Market Intelligence: South East Asia

Philippine Airlines (PAL) will deepen its investments in fleet expansion and service enhancements as the Philippine flag carrier reported a record net income of US$ 250 Million (PHP 13.6 Billion) and operating income of US$ 314 Million (PHP 17.4 Billion) for the first half of 2023.

The fleet investments include the purchase of nine (9) Airbus A350-1000 long-range jetliners, valued at more than US$ 3.2 Billion (PHP 176.6 Billion) based on the list price of US$366.5 Million per aircraft. PAL is increasing customer care and contact center agents, and rolling out a new customer relations management system within 2023 to provide more personalized self-service options for customers.

“We remain steadfast in our commitment to invest in new aircraft, improved cabins, and enhanced travel experience for our valued customers,” said PAL President and Chief Operating Officer Capt. Stanley K. Ng. “The latest positive financial results enable us to build a better, stronger and more agile Philippine Airlines that creates greater value for our customers, and we are grateful for their continuing support and patronage.”  

“We are pleased to see that Philippine Airlines is beginning to realize the benefits of the sacrifices we took over the past few years.  PAL is on a recovery track and is now in a position to carry out major product and digital transformation initiatives in order to grow amid a more competitive and challenging aviation industry,”  said Mr. Lucio C. Tan III, President & Chief Operating Officer of PAL Holdings, Inc., the airline’s parent company.

PAL’s second quarter 2023 revenues grew by 27% to US$ 820 Million (PHP 45.6 Billion), largely due to higher passenger numbers.  Operating income for Q2 increased by 95% to US$ 179 Million (PHP 10 Billion) vs. US$92 Million (PHP 4.8 Billion) in Q2 2022.

Accordingly, PAL finished the second quarter with a net income of US$ 141 Million (PHP 8.1 Billion), almost tripling the US$ 47.9 Million (PHP 3.0 Billion) income registered in Q2 last year. 

For the full first half of 2023, PAL registered the following results:  

• The airline carried 7 million passengers (an 89% increase vs. H1 2022) and operated over 50,400 flights (56% more than in H1 2022), logging an 81.6% average passenger load factor;
• Passenger revenues rose to US$ 1.4 Billion (PHP78.2 Billion), or $0.6 Billion (PHP 33.1 Billion) higher than 2022, as demand continues to recover on PAL’s international and domestic routes;
• Cargo revenue dropped 54% versus last year, as many cargo charter flights were discontinued to give way to more passenger flights to meet the surge in demand;
• The airline realized an operating income of US$ 314 Million (PHP 17.4 Billion), versus the US$ 125 Million (PHP6.6 Billion) recorded in the first half of 2022.
• The EBITDA of US$ 444 Million (PHP24.2 Billion) for the period was 82% higher than last year’s US$ 244 Million (PHP14.4 Billion), with EBITDA margin increased to 27.8% (vs. 22% in H1 2022).
• Net income grew to $250 Million (PHP 13.6 Billion) from $70 Million (PHP 4.1 Billion) in H1 2022.

In the first half of 2023, PAL restored flights on several routes to mainland China and launched nonstop services to Perth along with flights from Clark to Caticlan and Boracay.

In addition to an extensive network to 32 domestic destinations served from hubs in Manila, Cebu, Clark and Davao, the Philippine flag carrier operates the largest network of nonstop flights between the Philippines and North America, Japan, the Middle East and Australia.

Source: Philippine Airlines Press Release
Photo Credit: Airbus (shown as meta image)