PAL earns record profits under Lucio Tan III
Flag carrier Philippine Airlines (PAL), the operating subsidiary of PAL Holdings Inc., reported a 92 percent jump in net income last year to $379 million or P21 billion, an all-time high and under the first year of leadership of Lucio Tan III, from the $197 million or P11 billion earned in 2022.
In a statement, PAL said the $379-million net income was the highest in the airline’s history, excluding any one-off restructuring benefits. This record positive performance was achieved amid a robust increase in operations and passenger traffic, both internationally and domestically.
PAL Holdings President and Chief Operating Officer Lucio C. Tan III thanked the customers who entrusted their travel journeys to PAL and commended the dedication and commitment of the PAL Group workforce.
“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 said.
The flag carrier operated 105,294 flights in 2023, a 36 percent growth from the 77,533 flights mounted in 2022, an increase of more than 27,000 flights.
The increase in flight activity enabled PAL to carry 14.7 million passengers in 2023, a 58 percent uptick from 9.3 million passengers in 2022.
With the continued recovery of air travel post-pandemic, PAL recorded a 37 percent surge in passenger revenues to $2.9 billion (P160 billion) in 2023from $2.1 billion (P114 billion) in 2022.
Total net revenues, including cargo and ancillary revenues, grew by 27 percent to $3.2 billion (P181 billion) from $2.6B (P139 billion).
Meanwhile, total operating expenses rose by 21 percent to $2.7 billion (P153 billion) from $2.3 billion (P123 billion) in 2022 mainly due to the 36 percent increase in number of flights operated in the current year.
Fuel remains the largest cost of PAL, representing 31 percent of revenues. Fuel cost increased by eight percent year-on-year to $1 billion (P57 billion) due to the increase in flight activity offset by the decrease in jet fuel prices in 2023 versus 2022.
Operating income grew by 69 percent to $501 million (P28 billion), from $297 million (P16 billion) and earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 43 percent to $765 million (P43 billion).
Operating and EBITDA margins substantially improved to 15 percent and 24 percent, respectively, reflecting the increased scale and efficiency of PAL’s operations.
PAL President and Chief Operating Officer Captain Stanley K. Ng said, “to preserve the gains we have achieved, we must not rest on our laurels.”
“PAL’s corporate transformation continues – we are taking in new aircraft, retrofitting cabins of current aircraft, upgrading airport lounges and introducing more product innovations to address our strategic, financial and operational needs across all areas of our operations. Our focus is set firmly on taking care of our customers. We will work collaboratively with government authorities and our service partners to build up our network and take the nation’s flag carrier to new heights in the coming years,” added Ng.
PAL plans to capitalize on the increased resources to strengthen its global and local network, upgrade its aircraft fleet and introduce new and improved products and services in the coming years.