News
Cebu Pacific hits record high as PAL profit falls away
August 19th 2016
The two largest airlines in the Philippines – flag carrier Philippine Airlines (PAL) and budget carrier Cebu Pacific Air (CEB) – this week posted their first-half results. Read More »
PAL Holdings’ net profit attributable to shareholders for the period ended June 30 was 4.53 billion pesos ($98 million), down 21% year-on-year, on 2.3% greater revenues. PAL said the revenue increase was brought about by the peso depreciation, which averaged 47.19 a dollar in the first half, compared with 44.55 a dollar last year. The carrier said if the exchange rate had remained at the 2015 level, revenues should have decreased as a result of lower passenger and cargo yields.
PAL’s operating expenses rose 5.8% during the first half. “The increase in expenses was attributable mainly to higher maintenance, aircraft and traffic servicing, reservation and sales, passenger service and general and administrative costs offset by lower expenses related to flying operations,” it said.
Despite these challenges, PAL president, Jaime Bautista, said the firm hoped to end 2016 with a profit.
Budget rival, CEB, reported a first-half net profit of 7.7 billion pesos ($164 million), a substantial improvement on the 5.2 billion pesos it posted the previous year. Passenger numbers grew 8.7% year-on-year, loads improved 5.4% to 87.2%, and revenue rose from 29.6 billion last year to 34.3 billion pesos this year.
CEB is on a rapid growth trajectory. It has a fleet of 58 aircraft, including 49 Airbus and nine ATR airframes, but plans to grow to over 100 aircraft by 2020. “Between 2016 and 2021, we are anticipating the delivery of 30 A321neos, for long-range capability, and 16 ATR72-600 turboprop planes, for better inter-island connectivity,” said CEB president, Lance Gokongwei.
Earlier this month, CEB placed a top-up order for two additional A330-300s for long-haul services to the Middle East. It already operates six -300s in a high-density 436-seater all-economy configuration.
In other news, the Philippine government’s plan to move a select number of domestic flights from Manila’s infamously-congested Ninoy Aquino International Airport (NAIA) to Clark International Airport has been met with fierce resistance from the country’s tourism industry bodies.
“If the DOT [Philippine Department of Transport] really wishes to make a significant immediate impact in minimizing the congestion at NAIA, then it should consider other routes with really high flight volumes in the Visayas, such as Iloilo, Bacolod and Cebu with more than fifty plus flights per day combined,” the Philippine chamber of commerce argued. “Another option is to study the moving of more international flights to Clark instead of domestic flights." it said.
The DOT had intended to shift all flights to the Tacloban region to Clark. Tacloban is the main gateway to various tourism hotspots. The business chamber said such a move would result in increased land transportation, congestion, longer travel times and higher airfares, potentially causing a decline in visitor numbers.
Clark International Airport Corp. (CIAC) president and CEO, Emigdio P. Tanjuatco III, said carriers could launch flights “even by tomorrow” as the airfield only accommodates an average 16 flights a day, with no services scheduled every day from noon to 6pm.
