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carrier, Philippine Airlines (PAL), said its net profit
for the first quarter ending June this year will most
likely be dampened by the surge in fuel cost.
Its
president Jaime Bautista, in an interview Friday, said
his expectation is there will be a reduction in net
profit but revenues will remain steady.
“The
real challenge for us is our bottomline because of the
increase in fuel prices,” he said without providing any
figures. PAL, which fiscal year ends every March, posted
a net profit of $34.5 million and sales of $373.4
million in the first quarter of 2007.
Bautista
said PAL had pegged 2008 aviation fuel at a price of
$110 a barrel. At present, aviation gas is at $140 per
barrel. Jet fuel purchases represent 35 percent of the
company’s operating expenses.
Just
like other firms, the Lucio Tan-controlled airline
company is also “tightening its belt” and has stopped
hiring new personnel. However, Bautista was quick to add
that they will not be reducing current manpower and has
no plans of grounding aircraft.
“In
fact, we just took delivery of A-320 plane and another
one will be coming in next month to beef up our domestic
and regional flights,” he said.
Last
May, PAL set up a low-cost unit, PAL Express, to operate
its fleet of turbo-propeller aircraft, a segment which
it expects will add about P300 million to profits
annually.
PAL
Express is expected to carry around one million
passengers each year. It will acquire the operations of
PAL affiliate, Air Philippines.
“PAL
Express is a separate unit of PAL that will not directly
compete with Air Philippines because PAL Express will be
mostly present in areas where Air Philippines is not,”
Bautista said.
PAL is
85 percent-owned by listed company PAL Holdings Inc.
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