NEWSFLASH

PAL PROFIT RUN CONTINUES

Davao City, July 6, 2000 - Philippine Airlines president Avelino L. Zapanta announced yesterday that the flag carrier earned a record P392.7-million net income for the month of April 2000, another robust performance as PAL followed up its unprecedented turnaround last fiscal year.

Addressing business and civic leaders in Davao, Zapanta said the strong results for April showed that PAL's startling profit declaration for fiscal 1999-2000 was no fluke.

"Our consistency has not waned. We continue to perform above expectations and the market has responded in a big way. Our customers know a good product when they see one and right now they are flocking to PAL," Zapanta said.

PAL's rehabilitation plan has predicted a loss of P650.6 million for fiscal 1999-2000 but the airline outdid that by posting a net income of P44.2 million, its first positive bottom line in seven years.

The P392.7-million net income for April was the highest ever achieved by PAL in a single month in its 59-year history, easily surpassing the previous monthly high of P357.7 million recorded in December 1991.

"Our change programs under the rehabilitation plan have begun to transform PAL into a more efficient, service-oriented and market-driven company. This has given us a strong foundation on which to build PAL into a profitable, world-class airline," Zapanta said.

The PAL chief commended the flag carrier's 8,145-strong workforce for the impressive performance, singling out the sales and marketing, maintenance and engineering, and flight operations departments for their lead role in the effort.

"These units, ably supported by the rest of the PAL family, were at the forefront of our drive to draw more customers and provide them top-quality service. As the results show, our teamwork has paid off," he said.

Operating revenues reached P3.02 billion, with passenger revenue accounting for P2.52 billion of the total, as PAL accelerated its commercial thrust in April, traditionally a peak month for summer travel in the Philippines.

The success of PAL's marketing campaign was reflected in the operating statistics. The airline carried a total of 536,701 passengers on 1,649 roundtrip flights during the month.

More importantly, passenger load factor, the ratio of occupied to available seats on flights, reached a high of 81-percent systemwide. This meant that PAL operated flights at near capacity, indicating a more efficient scheduling and revenue-management system.

Cargo operations produced P323.8 million in revenue, while other transport activities, consisting of mail, excess baggage and charters, as well as non-transport activities such as catering services, contributed P171.7 million.

On the expenditure side, PAL continued implementing a regime of tight fiscal discipline. As a result, while some expense categories showed an increase, this was in measured proportion to the growth in traffic and revenue.

The major exceptions were fuel and maintenance, the two biggest items in PAL's operating expense base. Fuel expense for April 2000 was almost double the amount spent in the same month last year.

Jet fuel, in particular, was an uncontrollable expense as the PAL struggled to cope with the sharp rise in the price of fuel in the world market, which stood at $30 per equivalent barrel in April 2000.