NEWSFLASH

Manila, Aug. 22, 2000 - Increasing passenger load has pushed the net income of the country's flag carrier, Philippine Airlines (PAL), to rise by more than 1,000 percent to P793 million during the first quarter of its fiscal year from P65.3 million a year ago.

PAL said in a statement submitted to the Securities and Exchange Commission (SEC) yesterday that operating revenues for the April to June period rose by 432 percent to P9.3 billion from P6.5 billion, 84% of which came from passengers. The rest came from cargo, P999 million, and others P543 million.

The airline posted hefty gains during the period despite increases in fuel prices. PAL said fuel prices rose from an average of $0.55 per gallon to $0.84 per gallon.

The firm was able to reverse its financial position from continuously being in the red in the last seven years. The turnaround was a result of an aggressive company restructuring and rehabilitation program that includes reduction in fleet size, retrenchment of personnel, disposal of assets and inventories, among others.

The firm, controlled by tobacco and cigarette tycoon Lucio Tan, posted a net income of P44.2 million during the past fiscal year ending in March 2000, for the first time in seven years.

PAL has likewise shown steady balance sheet. Its assets rose to P101.177 billion as of end-June from P96 billion in end-March. The increase was due mainly to the increase in cash and cash equivalents, other current assets and property equipment due to effect of foreign exchange adjustments on dollar-denominated loans.

But its total liabilities went up by P4.4 billion to P97.005 billion from P92.606 billion due to increase in accrued expenses and unearned transportation revenues. Its total stockholders equity amounted to P4.171 billion, up P793 million from P3.3788 billion.

The debt-ridden company applied for a suspension of debt relied in June 1998. At that time, its total liabilities amounted to P85 billion, the bulk of which were owed from foreign creditors led by Chase Manhattan, HSBC Holdings Plc, Credit Lyonnais SA, Banque Nationale de Paris and Nissho Iwai Corp.

Its local creditors were Philippine National Bank, now majority-owned by Tan after he bought government's shares sold last month, Allied Bank (another Tan-controlled bank), PCI Bank, Security Bank, Land Bank of the Phils., United Coconut Planters Bank, and Equitable Bank.