PAL profit slips in Q1, braces for tougher Q2

April 29, 2026 | 12:00am

MANILA, Philippines — Flag carrier Philippine Airlines (PAL) felt the impact of rising operational costs in the first quarter, and is bracing for tougher results as jet fuel prices become a problem.

PAL’s parent PAL Holdings Inc. yesterday said its net income slipped by one percent to P4.28 billion in the first quarter, from P4.33 billion a year ago.

Revenue also rose by 12 percent to P52.43 billion, as PAL registered an across-the-board growth from its business units.

PAL’s passenger revenues climbed by 11 percent to P44.85 billion, with the airline carrying 4.3 million guests in the first quarter. The airline attributed the growth to post-holiday demand, as it matched the seven-percent increase in seat capacity.

Further, PAL drew a 25-percent improvement in cargo revenues to $2.55 billion, although it has become harder to airlift goods since geopolitical tensions in the Middle East reignited in March. PAL’s ancillary revenues also ballooned by 13 percent to P4.93 billion, as travelers procured seat upgrades and value-added services.

PAL president Richard Nuttall said the airline is starting to feel the pinch of bloating prices of jet fuel, forcing it to suspend a handful of flights to reduce consumption.

This can be seen in PAL’s expenses escalating by nine percent to P46.07 billion between January and March, partly to pay for higher activities.

However, the bigger part of the spending covered the late-quarter increase in petroleum prices, as PAL’s flying operations went up by 11 percent to P24.21 billion.

“Our first quarter results reflect both the strength of demand for Philippine travel and disciplined execution of our team. However, these results only partially reflect the impact of the escalation in the Middle East late into the quarter, which has introduced volatility in fuel prices and disrupted parts of the global aviation network,” Nuttall said.

As jet fuel prices begin to bite, Nuttall said PAL is rearranging its flight network and operational expenses to preserve profitability. He is optimistic the airline would come out of this crisis in one piece.

“While near-term headwinds remain, we’re confident in the strength of our fundamentals and are taking prudent steps to sustain our momentum,” Nuttall said.

According to the International Air Transport Association, jet fuel prices have declined by three percent to $179.46 per barrel as of April 24, still far from the pre-crisis rate of less than $100.