By Ashley Erika O. Jose, Reporter
LISTED airline corporations are expected to deliver mixed results for 2024, primarily as a result of the anticipated recovery within the sector, which could also be counterbalanced by the volatility of the airline industry, in response to analysts.
“Numerous aspects influenced profitability, equivalent to fuel costs, passengers, and competition. The third quarter is traditionally the weakest due to the typhoons and off-peak season. Hopefully, the fourth quarter sees a turnaround,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message on Sunday.
For the third quarter, each listed airlines saw their third-quarter attributable net income decline. Cebu Air, Inc., the operator of Cebu Pacific, incurred an attributable net lack of P173.19 million from an attributable net income of P1.28 billion in the identical period last 12 months as higher expenses put pressure on the corporate’s profit for the period.
PAL Holdings, Inc. saw its third-quarter attributable net income plunge to P789.79 million, greater than fivefold lower than last 12 months’s P4.28 billion as a result of lower passenger revenue in the course of the period.
“The primary nine months for each airlines showed a mixed picture. Each experienced fluctuations of their quarterly revenues,” First Grade Finance, Inc. Managing Director Astro C. del Castillo said in a Viber message.
The outlook stays cautiously optimistic for airline corporations because the industry continues to face rising operating costs, increased competition, and fragile economic conditions, Mr. Del Castillo said.
“The general profitability of PAL and CEB will depend upon how effectively they’ll manage these dynamics as they navigate through the ultimate months of the 12 months,” he said.
For the flag carrier, PAL President and Chief Operating Officer Stanley K. Ng said the corporate is expecting to finish the 12 months with lower profit than last 12 months.
“Definitely lower than last 12 months,” he told reporters on the sidelines of an event last week.
For December, air passengers may even see regular airfares after the Civil Aeronautics Board kept the fuel surcharge for December unchanged at Level 4, marking the third time this 12 months the fuel surcharge was set at this level.
Air passenger volume on the Ninoy Aquino International Airport continues to extend for the primary nine months of the 12 months after surpassing pre-pandemic levels, driven by growth in domestic travel, in response to the Manila International Airport Authority (MIAA).
Data from MIAA showed that air passenger volume totaled 37.38 million for the nine months ending September, 10.7% higher than the 33.75 million within the comparable period last 12 months and 4.2% higher than the 35.87 million within the January-to-September period in 2019.
For Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce, the profitability of airlines will probably be influenced by many aspects.
He said the potential drivers for growth will probably be the vacation and peak travel seasons and the expected recovery in tourism.
“Any rebound in local and international travel demand can contribute significantly to earnings. Effective fuel-hedging strategies and operational efficiency improvements could offset revenue dips,” he said.
Cebu Pacific, the budget carrier, is optimistic about its growth prospects for next 12 months. The corporate anticipates that its recent route launches will begin to contribute positively, driven by its ongoing expansion plans.
“We’re quite positive for next 12 months. We expect the peak of the leverage, the early investments within the aircraft are already done. It has made our capex (capital expenditure) heavy this 12 months, but that is it, by next 12 months, we are going to feel the contributions of those because the revenue grows,” Cebu Pacific Vice-President for Controllership and Investor Relations Trina E. Asuncion said in a virtual briefing last week.
