Officials from flag-carrier Philippine Airlines (PAL) and budget carriers Cebu Pacific and AirAsia Philippines said their respective companies are expecting a better performance in the fourth quarter following net losses recorded in the third quarter.
Philippine carriers see a silver lining in what has so far been a lackluster year as the peso recovers and fuel prices drop.
Officials from flag-carrier Philippine Airlines (PAL) and budget carriers Cebu Pacific and AirAsia Philippines said their respective companies are expecting a better performance in the fourth quarter following net losses recorded in the third quarter.
“We see the peso getting stronger and fuel prices declining in the fourth quarter, so that will definitely help our bottomline, not just ourselves, but also the other airlines,” said Alexander Lao, Cebu Pacific vice president for commercial planning.
“Hopefully we will be able to do something positive in the fourth quarter.”
Lao said the fourth quarter is traditionally better than the third quarter. “Third quarter is not a good season for the airlines” due to the seasonality factor, he said, noting that fuel price increases had aggravated the situation.
Cebu Air Inc., operator of Cebu Pacific, reported a US$9.8-million net loss in the third quarter. The decline was attributed to rising fuel prices and a weak peso.
For his part, PAL vice president Jose Perez De Tagle said the carrier is looking to further trim losses in the fourth quarter.
In the third quarter, PAL Holdings incurred a US$47.5-million net loss, lower than the US$55.8 million reported in the same period last year.
“We still see that the market is growing. Our revenues are increasing. Nonetheless, we still expect growth and we expect that to continue in the next few months,” Tagle said.
Budget carrier AirAsia Philippines is also looking to end the year with flat growth, but recovery is expected in the fourth quarter, CEO Dexter Comendador said.
“We will recover this fourth quarter. It would be a lot better because we expect the fuel to continue to go down or stay this low for the next year,” Comendador said.
AirAsia Philippines incurred net operating losses of US$28 million in the third quarter, due in large part to the closure of Boracay Island.
PAL and Cebu Pacific officials said the government’s move to allow airlines to impose fuel surcharge in domestic and international flights would help in their recovery as it would lessen the impact of soaring fuel costs in their operations.