Philippine Airlines said Thursday it expects earnings to fall this year following the declaration of martial law in Mindanao and the excess capacity in the Middle Eastern market.
“For sure there will be an effect, it will result to a reduction in revenue, but we are hoping that this is the solution to the long term problem,” PAL president and chief operating officer Jaime Bautista told reporters.
“So we want to look at it on a more positive basis that we have this problem now, but when the peace and order stabilized in Mindanao, there will be more people traveling in Mindanao,” Bautista said.
Bautista confirmed the cancellation of flights, rebooking and fare refund because of the declaration of martial law in Mindanao to suppress violence and restore order in Marawi City.
“If there are issues like this, there are many passengers who tried to defer their travel. We are now experiencing some cancellations but not that much,” he said.
Bautista said the airline was looking at restructuring some flights in Mindanao because of the proposed curfew in the region.
He said the overcapacity in the Middle East also forced PAL to suspend Manila to Abu Dhabi flights.
“We will carefully evaluate existing capacity [in the Middle East] but we are hoping that the market will continue to grow in the international,” Bautista said.
Bautista said air ticket prices could increase if jet fuel price continued to rise.
PAL is taking delivery of seven brand new aircraft worth over $550 million within the second half of the year as a part of its fleet expansion and modernization program.
The airline led by tycoon Lucio Tan expects delivery of two Boeing 777-300 ER in December and five next-generation Bombardier Q400 in July to November.
The twin-engine A350-900 will become PAL’s new flagship aircraft.
PAL ordered six A350s, with an option for six more. The aircraft is capable of flying non-stop from Manila to New York.
The additional B777-300 ERs will be deployed to the London and North American routes.
PAL’s parent firm PAL Holdings Inc. earlier posted a total net loss of P904.7 million in the first quarter, a downturn from P2.71-billion income last year.