Strong cargo revenues power PAL 2021 income to P56.5B

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  • Philippine Airlines’ total comprehensive income of P56.49 billion in 2021 reverses the P73-billion loss it suffered in 2020
  • The airline reported a 6.2% revenue growth in 2021 mainly spurred by a 60% year-on-year increase in cargo revenue
  • Operating expenses shrank 23.3% year-on-year due to lower costs related to grounding of aircraft

Philippine Airlines reported a total comprehensive income of P56.49 billion in 2021, a turnaround from the P73 billion loss in 2020.

Revenue reached P58.70 billion, 6.2% higher than the P55.26 billion posted in 2020.

The growth in revenue came mainly from a significant increase in cargo revenue “as air cargo has been a vital partner in delivering essential goods since the COVID-19 pandemic”, parent firm PAL Holdings Inc. said in an April 5 disclosure to the Philippine Stock Exchange.

Cargo revenue jumped 60% to P15.021 billion from P9.413 billion in 2020.

PAL director Lucio Tan III had earlier said the flag carrier pivoted to become a cargo-driven airline during the pandemic as passenger traffic dropped significantly due to government-imposed travel restrictions globally and locally to contain the COVID-19 pandemic.

PAL president and chief operating officer Stanley Ng had also said the airline will continue to develop its cargo business and offer more hybrid flights and last-mile cargo deliveries this year. He said PAL will develop all-cargo markets and wean itself from dependence on passenger traffic as a single revenue source.

Revenue from ancillary services surged 61% last year to P6.398 billion from P3.98 billion in 2020.

Passenger revenue, on the other hand, declined 11% to P37.256 billion from P41.860 billion.

Operating expenses were reduced by 23.3% to P62.80 billion from P81.84 billion mainly due to lower costs related to the grounding of aircraft.

PAL voluntarily filed for bankruptcy with the United States Bankruptcy Court in New York in September 2021 to implement a restructuring plan that will help it navigate and survive the COVID-19 crisis.

PAL emerged from the Chapter 11 restructuring last December after receiving unanimous support from its lenders, aircraft lessors, equipment manufacturers and service providers.

The restructuring plan provided for permanent balance sheet reductions from creditors, a 25% cut in fleet capacity, and improvement in the airline’s critical operational agreements.

For April and beyond, PAL’s summer schedule will cover 39 international destinations across 20 countries, as well as more than 1,000 destinations through codeshare alliances and partnerships.

PAL’s Manila hub performance is set to reach pre-COVID levels for domestic flights from April onwards, with 27 destinations and over 450 departures during the summer season. PAL will also build its Cebu hub to expand flights to 13 domestic routes and some flights to Japan.

PAL earlier announced it is mounting more than 1,500 additional flights in March, a 52% increase in its regularly scheduled flights, as it implements a major expansion of its overseas and local networks as international borders reopen and domestic travel restrictions ease.