PAL'S NET LOSS LOWER BY 41% - Marvin Germo

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By: Marvin Germo | April 15, 2019

2018 Vs. 2017 Net Losses

Compared to the 2017 net loss of P7.334 billion, PAL Holdings Inc. Slimmed its 2018 net loss to P4.330 billion, which is 41% lower. This is due to the fact that the known airline served about 16 million passengers in 2018. Though it generated higher revenues, the net loss couldn’t be lifted enough to make a positive result due to some major reasons. For current investors of PAL, this is a significant event as there is an improvement on the strategies of the airline company to narrow down the loss. The loss of the company shouldn’t be the single basis to define if it’s performing well or not.

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PAL’s Revenue in 2018

PAL has generated higher revenues in 2018 compared to the previous year. There has been a 16.2% jump or P150.4 billion in the firm’s 2018 revenues, considerably higher than the P129.5 billion revenue in 2017. The rise in the figures is because of the increase of passengers and number of flights operated by the firm. About 112,072 flights were operated, carrying 15.9 million passengers vis-a-vis. Indeed, there has been an increase if we take a look at the 103,362 flights operated in 2017. As of the end of December 2018, the airline was able to cover 39 cities in 18 countries. And apart from the flights, PAL’s cargo revenues went up by 21.7% or P10.217 billion in figures while ancillary revenues grew 14.8% to P11.564 billion because of the increase of number of passengers.

PAL’s Expenses in 2018

In spite the increase in the revenue, PAL’s expenses jumped by 17.8%, making a total of P155.7 billion because of the cost of flying operation which was higher than 2017. This is considered as the major reason why despite having a big lift on the firm’s revenue, a net loss is still reported. A major inclusion in the flying operation cost is fuel. The consumption of fuel grew by P13.9 billion, making a P52.3 billion expenses from P38.4 billion in 2017. The escalated jet fuel price with an average of $94.38 per barrel in 2018 affected the fuel expenses.

Other Causes For Increased Expenses

Aside from the fuel price, the lease charges of the firm also increase by P3.7 billion because of the delivery of 11 aircraft from 2017 through the end of 2018. Other expenses that affected the financial performance of the company include the aircraft and traffic servicing expenses accounting to P19.5 billion, reservation and sales expenses to P10.8 billion, and maintenance costs to P20.9 billion. All other charges not mentioned above shrunk to P2.2 billion, 42.7% lower than the reported P3.8 billion in 2017. The reduction is primarily because of the reversal of provision for contingency for FASAP case, wherein PAL earned the favor.

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