The operator of Philippine Airlines said Monday net income fell 22 percent in the first half from a year ago, on higher operating expenses and promotional offerings.
PAL Holdings Inc. said comprehensive net income amounted to P4.62 billion in January to June, down from P5.94 billion in the same period last year.
PAL Holding said comprehensive income in the second quarter also dropped 11.3 percent to P1.92 billion from P2.16 billion in the same quarter last year.
PAL’s six-month revenues increased 2.3 percent to P57.57 billion from P56.28 billion a year earlier. Revenues in the second quarter rose to P28.45 billion from P28.30 billion.
PAL Holdings said the increase was brought about by the peso depreciation, which averaged 47.19 a dollar in the first half, compared to 44.55 a dollar last year.
The company said if the exchange rate had remained at the 2015 level, revenues should have decreased P1.6 billion, on lower passenger and cargo revenues generated during the period as a result of the decrease in yields from passenger seat offerings and the positive effect of port strike in the United States to cargo revenues in 2015.
Operating expenses grew 5.8 percent to P53.42 billion in the six-month period from P50.49 billion last year, led by the increase in flights as a result of new routes.
“The increase in expenses was attributable mainly to higher maintenance, aircraft and traffic servicing, reservation and sales, passenger service and general and administrative offset by lower expenses related to flying operations,” PAL Holdings said.
PAL Holdings said the 4.1-percent decrease in flying operations was due to lower fuel cost.
Fuel expenses dropped 14.3 percent in the first half, as a result of the decline in average price per barrel of aviation fuel from $88.37 in 2015 to $63.38 in 2016.
PAL earlier signed a deal with Airbus to acquire six A350-900 jets worth $1.8 billion, with an option to buy six others to support long-haul operations.
PAL said it planned to deploy the A350 XWB (extra wide body), which seats more than 300, on new routes to North America and Europe.
The first A350 is scheduled to be delivered in 2018.