Philippine Airlines (PAL) will implement a “disciplined capital expenditure plan” in the near future after the company reported a sharp decline in its profitability in the second quarter due to yield pressure and rising operating costs.
The Manila-based airline’s operating profit for the three months ended June 30 was $64 million, down 64 percent from a year earlier. Revenue for the quarter fell 4 percent to $787 million, “due to earnings pressures resulting from the return of greater capacity to the market,” PAL said.
The airline points out that its operating profit in the quarter was also “negatively impacted” by higher costs related to flight and maintenance activities.
Airline CEO Stanley Ng added: “As the industry adjusts to a realignment between demand and capacity and continues to face cost and supply chain challenges, we are implementing a disciplined investment plan to modernize our fleet and continue our digital transformation so we can better serve our passengers.”
PAL adds that the decline in profitability is “in line with expectations” “… amid a normalizing market environment as opposed to the travel demand surges in 2023.”
For the six months ended June 30, PAL reported operating profit of $182 million, down 42% from the same period last year.
Revenues totaled $1.6 billion, up about 14 percent from the previous year, as PAL reported an increase in passenger traffic. The airline carried 7.9 million passengers in the half-year, up 13 percent, while the number of flights increased by 11 percent.
