PAL reports banner year with P6.3-B profit

As a fitting prelude to the flag carrier’s 75th year, Philippine Airlines Inc. (PAL) achieved its most impressive financial performance yet with a P6.3-billion profit for last year or a six-fold increase over the previous year.

PAL attributed its banner year to cautious fine-tuning of strategic plans, prudent resource management and a fortuitous industry climate.

The 2015 income was a 560-percent jump from 2014’s P958-million comprehensive income and represented PAL’s second profitable year after recovering from a P10.8-billion loss in 2013.

It also marks the airline’s third dramatic turnaround in the last two decades – in fiscal years 2009-2010-2011 (P14-billion loss reduced to P672-million loss, then to a $3.4-billion net income) and in 2002-2003 (P1-billion loss to P372-million profit) that PAL said was clear proof of the airline’s resilience or capability to rebound from every major slump.

“Carefully calibrated route and fleet expansion programs were augmented by low fuel prices that enabled us to tap the industry’s growth momentum,” PAL President and COO Jaime J. Bautista said after the airline’s annual stockholders meeting at the Century Park Hotel last June 30.

To boost its financial condition and further enhance its operations, the flag carrier implemented innovative revenue-enhancement programs, cash-generation strategies and cost-control initiatives.

Five new Airbus A321s joined the fleet and five new international destinations (New York, Jinjiang, Cairns, Auckland, Port Moresby) were added to the PAL network. The addition of five new aircraft led to an increase in available seat kilometers to 41.44 billion (versus 34.78 billion in 2014), as well as in available ton kilometers to 5.80 billion (versus 4.90 billion).

The airline was able to expand its international network by entering into code-share agreements with WestJet, Turkish Airlines and China Airlines, thus stretching PAL’s reach within Canada, Europe and China.

PAL has eight other code-share partners. The domestic network also expanded with the revival of the Cebu hub, paving the way for more inter-island routes within Visayas and Mindanao, while a new destination was opened – Tablas.

Despite an overcapacity and decline in the global cargo business, PAL maintained its local market leadership in terms of international cargo carriage. PAL carried more than 177,000 tons of freight in 2015.

Cargo contributed 6.7 percent of total revenues earned. Operating expenses remained almost at previous levels at P104 billion to P105 billion. Despite an increase in the number of flights, PAL’s fuel bill fell, from P41 billion to P31 billion, due to declining fuel prices. PAL jets consumed 7.8 million barrels of jet fuel in 2015.

Fuel made up 29.2 percent of operating expenses, down from 39.4 percent in 2014. PAL flew 11.93 million passengers (vs 9.64 million in 2014) while revenue passenger kilometers (RPKs) rose to 28.30 billion (vs 24.82 billion). By yearend, PAL had 76 aircraft, which flew 46,153 round-trips.

Also in 2015, PAL successfully passed its sixth International Air Transport Association Operational Safety Audit (IOSA) – affirming PAL’s strict adherence to international safety standards.

Last year was PAL’s first full year of operations since the Lucio Tan Group reassumed management control of the airline in the fourth quarter of 2014. Also recently, PAL and Hawaiian Airlines (HA) forged a code-share partnership that will provide passengers convenient connections between the Philippines and the Hawaiian islands.

“Philippine Airlines is proud to forge a codeshare partnership with Hawaiian Airlines from Honolulu in O‘ahu to the inter-island points of Līhu‘e, Hilo, Kona, and Maui. From these points, passengers can visit other neighboring island destinations including Kaua‘i and Hawai‘i Island,” Bautista said.

Passengers on PAL’s five times weekly Honolulu flights will have a seamless transfer to Hawaiian Airlines.

PR passengers will be checked-in all the way to their final destination. “As we widen our route network, we aim not only to provide point-to-point travel, but to create passenger traffic beyond the main gateways.

All these are geared toward providing passenger convenience and satisfaction,” Bautista added.

The code share flights will be made available in conjunction with the flag carrier’s weekly service to Honolulu.

Passengers on the HA/PR code-share flights between the inter-island points and Honolulu now have the chance to seamlessly connect to PAL’s regular flights between Honolulu and Manila and journey onto any of the flag carrier’s 30 domestic destinations. Hawaiian Airlines (HA) is the first US carrier codeshare partner of PAL. RIZA LOZADA