PAL doubles profit to $34m

PHILIPPINE NEWS SERVICE — Philippine Airlines, owned by taipan Lucio Tan, reported yesterday that its net income doubled to $34.5 million in three months to June, covering the first quarter of its fiscal year 2007, from a restated profit of $17.2 million a year ago.

Company president Jaime Bautista, in a news briefing, said the airline booked a 101 percent growth in net income in the April-to-June period, on the back of a 13 percent growth in revenues and 5 percent increase in passenger volume.

“Overall, the improved performance during the first quarter of current 2007-2008 fiscal year resulted in a significant increase in our bottom line,” PAL said in a report filed with the Securities and Exchange Commission.

Bautista said the airline carried close to 2 million passengers on 5,771 flights to 41 domestic and international destinations in the April-June quarter.

Despite the increased number of flights and seats, passenger load factor rose to 82.18 percent, its highest in over a decade, from 79.32 percent a year earlier.

These brought the airline’s total revenues to $373.4 million in the first quarter, up 13 percent from $331.2 million a year ago. Expenditures also rose 8 percent to $338.9 million, boosted by high jet fuel prices that accounted for about 30 percent of total cost.

Bautista linked the better-than- expected quarterly performance to strong passenger demand during the April-June period, which is considered the peak travel quarter in the highly seasonal air transport business.

He said the second quarter operation, covering the months of July, August and September, could result in a net loss because of lower load factor.

For the whole of fiscal year 2007 ending March 2008, Bautista said PAL may post a net income of at least $30 million and carry a total of 7.5 million passengers, up from 6.9 million a year earlier.

The flag carrier earlier declared a record net income of $140.3 million in its 2006 fiscal year ending March 2007.

“It confirms that we are now restructured to achieve sustained profitability and validates our decision to exit receivership as soon as possible,” Bautista said.

Bautista said the company was securing an approval from the SEC by December to move out of a receivership program in entered in 1998. The SEC approved the rehabilitation plan in 1999.

PAL is currently in discussion with American manufacturer Boeing Co. for six Boeing 777-300 ERs—four on firm order and two on lease, with a price tag of $250 million each.

The airline is also in the midst of acquiring 24 jets under the Airbus 320 family, comprising nine planes on firm orders, two leased A320s, four leased A319s, and five A320 option aircraft.

Bautista said the airline would use the new aircraft to open new flights to East Asia, North America, Europe and New Zealand.