Flag carrier Philippine Airlines (PAL) maintained cautious optimism for the year despite posting modest gains in the last two quarters of its fiscal year.
PAL said the continued volatility in fuel prices and the new case of bird flu recorded in Hong Kong last week are likely to affect the airline industry which has yet to fully recover from the global economic crisis.
In the second quarter of its fiscal year (July-September), PAL posted a $28.2-million gain, 33% higher than the $299.7 million posted in the same period last year.
"The global airline industry remains vulnerable to volatile market conditions. Take fuel, for example. If the upward trend continues, it could wipe out all our recent gains," PAL president Jaime Bautista said.
Fuel comprises about 40% of PAL’s total expenses.
Total expenses reached $371.2 million, a 7% increase from last year’s $346.0 million.
Maintenance expenses, however, dipped 36% as a result of cost-cutting initiatives.
PAL is closely watching the recent re-emergence of the AH1N1 virus in Hong Kong. The avian flu can dampen demand at a time when the Philippines has yet to fully recover from the stigma of the recent hostage crisis involving Hong Kong nationals and the ensuing negative travel advisory against the Philippines.
Meantime, the airline is optimistic the labor row with its ground crew will be settled soon to shield the company from unjustified expenses.
Last week, PAL management and the PAL Employees Association (PALEA) agreed to maintain a status quo while the Department of Labor and Employment (DOLE) reviews its decision allowing PAL to push through with its restructuring plan.
The spin-off of PAL's three non-core units will lay off approximately 2,600 workers.
Part of the management-PALEA agreement was the withdrawal of the notice of strike filed by PALEA on November 5.
"We are now on a status quo in deference to Malacañang's authority to resolve the dispute," PAL spokesperson Cielo Villaluna said in a statement.
"We are showing our respect for the President’s authority to review the decision of his Cabinet and intervene on labor disputes as mandated under the Constitution," she said.
Last week, President Aquino said he was stepping into the labor dispute involving PAL and PALEA.
