Lucio Tan airline’s profit skids as expenses rise
PAL Holdings Inc., the listed operator of flag carrier Philippine Airlines, saw a 55 percent drop in net income in the first nine months of the year to P2.96 billion on higher expenses and flat revenues.
Revenues reached P85.35 billion, slightly higher than the P82,48 billion reported in the same period a year ago. The meagre revenue growth was mainly due to lower cargo revenues as a result of the positive effect of the port congestion in Manila and port strike in the US in 2015.
Total operating expenses rose 8.9 percent to P76.21 billion primarily due to increase in flight frequencies and introduction of new routes. The increase in expenses was attributable mainly to higher maintenance, aircraft and traffic servicing, reservation and sales and passenger service partly offset by lower expenses related to flying operations.
For the third quarter, PAL Holdings swung to a net loss of P1.66 billion, weighed down by higher expenses This was a reversal of the P611.2 million profit posted in the same period last year.