PAL reports surge in net profit to $17.6m

PAL reports surge in net profit to $17.6m

MANILA (Reuters): Unlisted Philippine Airlines (PAL) posted a net profit of 792.96 million pesos (US$17.6 million) for the April-June quarter, up 12-fold from 65.4 million pesos in the same period a year earlier, according to unaudited results released on Monday.

Revenue totaled 9.3 billion pesos, up 43 percent from 6.5 billion pesos a year earlier. Passenger revenue accounted for 83 percent of the total.

April-June is the first quarter of the company's business year which ends in March.

PAL, the national flag carrier now majority owned by businessman Lucio Tan, posted a profit of 44.2 million pesos for the past year to March, its first profit in seven years.

PAL last year started a 10-year restructuring program to enable it to repay debt totaling $2.2 billion. The restructuring plan called for reduced routes, the sale of non-performing assets and the spin-off of other businesses such as airline catering and engineering services.

The airline incurred net financing charges of 1.2 billion pesos in the April-June quarter, up 45 percent from 844.87 million pesos in the same period a year earlier, mainly due to higher interest charges.

A large proportion of PAL's debt represents money borrowed to upgrade and expand the airline's fleet of planes before the Asian crisis struck in 1997. The airline came close to shutting down because of the debt overhang and labor problems.