According to a press release from PAL Holdings, Inc. (PSE: PAL) dated August 13, 2026, Philippine Airlines (PAL) faced challenges in the first half of 2026 even though it earned more money from passengers and cargo.
What Happened to Philippine Airlines?
Think of it this way: Imagine you have a lemonade stand. You sold more lemonade this year and charged a bit more per cup, which is great! But at the same time, the lemons suddenly became much, much more expensive because of problems at the store where you buy them. Even though you sold more lemonade, you ended up losing money because the lemons cost so much more.
That’s essentially what happened to Philippine Airlines. The airline earned more money (called revenue) – about US$1.746 billion, which is 5.9% more than the same period last year. However, the cost of fuel (like airplane gasoline) went up dramatically by US$219.5 million because of a conflict happening in the Middle East. This huge jump in fuel costs caused PAL to lose US$25.1 million instead of making a profit.
Comparing This Year to Last Year
In the first half of 2025, Philippine Airlines actually made a profit of US$136.7 million. But in the first half of 2026, they lost US$25.1 million. The main reason? Fuel costs jumped up by 48.2%, reaching US$674.5 million.
To put it simply, fuel went from being 30.3% of their operating expenses to 39.2% – that’s a really big increase!
The Good News
Despite these challenges, PAL showed some strength:
- They kept their non-fuel costs under control, increasing by only 4.1%
- Their cash balance remained stable at US$456.3 million as of June 30, 2026
- They had positive free cash flow of US$135 million
- Cargo revenue grew strongly by 30% to US$98.2 million
- Passenger revenue increased by 4.5% to US$1.47 billion
How Did PAL Respond?
When fuel prices went up, PAL didn’t just sit around. They made some smart adjustments:
- They adjusted flight schedules on certain domestic and Middle East routes
- They raised ticket prices to help cover the higher fuel costs
- They kept their main international flights running
- They controlled other expenses very carefully
Passenger Numbers
PAL carried 8.2 million passengers in the first six months of 2026, which is 3.1% less than the same period in 2025. The load factor (which means how full the planes are) decreased to 78.9% from 81.6% the previous year.
Investing in the Future
Despite the financial challenges, PAL continued to invest in improvements:
- They added a second Airbus A350-1000 aircraft in May 2026
- They’re using these new planes on important routes to New York, Toronto, and San Francisco
- They expanded their Mabuhay Miles loyalty program by partnering with Qantas Airways and Qatar Airways
- They’re preparing to join the oneworld® alliance, a global airline partnership
- They raised US$350 million by selling bonds to investors
- They ordered up to 20 Boeing 787-10s and up to 14 Airbus A350-1000s to be delivered between 2031 and 2036
What’s Next?
According to Richard Nuttall, President of Philippine Airlines, the conflict in the Middle East remains the biggest factor affecting their business because it impacts fuel prices. He noted that international travel demand is still strong, but domestic travel has been affected by higher ticket prices, though domestic flights are still profitable.
About PAL Holdings, Inc.
PAL Holdings, Inc. is the parent company of Philippine Airlines, the flag carrier of the Philippines. The company is publicly listed on the Philippine Stock Exchange under the ticker symbol PAL. As of the filing, PAL Holdings has 26,852,106,890 common shares outstanding.
Philippine Airlines was founded in 1941, making it Asia’s first commercial airline. Today, it flies to 29 destinations within the Philippines and 40 international destinations across Asia, North America, Australia, and the Middle East.
Source Note:This article is based on the company’s official press release and disclosures filed with the Philippine Stock Exchange’s Electronic Disclosure Generation Technology (PSE EDGE) system. For the complete and official version of the announcement, readers may visit the PSE EDGE website and search for the company’s filing directly.
