Philippine Airlines (PAL) will continue to invest in renewing the fleet and service, now that the financial results are improving. The better results enable the airline “build a better, stronger and more agile Philippine Airlines that creates greater value for our customers,” President and Chief Operating Officer Stanley K. Ng said in a press release on August 11.
The airline reported a Q2 net profit of PHP 8.1 billion ($141 million) compared to PHP 3.0 billion in the same quarter last year. Revenues increased by 27 percent to PHP 45.6 billion, mainly thanks to carrying more passengers. Operating expenses increased to PHP 35.1 billion from PHP 28.5 billion. The operating profit improved to PHP 10 billion, up from PHP 4.8 billion last year.
PAL grew its HY1 net profit to PHP 13.6 billion from PHP 4.1 billion. Passenger revenues were up to PHP 78.2 billion from PHP 33.1 billion as the airline carried seven million passengers. This is up 89 percent over 2022 when demand was still low due to Covid travel restrictions.
Services to China were resumed and now include Beijing, Shanghai, Guangzhou, Quanzhou, and Xiamen. Key routes in the network are those to New York, San Francisco, Los Angeles, Toronto, Guam, Honolulu, and Vancouver, as well as to Melbourne, Sydney, Brisbane, and the new service to Perth. Singapore, Bangkok, Phnom Penh, Kuala Lumpur, Tokyo, Nagoya, Osaka, Fukuoka, Seoul, and Busan show on the Asian network. PAL also operates to Doha, Dammam, Riyadh, and Dubai in the Middle East. In March, it announced an interline agreement with Emirates. PAL has no services to Europe. Clark and Cebu are major regional hubs alongside Manila. The domestic network covers 32 destinations.
Cargo revenues were down by 54 percent, but Philippine Airlines doesn’t specify them. It says that many cargo charter flights were discontinued as priority was given to passenger services. The operating profit improved to PHP 17.4 billion from PHP 6.6 billion, and EBITDA to PHP 24.2 billion from PHP 14.4 billion, resulting in an operating margin of 27.8 percent.
New A350s and A321neo are confirmed
Stanley Ng isn’t sharing details of the fleet plans, except for the investment in nine Airbus A350-1000s that was confirmed during the Paris Airshow. They will replace nine Boeing 777-300ERs that are almost ten years old. When delivered, the -1000s will complement the two A350-900s (picture) that have remained in the fleet after four more were returned to their lessors following the restructuring during the pandemic. These aircraft now operate with Lufthansa.
Philippine Airlines is also in the process of renewing the narrowbody fleet and has taken delivery of eight Airbus A321neo’s out of 21 on order. Thirteen A320ceo’s operated by PAL Express are currently the oldest aircraft in the fleet with an average age of almost fourteen years. Ten A330-300s are on average 9.5 years old.
Philippine Airlines says it will also improve its services, “increasing customer care and contact center agents, and rolling out a new customer relations management system within 2023 to provide more personalized self-service options for customers.”
Lucio C. Tan III, President & Chief Operating Officer of PAL Holdings, said in a media statement: “We are pleased to see that Philippine Airlines is beginning to realize the benefits of the sacrifices we took over the past few years. PAL is on a recovery track and is now in a position to carry out major product and digital transformation initiatives in order to grow amid a more competitive and challenging aviation industry.”
