PAL’s income soars in 2023

PAL’s income soars in 2023

Apr 3, 2024, 1:55 AM
Rose De La Cruz

Rose De La Cruz


Attributing its 92-percent rise in income to a record $379 million to its employees’ efficiency and customer-centered strategies, legacy carrier Philippine Airlines is now looking to expand its flight service routes this year.

It must be recalled that the flag carrier was also named the 8th most punctual carrier in the Asia Pacific region in December 2023 and topped as the most punctual airline in Southeast Asia, outperforming carriers from China and Australia.

Back then, PAL’s leadership acknowledged the efficiency of its staff and crew, which won the loyal patronage of its customers.

“We are grateful to all our customers and stakeholders for their support, to our employees for their teamwork and dedication, and to our government authorities, whose productive collaboration and partnership helped us achieve the operational efficiencies needed to earn this ranking among the top 10,” said PAL president and COO Capt. Stanley Ng.

What lies ahead for PAL

For 2024, PAL is working with Airbus for two orders: 13 narrow-body units and 9 wide-body jets to be funded by a combination of debt, equity and leases as part of efforts to balance PAL’s finances, Ng added.

By the end of 2023, it will operate 79 aircraft and is in discussion with aircraft leasing companies and financial institutions to purchase new planes to cover for new routes to be introduced in 2024, he said.

PAL is set to open its biggest one soon at the Terminal 1 of the Ninoy Aquino International Airport with the coming delivery of 13 A321neos each valued at $129.5 million that were ordered prior to the pandemic.

It is also investing $3.2 billion for nine A350-1000s to be deployed in long-haul flights to North America and soon Europe, even with an elevated cost of fuel.

Boom year

PAL attributed its record-breaking performance to its resilience and a customer-centric strategy that prioritizes evolving market opportunities. This $379 million net income excludes any off-restructuring gains.

As business blog site said: “The flag carrier’s success came after Lucio C. Tan III (LT3), Kapitan’s grandson, assumed a key role in PAL’s operations following his father’s passing in 2019. He took the reins of PAL Holdings in May 2023.”

LT3 extended his gratitude to loyal customers and commended the dedication of the PAL Group workforce for the airline’s strongest financial performance ever.

“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. 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,” Tan III said.

The post-pandemic travel boom fueled a 37 percent surge in passenger revenue for PAL, reaching $2.9 billion in 2023 from $2.1 billion in 2022. Total net revenues, including cargo and ancillary income, also climbed 27% to $3.2 billion.

PAL operated 105,294 flights, 36-percent more than the 77,533 flights mounted in 2022. This translated to a 58-percent rise in passengers carried, transporting 14.7 million in 2023, up from 9.3 Million the previous year, Bilyonaryo reported.

While total operating expenses increased by 21 percent to $2.7 billion, this aligns directly with the 36 percent jump in flight operations.

Fuel remained the largest expense for PAL, accounting for 31 percent of total revenue. Despite the increased flight activity, fuel costs only grew by 8 percent year-on-year to $1 billion due to a favorable decrease in jet fuel prices.

Operating income soared by 69 percent to $501 million, while earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 43 percent to $765 million. These figures translate to significantly improved operating and EBITDA margins of 15 percent and 24 percent, respectively, reflecting the growing scale and efficiency of PAL’s operations.

Ng stressed that the airline won’t be resting on its laurels. He said PAL is focused on strengthening its network both domestically and internationally, modernizing its fleet, and continuously innovating with products and services.

Customer care remains a top priority, with PAL collaborating with government and service partners to build a robust network.

PAL will also soon be flying to Seattle, the largest city in the Pacific northwest and home to a large and thriving Filipino community and a gateway to Vancouver, Canada, said Inquirer’s Biz Buzz column.

With this expanded reach, the Tan-led airline will fortify its stronghold on the lucrative American market that is willing to pay top dollar for a direct link between the motherland and their adopted home.

Currently PAL flies direct to Los Angeles, San Francisco and New York as well as Guam and Hawaii, where high load factors of such flights contributed to its record high revenues.

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