ferried during the period, the increase in the airline’s flights and new routes as well as improved efficiencies that resulted in reduced operating costs.
Revenues for the month of July amounted to $195.6 million, up 33 per cent from a year ago, bringing July year-to-date revenues to $1.29 billion.
Fuel and maintenance cost declined 47 per cent of total expenses from the previous years’ 55 per cent.
Analysts had earlier attributed PAL’s positive performance to improvements implemented by Ang in the airline’s management system in a bid to revitalize the underperforming company. These included fleet modernization, matching deployed aircraft with routes’ passenger loads and distance, expanding its flight network, focusing on profitable and promising routes, service innovation and prudent cost management, among others.
These, together with the lifting of the European ban, the Philippines’ upgrade to Category 1 status by the US Federal Aviation Administration and other management initiatives put in place over the last two years are expected to contribute to an improved financial performance for the whole of 2014.
Meanwhile, PAL Holdings Inc.—the publicly listed operator of flag carrier Philippine Airlines—is postponing its annual stockholders’ meeting originally scheduled next month amid a potential shareholder restructuring, a stock exchange filing yesterday showed.
PAL Holdings said the meeting was set for the last day of September but “in light of ongoing discussions between San Miguel Corp. and the Lucio Tan group with respect” to their stakes in Philippine Airlines Inc. and Air Philippines Corp., “both parties have agreed to recommend to postpone the annual stockholders’ meeting” to a later date.
Tan’s group, which holds an indirect 51-per cent stake in PAL Holdings, is seeking to buy back the 49-per cent share of San Miguel to end a two-year partnership.
The buyout was valued at an estimated $1 billion, the Inquirer reported previously.
The buyout comes as PAL has showed improving financial prospects at a time when budget carrier Cebu Pacific Air and regional low-cost carriers continue to pose serious competition.
PAL has 85 planes at the end of June, including six Boeing 777-300ERs and 10 Airbus A340-300s and 18 Airbus A330-300s, mainly for international flights.