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Philippine Airlines reported a 4% increase in revenue to US$2.50 billion in the first nine months of 2026, but incurred a net loss of $159 million due to the sharp rise in fuel expenses
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Fuel costs surged 49.8% to $1.02 billion, accounting for 39.6% of operating expenses, compared with 30.7% a year earlier
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Total operating expenses increased 15.9% to $2.57 billion
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Passenger revenue rose 1.9% to $2.08 billion, while ancillary revenue increased 6% to $235.1 million
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Passenger traffic declined 6% to 11.6 million, while the passenger load factor eased to 77.5% from 79.4%
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Cargo revenue climbed 34.8% to $158.5 million, supported by higher freight rates and a 2.9% increase in volume
Philippine Airlines (PAL) reported a 4% increase in revenue to US$2.50 billion in the first nine months of 2026, but incurred a net loss of $159 million as a sharp increase in fuel expenses weighed on its financial performance.
The flag carrier’s revenue rose from $2.40 billion in the same period last year, supported by higher passenger yields and stronger cargo revenue. However, net results reversed from a net income of $158.7 million in the first nine months of 2025.
PAL attributed the loss mainly to a $339.4-million increase in fuel expenses, driven by the continuing conflict in the Middle East.
READ: PAL books $25M net loss in H1 on higher fuel cost
“Our nine-month results demonstrate the underlying resilience of Philippine Airlines in an operating environment marked by exceptionally high fuel costs and continuing geopolitical uncertainty. We have responded with disciplined capacity deployment, stronger revenue management, targeted commercial initiatives and tight control of controllable costs,” PAL president Richard Nuttall said in press statement.
“While the sharp increase in fuel prices has weighed significantly on profitability, demand for travel remains healthy and our revenue performance shows that our commercial strategy is gaining traction. We remain focused on protecting liquidity, strengthening the business and positioning PAL for a return to stronger profitability as operating conditions normalize,” he added.
Fuel expenses increased 49.8% to $1.02 billion, accounting for 39.6% of operating expenses, up from 30.7% a year earlier. Average jet fuel prices climbed 52.7% to $152.72 per barrel.
Total operating expenses rose 15.9% to $2.57 billion during the period. Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at $290.6 million, with an EBITDA margin of 11.6%.
Passenger revenue increased 1.9% to $2.08 billion despite a 6% decline in passenger volume to 11.6 million. The airline’s passenger load factor also eased to 77.5% from 79.4% a year earlier.
Ancillary revenue, which includes services such as premium seat upgrades and prepaid baggage, grew 6% to $235.1 million.
Strong cargo performance
Cargo provided a stronger revenue contribution, with earnings from the business climbing 34.8% to $158.5 million on higher freight rates and a 2.9% increase in freight volume.
To manage rising fuel expenses, PAL adjusted fares and fuel surcharges, reduced flights on selected routes and maintained controls over other operating costs. The airline expects fuel prices to remain the main factor affecting its financial results for the remainder of the year.
Despite the net loss, PAL reported free cash flow of $247 million for the nine-month period.
Cash and short-term investments reached $879 million as of September 30, more than double the $431 million recorded at the end of 2025. The airline said its liquidity position was supported partly by the issuance of $350 million in five-year notes in July and August, alongside aircraft financing and other funding facilities.
READ: PAL raises another $50M after initial $300M international bond offer
PAL also continued its fleet expansion, adding three Airbus A350-1000s and two Airbus A320s during the year. The additions brought its operating fleet to 86 aircraft from 79.
READ: PAL utilizes A350-1000 for Manila-San Francisco daily flights
At the Farnborough International Airshow in July, the airline signed memoranda of understanding to acquire up to 20 Boeing 787-10 Dreamliners and up to 14 additional Airbus A350-1000s.
Meanwhile, PAL Express took over the airline’s line maintenance operations from Lufthansa Technik Philippines starting August 1, a move expected to improve operational reliability and cost efficiency.
PAL was also invited to join the oneworld alliance in June and is expected to become its 16th member once integration is completed.
