Flag carrier Philippine Airlines (PAL) reported a comprehensive net income of P9.48 billion for the first half of 2024, 30 percent lower than in the same period last year.

Based on the disclosure of parent company PAL Holdings Inc. to the Philippine Stock Exchange (PSE), this is on the back of higher expenses related to its increasing operations and fleet expansion even as the market normalizes following the revenge travel surge in 2023.

The airline rounded out the first half of 2024 with higher volume of passengers, cargo and ancillary services, which resulted in a four percent growth in total consolidated revenues to P90.92 billion.

"Philippine Airlines remains on track in its transformative growth strategy as we deliver a more efficient airline offering quality service, to fulfill our mandate as the Philippines’ flag carrier and only full-service airline with the largest network,” said PAL Holdings President and Chief Operating Officer Lucio K. Tan III.

PAL expanded flights by 11 percent and carried almost eight million passengers across its international and domestic network, 13 percent more than the seven million in the same period of 2023.

The carrier noted that its expansion aligns with an overall growth in air travel, with Manila’s Ninoy Aquino International Airport alone showing a 13 percent growth in passenger volume.

"As the industry adjusts to a re-balancing between demand and capacity, and continues to face cost challenges, we are implementing a disciplined investment plan to upgrade our fleet and continue our digital transformation so that we can serve our passengers better," said PAL President and COO Captain Stanley K. Ng. 

He added that "we are happy to announce a milestone expansion of our Mabuhay Miles lifestyle program, having just breached the level of six million members."

Passenger revenues grew by P1.60 billion or 2.05 percent to P79.84 billion during the first six months of the current year as compared with the P78.24 billion in the same period last year due to the increase in passenger volume, partially offset by the decrease in average fare per passenger.

Cargo revenues increased to P4.12 billion or P310 million higher than the last year's figure of P3.81 billion due to higher cargo volume. Ancillary revenues grew by 28.56 percent to P6.90 billion mainly due to higher volume of ticket rebooking and seat upgrades.

Flying operations expenses incurred in the first half of 2024 amounted to P42.91 billion, 13.09 percent higher than last year's P37.94 billion, largely due to the 7.10 percent increase in fuel consumption brought about by the increase in the number of flights operated.

The incremental depreciation of four aircraft, of which three aircraft were delivered in second half of 2023 and one aircraft in first quarter of 2024 also contributed to the increase of flying operations expenses.

This resulted in an operating income of P10.6 billion, in line with expectations amidst a normalizing market environment versus the travel demand surges of 2023.

Capital expenditures increased to $157 million mostly for aircraft purchases, maintenance and cabin upgrades to reinforce operational integrity and a well-differentiated quality service for the airline’s customers.

PAL operates the largest network of nonstop flights between the Philippines and the US, serving Los Angeles, San Francisco, New York, Honolulu, and Guam. Beginning October this year, Seattle will join the network as PAL's sixth US destination and the eighth in North America.