PHILIPPINE Airlines (PAL) posted a $10-million loss in the first quarter of its fiscal year due to high fuel cost and political unrest in some markets as well as the Japan disasters.
From April to June, PAL booked a total comprehensive loss of $10.6 million compared to the $31.6 million income registered in the same period last year.
The airline attributed the slide to modest revenue growth eroded by significant increases in fuel prices and other factors such as the political turmoil in the Middle East and North Africa and natural calamities like the Japan earthquake and tsunami.
For the period in review, operating revenues improved by $25.6 million or 6% to $454.1 million. Passenger yields gained 9% while the sluggish demand cut passenger traffic by 7%.
Operating expenses escalated 18% to $464.7 million compared to the same period last year. Jet fuel cost alone, the airline’s biggest expense item, amounted to $210.8 million or an increase of 36% from the year-ago level of $154.6 million.
In another development, President Benigno Aquino III last week rejected with finality the PAL Employees Association (PALEA) appeal to stop the carrier from implementing an outsourcing plan that would result in the layoff about 2,600 employees.
The decision came after PALEA on August 3 filed manifestations to the Office of the President (OP) and the National Labor Relations Commission, which cited PAL’s net income of $72.5 million in the last fiscal year.
“The OP has turned a blind eye to the fact that PAL’s robust financial health belies the latter’s argument that outsourcing is necessary for the flag carrier to survive. Since PAL is awash in profits even without outsourcing then there is no reason for it to retrench employees,” PALEA president Gerry Rivera said in a statement.
PALEA is set to appeal the issue to the Court of Appeals.
