Philippine Airlines Flies Out of Turbulent Skies With Soaring Revenues

After suffering losses following lockdowns and travel bans during the pandemic, things are finally looking up for Philippine Airlines.

Just like many industries, travel and tourism was hit hard during the pandemic, as lockdowns and travel bans halted operations. However, this doesn’t stop the expenses that these companies still need to shell out—from overhead costs to salaries, maintenance fees, and more.

The same goes for billionaire Lucio Tan’s airline company Philippine Airlines (PAL). During the height of the pandemic in 2020, PAL reported a record loss of PHP 71.8 billion. That’s a whopping 600%!

Thankfully, with cost cutting measures and the suspension of long-term debt payments to lenders, the airline was able to somewhat remain afloat. While revenues dropped by 64% to P55.26 billion, expenses also fell 46% to P81 billion amid flight restrictions and the collapse in travel demand.

Fast forward to the present—the “new normal”—where quarantine restrictions have eased and traveling is back. Escaping turbulent skies, PAL made a recovery as it reported a net income of PHP 4.2 billion in the first half of 2022 versus a PHP 16.552 billion loss in the same period last year.

This is highly unprecedented but good news on their end, as this is the first time that PAL posted two consecutive quarterly profits since the late President Benigno Aquino III was still in Malacanang.

In the Clear

With a passenger growth of 258% and cargo expansion of 31%, PAL said that revenues soared to an all-time high with a 223% increase, or PHP 58.1 billion during the first half of 2022. What’s more, the flag carrier was able to profit despite acquiring almost double its expenses at PHP 51.5 billion—PHP 19.9 billion of which can be credited to higher fuel prices.

According to Tan’s son-in-law, PAL president and COO Capt. Stanley K. Ng, the airline’s comeback is due to the loyalty of PAL’s customers. “We acknowledge tough challenges ahead, as various regions grapple with rising inflation, higher energy costs, and economic uncertainties,” he says.

“We will continue to be fiscally prudent as we mobilize our talents and resources to grow responsibly—in a way that helps boost tourism, supports overseas Filipinos, and offers the best value to travelers and cargo shippers,” Ng adds.

What’s more, PAL has hit the ground running with $505 million (around PHP 28.12 billion) in fresh capital from Tan as it restored its flights and routes amid the easing of travel restrictions in the Philippines and other countries.