PHILIPPINE Airlines, Inc. (PAL) registered an operating income of US$33.8 million (P1.7 billion) and a net comprehensive income of US$22.6 million (P1.2 billion) for the first quarter (Q1) of 2022.
PAL generated US$467M (P24B) in revenues from a 201% growth in passenger revenues and a 72% growth in cargo revenues for the first quarter, as compared to the same period in 2021.
This is a significant development that marks PAL’s return to profitability. The last time that PAL registered positive 1st quarter results was in 2016.
The uptick in revenues reflects a stronger recovery in travel volumes as borders reopened in the Philippines and other key markets in Asia, Australia, and North America.
The cargo sector continued its strong performance.
The flag carrier incurred operating expenses of US$433M (P22.3 B) in the same period, a 50% increase attributed to the significant rise in fuel prices along with the rise in the number of operated flights.
PAL’s positive operating income of US$33.8 M for Q1 2022 is a remarkable turnaround from the US$106.5M operating loss incurred in the first quarter of 2021.
The improved financial performance was also reflected in PAL’s EBITDA (earnings before interest, taxes, depreciation, and amortization) of US$93M (P4.8B) for Q1 2022.
“We welcome the financial turnaround demonstrated by the positive operating results for the first quarter of 2022,” says Captain Stanley Ng, PAL President & Chief Operating Officer.
“Just the same, we must not lose sight of the considerable headwinds we continue to face, brought about by rising fuel prices, the economic fallout from geopolitical events such as the conflict in Ukraine, and the incomplete recovery in travel markets, as certain Asian regions have yet to fully open their borders. To protect the gains we’ve made so far, we must be resolute in exercising fiscal discipline and faithfully carrying out our restructuring initiatives.”
PAL has now achieved positive income results for a whole six-month period, showing an operating income of US$59M and net income of US$42M in the 4th quarter of 2021, with an EBITDA of US$145M.
For 2021 overall, PAL reported a comprehensive income of US$1.22 billion, which reflected the impact of a successful Chapter 11 financial restructuring process that involved a series of breakthrough agreements with major aircraft creditors, bank creditors, original equipment manufacturers (OEMs), and vendors that demonstrated stakeholders’ confidence in the long-term prospects of PAL.
Due to the continued impact of the pandemic throughout 2021, the airline’s operations still suffered a US$302M loss last year, which was nonetheless a marked improvement on the US$849M operating loss in 2020.
Buoyed by US$505 million in fresh capital from its shareholder family, PAL is embarking on a major network re-expansion to restore more flights and routes as the Philippines, and other countries ease travel restrictions and allow for the continued comeback of leisure and business travel. By Jun I. Legaspi