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Philippine Airlines reported a net loss of US$25.1 million for the first half of the year from a net income of $136.7 million in the same period last year, caused by higher fuel expenses as a result of the Middle East conflict
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Revenue for January to June 2026 grew 5.9% to $1.746 billion from $1.648 billion, supported by higher passenger yields and stronger cargo revenue
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Passenger and cargo revenues increased by 4.5% to $1.47 billion and 30% to $98.2 million respectively, supported by fare and freight rate adjustments
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Fuel cost increased 48.2% year-on-year to $674.5 million, rising to 39.2% of operating expenses from 30.3% a year earlier
Philippine Airlines (PAL) reported a net loss of US$25.1 million for the first half of the year from a net income of $136.7 million in the same period last year, caused by higher fuel expenses as a result of the Middle East conflict.
Revenue for January to June 2026 grew 5.9% to $1.746 billion from $1.648 billion, supported by higher passenger yields and stronger cargo revenue, the flag carrier said in a statement.
Passenger and cargo revenues increased by 4.5% to $1.47 billion and 30% to $98.2 million respectively, supported by fare and freight rate adjustments. Ancillary revenues continued to expand through increased uptake of travel-related products and services.
Total passengers carried during the first six months of the year, however, declined 3.1% year-on-year to 8.2 million, while load factor eased to 78.9% from 81.6% a year earlier.
Fuel cost increased 48.2% year-on-year to $674.5 million, rising to 39.2% of operating expenses from 30.3% a year earlier. Non-fuel costs, meanwhile, remained well contained, increasing by only 4.1% year-on-year.
Free cash flow was positive at $135 million, with capital expenditures totaling $153 million.
READ: PAL Q1 2026 net income grew 2.6%
For the second quarter alone, PAL recorded a net loss of $103.6 million from a net income of $60.2 million in the same quarter last year, as fuel costs increased 88.2% year-on-year to $422.9 million.
To mitigate the impact of elevated fuel prices, PAL said it implemented schedule adjustments on selected domestic, Middle East, and regional routes while maintaining a largely stable long-haul international network.
Available seat kilometers remained flat at 22.8 billion, while unit costs excluding fuel were kept under control, reflecting the airline’s continued emphasis on operational efficiency and expense management.
During the first half and in July of 2026, PAL said it continued to advance key strategic initiatives aimed at strengthening its global competitiveness and enhancing customer experience.
Notable developments included the entry into service of the airline’s second Airbus A350-1000 in May 2026, and deployment of the new flagship aircraft on key long-haul routes, including New York, Toronto, and San Francisco. The carrier also expanded its Mabuhay Miles loyalty program through partnerships with Qantas Airways and Qatar Airways, and commenced integration activities related to PAL’s planned entry into the oneworld® alliance.
Moreover, the airline announced orders of up to 20 Boeing 787-10s and up to 14 Airbus A350-1000s and their respective GE Aerospace GEnx-1B and Rolls-Royce Trent XWB-97 engines to be delivered between 2031 to 2036. PAL also reported its successful entry into the debt capital markets through a $350 million five-year notes issuance, enhancing financial flexibility and supporting future growth initiatives.
READ: PAL raises another $50M after initial $300M international bond offer
PAL noted that the ongoing Middle East conflict remains the key variable for PAL’s second-half 2026 outlook, given its impact on fuel prices, inflation, and travel demand.
The airline said international demand continued to be robust, while domestic demand has been more affected by higher fares, although domestic operations remain profitable.
“The Middle East conflict has created significant near-term pressure on our fuel costs, and our second-quarter results reflect that impact,” PAL president Richard Nuttall said, while also noting that the carrier’s first-half performance “demonstrates PAL’s underlying resilience.”
“We moved quickly on fare and network adjustments, protected our liquidity, and continued investing in the fleet and partnerships that will strengthen our long-term competitiveness. International demand remains strong, our cost discipline is holding, and we enter the second half with the flexibility to manage through this disruption while staying focused on our strategic plan,” Nuttall said.
