Flag carrier Philippine Airlines said losses widened 8.3% to P1.084 billion in the first quarter of 2014 from P1.001 billion a year ago as operating expenses grew, offsetting higher revenues.
Revenue rose 18.3% to P21.655 billion from P18.310 billion in the same period last year. The carrier attributed the revenue hike to a 40.1% increase in passenger traffic mainly on international routes, PAL Holdings, Inc. disclosed to the Philippine Stock Exchange last week.
Total operating expenses rose 16.6% to P22.457 billion from P19.253 billion.
PAL saw its expenses on flying operations surge 26.4%, mainly as a result of increases in aircraft lease charges, jet fuel and cockpit crew cost offset by depreciation-flight equipment.
Acquisition of aircraft, including six Airbus 321s, eight Airbus 330s and one Boeing 777, as well as two A330 and one A321 engines on operating leases starting August 2013, jacked up lease charges by P1.23 billion.
Expenses in aircraft and traffic servicing, passenger service and reservation and sales, which rose 25.5%, 36.7% and 14.3%, respectively, as well as a whopping 246.3% jump in other costs inflated the expenses.
These were offset slightly by a 34.8% drop in maintenance costs and a 3.2% decline in general and administrative expenses.
Fuel cost, which remains PAL’s biggest operating expense, increased by P1.866 billion.
Revenue from its passenger operations in the first three months reached P17.89 billion, 19.16% higher than the P15.013 billion in the same period last year.
PAL’s cargo business shared the growth with P1.608 billion or 28.54% up from the P1.251 billion reported a year ago.
Revenue from other businesses improved 5.46% to P2.158 billion from P2.046 billion.
PAL deployed its Boeing 777-300ER aircraft on its non-stop flights to the US mainland, first to Los Angeles on May 3 and the second to San Francisco on May 9. These flights followed the recent upgrading of the Philippines to Category 1 by the US Federal Aviation Administration.
The deployment of the fuel-efficient, twin-engine B777-300ER jets is part of PAL’s strategy to gradually phase in the newly acquired planes and replace the B747-400s on the 18 weekly flights across the Pacific.
PAL expects to save as much as $120 million annually in fuel and maintenance costs using the B777 on the US routes.
Photo from PAL Facebook page
