Philippine Airlines Continues to Profit in July

Philippine Airlines is set to continue its profitable performance into the second half of 2014 as the carrier prepares to post a net-income of $11 million for the month of July. The nation's flag carrier recently reported its first quarter of profit after several years of heavy losses.

Copyright Photo: Angelo Agcamaran/PPSG

According to unaudited financial statements obtained by the Philippine Daily Inquirer, Philippine Airlines posted a 604 percent increase in earnings for the month of July versus the same period the previous year, when the carrier earned a net income of just $1.5 million. 

The latest results and improved performance in July is attributed to an increase in passengers carried during the period and an increase in the carrier's flights given the extensive number of new routes that Philippine Airlines launched over the last year with the delivery of new aircraft. In addition, the airline is reporting reduced operational costs as a result of improved efficiencies.

The total revenue for July reached $195.6 million, an increase of 33 percent from 2013. For the first seven months of 2014, Philippine Airlines has recorded revenues of $1.29 billion. With the introduction of its newer fleet of modern, fuel efficient aircraft, maintenance and fuel expenses dropped to 47 percent of the carrier's total expenses from 55 percent the previous year. 

The recent improvements in the carrier's performance have been attributed to the company's on-going fleet modernization program, better yield management, better aircraft deployment, and the expansion of routes in key markets. Analysts also suggest that prudent cost management has helped to improve the carrier's performance but many question whether the airline has taken it too far. 

Philippine Airlines has also enjoyed the benefit of improved market conditions with consolidation in the domestic airline industry, restoration of Category 1 status by the United States Federal Aviation Administration, and removal from the European blacklist, enabling the carrier to pursue expansion in the US and Europe, while deploying more fuel efficient aircraft. 

Meanwhile, the ownership dispute over Philippine Airlines continues between Lucio Tan and San Miguel Corporation, postponing any further developments at the carrier such as new routes to the United States and orders for more long-haul aircraft. The company recently announced that it would postpone its annual stockholder meeting until the shareholder restructuring has been resolved.