PHILIPPINE NEWS SERVICE — Flag carrier Philippine Airlines, owned by taipan Lucio Tan, yesterday declared a record net income of $140.3 million from revenues of $1.39 billion over a 12-month period ending March 31 this year.
The carrier said in a filing with the Securities and Exchange Commission that the figure was the largest profit recorded in its 66-year history and an affirmation of the flag carrier’s robust financial health eight years into its restructuring program.
Since entering an SEC-supervised rehabilitation framework in June 1999, PAL has posted an operating income for eight consecutive years and a net income in six of those eight years.
The $140.3-million net income in the fiscal year to March 2007 was over six times the net profit of $22.8 million recorded in the previous fiscal year ending March 2006.
“It was also PAL’s third straight annual profit, a modest streak achieved in spite of adverse operating conditions, including skyrocketing fuel prices, the liberalization of the aviation industry, continuing global terrorist threats and other issues affecting travel, as well as the airline’s cost base,” it said.
Company president Jaime Bautista said the solid financial results, over the past eight years under restructuring, confirmed that PAL had fully recovered and was now firmly on track towards long-term profitability.
The airline’s total revenues rose $158.4 million or 12.8 percent to a record high of $1.39 billion as of March 2007. Strong performances by the passenger and cargo businesses, coupled with some non-recurring items, contributed to the expansion, the company said.
The airline ferried a 6.9 million passengers on 21,252 flights during the fiscal year, attaining a load factor of 76.8 percent—its highest in 15 years.
Expenses increased by 6.4 percent to $1.3 billion, principally due to the continued rise in jet fuel prices from an average of $71.79 per barrel in 2006 to $79.81 per barrel in 2007. This added $35.7 million to PAL’s fuel bill, which ballooned to $401.9 million last fiscal year.
The airline has recently completed the implementation of electronic ticketing throughout its network, becoming the first Philippine carrier to fully adopt the customer-friendly technology.
The company is in the midst of acquiring up to 20 Airbus A320-family jets, with six units already delivered, four due later this year and five more in 2008, in addition to five option aircraft.
PAL has also signed for the acquisition of six Boeing 777-300ER aircraft, comprising four firm orders and two leased units, to boost its long-haul operations to North America and other destinations.
Bautista said PAL would invest from $50 to $100 million to reconfigure and refurbish cabin interiors on its existing wide-body fleet.
PAL was also investing to continuously upgrading the airline’s safety and security standards—already among the industry’s most stringent—as well as its technology, infrastructure and human resource assets, Bautista added.
Early this week, the company disclosed planned investments of up to $50 million in the development of an aviation hub in Clark Field, Pampanga. This will entail the lease of 30 to 50 hectares of property over a period of 25 years, in which PAL will construct its catering, ground handling and aircraft maintenance facilities, Bautista said.