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.