Aviation boom fuels PAL’s 92% profit rise

Aviation boom fuels PAL’s 92% profit rise | Daily Tribune

Getting momentum from the so-called post-pandemic revenge travel, aviation revenues maintained a strong showing last year.

Flag-carrier Philippine Airlines (PAL) reported a substantial 92 percent surge in net income in 2023, reaching P21 billion compared to the previous year’s P11 billion amid a notable uptick in air travel.

With Lucio C. Tan III at the helm, PAL has gained significant growth in its operational and passenger traffic endeavors, encompassing both domestic and international destinations. This has resulted in favorable performance outcomes.

“I express my profound thanks for the support and loyalty of our valued passengers and assure them of our unstinting focus on taking care of them when they fly with us. I laud the strategic approach of the PAL management team in navigating industry challenges,” Tan, PAL Holdings president and COO, said on Monday.

“Our greatest resources are our people in the PAL Group who have stood resilient and have adopted a transformation mindset that benefits the company and its customers,” he added.

Improved financials

Throughout 2023, PAL mounted 105,294 flights, representing a 36 percent growth from 77,533 flights in 2022.

According to PAL, the increase in flights enabled the air carrier to carry 14.7 million passengers in 2023, or equivalent to a 58 percent uptick from 9.3 million passengers in 2022.

Driven by these improvements, PAL recorded a 37 percent surge in passenger revenues to P160 billion from P114 billion in 2022. Its total net revenues, including cargo and ancillary revenues, grew by 27 percent to P181 billion from P139 billion.

PAL’s operating expenses significantly increased by 21 percent, from P123 billion in 2022 to P153 billion, mainly driven by the surge in flight operations.

Fuel costs continue to be PAL’s major expense, accounting for 31 percent of revenue.

Despite a decrease in jet fuel prices in 2023 compared to 2022, fuel costs rose by 8 percent year-on-year to P57 billion due to increased flight activity.

PAL’s operating income experienced significant growth, increasing by 69 percent from P16 billion to P28 billion.

Furthermore, earnings before interest, taxes, depreciation and amortization (EBITDA) also showed an impressive 43 percent growth, reaching P43 billion.

Notably, operating and EBITDA margins improved considerably to 15 percent and 24 percent, respectively, reflecting the increased scale and efficiency of PAL’s operations.

To maintain the company’s growth trajectory, Capt. Stanley K. Ng, the president and chief operating officer of PAL, stated that they will capitalize on their upcoming delivery to improve customer services.