Flag carrier Philippine Airlines (PAL) propelled its net income to over ₱10 billion in 2025, driven by strong passenger demand, offsetting a challenging year marked by higher expenses.

In a public disclosure, PAL Holdings Inc. reported that PAL’s net income reached ₱10.07 billion last year, an increase of nearly a quarter from ₱8.12 billion in 2024.

Over 95 percent, or ₱9.62 billion, of the net income is attributable to PAL Holdings, the airline’s parent firm.

The airline’s revenues soared to ₱183.83 billion last year, driven largely by passenger revenues, which went up by a notch to ₱156.93 billion.

This increase was driven by strong travel demand, with passenger volume rising 4.3 percent to 16.29 million from 15.62 million in the prior year.

Despite increasing its number of flights by three percent to 115,107, the airline managed to keep its passenger load factor—the number of booked seats across available capacity—at a solid 78.7 percent.

The expansion in flight offerings also led to an increase in cargo revenues, which rose three percent to ₱9.49 billion, driven by higher cargo volume.

Ancillary revenues also improved by 25 percent to ₱17.33 billion last year, mainly due to higher volumes of seat upgrades.

PAL President Richard Nuttall said the strong performance last year sustained the airline’s transition from post-pandemic recovery to long-term growth.

"Despite an industry-wide softening of passenger yields, we successfully defended our top line through disciplined revenue and network management,” he said.

The carrier’s revenue performance offset a six percent increase in operating expenses to ₱169.67 billion from ₱160.04 billion, due to higher flying operations and aircraft maintenance costs.

Operating costs were also driven by a 16.5 percent increase in aircraft and traffic servicing expenses to ₱19.61 billion, amid higher landing and takeoff charges in Manila and other hubs abroad.

Likewise, PAL said it faced industry-wide supply chain disruptions, extended aircraft maintenance turnaround times, and global engine reliability issues throughout the year.

To navigate these cost pressures, Nuttall said the airline is “aggressively driving internal efficiencies” while investing heavily in service improvements to maintain travelers’ trust.

Last year, PAL continued to advance its revitalization program by retrofitting three A321ceo aircraft and taking delivery of two additional A320-200s to help meet growing domestic travel demand.

Earlier this year, PAL unveiled its first Airbus A350-1000, becoming the first carrier in Southeast Asia to operate the next-generation widebody aircraft.

Five more A350-1000 aircraft are scheduled to join the fleet within the year, with the remaining three arriving in 2027.

For the year, PAL is optimistic about solidifying its market position through measured capacity growth and strategic partnerships aimed at strengthening high-revenue international corridors.

“Crucially, as the aviation landscape becomes increasingly contested, PAL is intensifying its focus on cost management and improving operational efficiencies to sustain its competitive advantage against other carriers,” it said.

The airline, however, is monitoring the potential impact of rising fuel prices on its operations, as jet fuel accounted for 31 percent of its operating expenses last year.

Fuel prices are on an upward trajectory due to supply disruptions caused by the conflict in the Middle East, whose potential impact on revenues cannot yet be estimated, PAL said.