ANDREW DOYLE / MANILA
Philippine Airlines (PAL) expects to salvage a small operating profit for the financial year to the end of March amid the first signs of an upturn in passenger traffic.
Despite "concrete signs of improvement" the flag carrier is nevertheless reeling from losses of 2.1 billion pesos ($41 million) incurred during the three months following 11 September and the "evaporation" of business class traffic, PAL president and chief operating officer Avelino Zapanta says.
The airline has revised its forecasts for the current financial year, to a net loss of 1.7-1.8 billion pesos, down from its October prediction of a 2.7 billion pesos deficit.
PAL, which remains in receivership following its 1998 bankruptcy, has suffered less than some of its Asian rivals. However, despite managing to stay profitable, the carrier is still saddled with substantial debts. It also continues to suffer from the loss of tourists.
The events of 11 September delayed PAL majority-owner Lucio Tan's ambitions to launch an initial public offering as the company had been on the verge of delivering the three consecutive years of profits required by the Philippine stock exchange. As a result the sell-off cannot take place for at least three years.
PAL hopes shortly to conclude a lease deal for a fifth Boeing 747-400 to enter service in the fourth quarter. This will be used to offset capacity lost as the airline's four Airbus A340-300s and eight A330-300s are sequentially withdrawn for maintenance checks.
Meanwhile, PAL has asked the Philippines government to delay "open skies" with the USA - originally due for late next year - by "at least 10 years" because Zapanta feels the airline could not cope with the competition.
Source: Flight International
