PAL Reports P11.85 Billion Loss

PAL Holdings Incorporated, the parent company of Philippine Airlines, reported losses reaching P11.85 billion in the first nine months of its 2013 fiscal year ending in December. The carrier blames the widening losses on lower passengers revenues and increasing expenses.

pal holdings inc
Copyright Photo: Diego Roxas/PPSG
The holding company that is jointly owned by Lucio Tan and the San Miguel Group reported that the loss is more than four times the P2.74 billion net loss reported for the same period in the 2012 fiscal year. P5.51 billion of the 2013 losses amounted from operations alone including P5.09 billion in other charges and P1.31 in financing charges. 

“The resulted other charges was primarily due to the impairment loss recognized for certain passenger aircraft that have been grounded or identified for retirement within 2014,” PAL said in financial statement released at the Philippine Stock Exchange.

Total revenues at the carrier remain almost unchanged at P55.97 billion, compared to P55.68 billion the previous year. The flat revenue comes in spite of recent expansion attempts in Canada, the Middle East, Australia, and Europe. Passenger revenues, representing 81 percent of total revenue, actually dropped 3 percent to P45.5 billion. The number of passengers carried by the flag carrier dropped to 5 million from 7.6 million the previous year. 

Operating expenses continue to rise with increasing jet fuel costs and rising maintenance expenses caused by ageing aircraft that have been forced to continue service due to restrictions imposed by the United States on the Philippines that were only lifted just this month. Jet fuel costs rose 6.7 percent to P36.4 billion while maintenance expenses increased 6.6 percent to P7.41 billion. Overall expenses were up 5.2 percent over the previous year at P61.5 billion. However, jet prices actually declined from an average of $131.74 per barrel one year ago to $127.74 per barrel for the current nine-month period.

Philippine Airlines is banking on the recent Category 1 upgrade from the United States to improve its financial prospects moving forward as it replaces ageing aircraft with modern fuel efficient aircraft on existing US routes and expands services into the Eastern United States.


  1. Word in the aviation world is that PAL is in serious trouble with its banks, having borrowed to the limit and not yet producing results.

    1. It's called growing pains. Hopefully when they replace the planes for the American flights their losses will lessen.

  2. How do you expect this airline to succeed. They have no clue about branding, marketing, and attracting high yield premium passengers. Look at all their Facebook ads, it looks like a Greyhound Bus advert! ALL Powerpoint ads. With the disgustingly cheap looking adverts, do they think they would be able to attract premium passengers who fly the likes of 5* airlines. Look at Garuda, Fiji Airways with their impeccable branding and marketing. They should learn from others and start hiring world class consultants, ad agencies and advisors. Not from a CEO who used to be a car driver!

  3. Let Foreign carriers like Emirates Airlines to take over PAL or close PAL and no Full Service Long Haul Airline will operate the country. That is what happened to Brazil before when VARIG collapse and Greece when Olympic Airlines collapse

  4. Hmmm interesting. There is an article in the Inquirer today (23 Apr) that attributes the loss to a one time charge for the write off if the 4 747-400's. I wonder why PAL did not mention this when the news about the loss first came out.


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