Flag carrier Philippine Airlines (PAL) posted a whopping 946% increase in net income in the first half of 2015 owing to higher revenue generated by its businesses.
PAL Holdings, Inc., in a disclosure to the Philippine Stock Exchange, reported a net income of P5.86 billion, a significant improvement from the same period last year’s income of P560.25 million.
Revenue in the first six months of 2015 reached P55.945 billion, 14.3% higher than P48.952 billion posted year-on-year. In the second quarter alone, revenue rose 2.9% to P28.09 billion from P27.3 billion from the same quarter last year.
Contributing to the favorable revenue performance was the 37% increase in passenger volume mainly for its Americas, Australia, Japan, and Middle East routes, coupled by the effect of its interlining arrangement with PAL Express in the domestic sectors, the airline said.
PAL also introduced new routes such as New York via Vancouver, Dubai, Jinjiang, and Osaka and Nagoya originating from Cebu, as well as increased flight frequencies to Honolulu, Haneda in Japan, and Dammam and Abu Dhabi in Middle East.
Revenue from its passage service grew 15.02% to P47.170 billion from P41.011 billion in the first half of last year.
Revenue from cargo likewise improved 8.6% to P3.779 billion from P3.479 billion last year.
Other revenues include lease income arising from aircraft operating lease arrangements with an entity under common control, excess baggage revenues, and ancillary revenues generated mainly from other passenger transport services, PAL said.
Total operating expenses climbed 5.5% to P50.600 billion from P47.974 billion last year, primarily on higher expenses for maintenance, passenger service, reservation and sales, and general and administrative functions, offset by the reduction in flying operations.
However, PAL said fuel cost, the reason for the reduced expenses in flying operations, decreased 21.3% from last year, brought about by the decline in average jet fuel price per barrel from US$129.71 in 2014 to $88.37 in 2015. But this was offset by the increase in aircraft lease charges and transportation expense with the addition of nine A321s and seven A330 HGWs to PAL’s fleet.
For the full-year 2014, PAL turned in a profit of P786.8 million after being in the red for three years.
As of June, PAL has a fleet of 77 aircraft, with 35 planes on order.
Direct Cebu-Los Angeles route
Meanwhile, Visayas and Mindanao will soon be directly connected to the United States as PAL will start nonstop flights between Cebu and Los Angeles by the first quarter of 2016.
The thrice-weekly service is scheduled to start on March 15, 2016 as part of the flag carrier’s expansion in the U.S. and to mark its 75th founding anniversary.
“Our customers in the Visayas and Mindanao have long clamored for direct flights between Cebu and the U.S. due to the travel convenience this will bring,” PAL president and chief operating officer Jaime Bautista said.
“One can simply take a short hop to Cebu from any point in the Visayas and Mindanao and connect to Los Angeles, instead of flying all the way to Manila,” Bautista noted.
He added that “foreign tourists and our kababayans in the United States will benefit from the flexibility of choice in terms of flights to and from the Philippines.”
PAL will utilize its 254-seater bi-class Airbus A340, with 36 lie-flat seats in business class and 218 seats in regular economy, for the service.
The flag carrier operates 35 weekly flights to the U.S. Eleven are weekly flights from Manila to Los Angeles, 10 are weekly Manila-San Francisco flights, four are weekly Manila-New York flights, and five are weekly flights each to Guam and Honolulu. The new Cebu-Los Angeles service will bring PAL’s U.S. flights to 38 frequencies per week.
The new service will also raise PAL’s total number of international flights operating out of Mactan-Cebu International Airport (MCIA) to 34 weekly, and will add to the existing weekly international flights to Nagoya, Narita, Osaka, and Seoul.
For domestic operations from MCIA, PAL currently has operations to Bacolod, Butuan, Cagayan de Oro, Davao, Iloilo, Tacloban, and Manila.
