PAL allots $450M for capital expenditures in 2024

Philippine Airlines (PAL) is allotting $450 million for its capital expenditures (capex) this year to bankroll its fleet expansion and digitalization initiatives.

At a press conference in Manila on Tuesday, PAL chief financial officer Anna Isabel Bengzon said “about 80%” of the flag carrier’s 2024 capex will be spent on aircraft refurbishment, maintenance, upgrades, and payments for delivery.

The airline is investing in nine A350-1000 aircraft for its non-stop flights to North America and other international destinations.

PAL is also adding 13 A321neo planes to serve its regional routes to Asia and Australia.

The carrier will also reconfigure its 18 existing A321neo aircraft to add more legroom for business class, seat-back in-flight entertainment, and wifi on board.

PAL’s 2024 capex is higher than last year’s spending budget of $170 million, according to Bengzon.

For the airline’s digital transformation, she said that PAL is spending roughly 10% of its capex this year.

PAL saw a 92% net income growth last year to $379 million from $197 million in 2022, while revenues grew by 37% to $2.9 billion from $2.1 billion. 

Bengzon said PAL expects “normal growth” in 2024, as it focuses on fleet improvements and expansion.

She said the revenue growth target was “high single digits.''

“It’s a more normal growth,” she said.

PAL emerged from its voluntary Chapter 11 bankruptcy proceedings, which allowed the firm to reorganize its debts while staying in operation.

Its reorganization plan, approved by the US restructuring court in December 2021, provided for over $2 billion in permanent balance sheet reductions from existing creditors, improvements in its critical operational agreements, and additional liquidity, including a $505-million investment in long-term equity and debt financing from PAL’s majority shareholder. — VBL, GMA Integrated News