Flag carrier Philippine Airlines (PAL) is expecting only a "very small growth" in passenger traffic this year with the ongoing financial crisis, its president said.
PAL President Jaime Bautista said the economic downturn has weakened the flag carrier's travel demand, making it difficult for the airline to recover from high fuel prices that hit the company's earnings in 2008. Bautista said, however, he is still hoping to achieve the same number of passengers that PAL had last year.
"On the passenger side, there might be a very small growth [in 2009] but we will be happy if we will be able to achieve the same number as eight million last year," Bautista told reporters on Wednesday.
PAL's rival company Cebu Pacific, meanwhile, showed improvement in domestic traffic despite the global financial crisis. It has retained its spot as the country's top domestic airline with a 45.6-percent market share in 2008 from the previous year's 42.9 percent.
Data from the Civil Aeronautics Board and the Civil Aviation Authority of the Philippines showed the budget airline flew 5.4 million domestic passengers last year, 500,000 more than the combined traffic of PAL and its low-fare carrier PAL Express. PAL, on the other hand, flew only 4.9 million domestic passengers.
Even with the financial crisis, Cebu Pacific increased its total number of domestic destinations and routes last year to 27 and 39 (from 20 and 28), respectively.
Meanwhile, Bautista said he is expecting PAL to post a net loss for the 2008-2009 fiscal year on costly fuel hedges and high oil prices. The company, whose fiscal year ends on March 31, incurred a net loss of $113.8 million for the first fiscal half ended September 30.
"We already reported a six-months' loss. For the third quarter we will lose again but hopefully in the last quarter we will be profitable or break even, that is our projection," he said, adding that PAL has not increased its fuel hedging since September. With Reuters