ASEAN KEY DESTINATIONS
Philippine Airlines thinks profits
Bautista said the airline would rebound this fiscal year even after incurring a $14.4 million loss for its fiscal year ending March 2010.
"The airline industry is slowly recuperating, the economy is getting revitalized and the demand for air travel is gradually getting better," he said.
The executive however said the company has to surmount a lot of challenges before it can reach profitability.
Ianthe Aquino, PAL vice president of revenue management, said the company expects to generate between $1.5 billion and $1.6 billion in revenues for its fiscal year ending March 2011.
Last year, revenues reached $1.36 billion.
Aquino attributed the slight improvement to the higher load factor and yields for both domestic and international operations. In its first quarter ending June, PAL recorded a profit of $31.6 million, or 11 percent lower than last year.
Revenues went up by 30 percent to $426.7 million from $327.7 million last year.
A labor strike looms at the flag carrier, after PAL Employees Association (PALEA) and Flight Attendants' and Stewards' Association of the Philippines (FASAP) withdrew from mediations with the airline management. The labor unions turned down management's settlement offer as too small.
The Lucio Tan-owned airline plans to spin off its three non-core businesses. The affected units are in-flight catering services, airport services (including ground handling, cargo terminal/cargo handling, and ramp handling) and call center reservations. The cost-cutting exercise would lay off 3,000 employees.
PAL blamed its restructuring plan on the global recession, high fuel prices, the unabated liberalization of the domestic commercial aviation industry, and the blacklisting of Philippine carriers by the European Union.
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