MacroAsia sees weak earnings this year
MANILA, Philippines - In-flight services provider MacroAsia Corp. of the Lucio Tan Group of Companies expects its earnings to continue to soften this year as the deepening crises in Europe and the US, as well as surging fuel prices put a squeeze on its margins.
In a briefing following the company’s annual stockholders meeting Friday, MacroAsia president and chief executive officer Joseph Chua said the company foresees another tough year with net earnings seen declining to P246 million from P306.62 million in 2011.
“Players like us in the aviation industry assess 2012 with trepidation and much uncertainty as we face the full-impact of rising fuel prices, growing international debt crisis, continuing Middle East peace woes, weakening US dollars, and other factors that weigh down on aviation travel and profitability,” Chua said.
The International Air Transport Association (IATA) has forecast that airlines would continue to perform poorly this year, generating profits of only $3.5 billion or a sharp drop from the estimated $6.9 billion in 2011.
Jet fuel is the biggest expense for airlines, accounting for roughly 35 to 40 percent of operating costs.
Chua said affiliate Lufthansa Technik Philippines Inc.’s A380 hangar project at the NInoy Aquino International Airport would be a source of revenue growth only in the medium-term since it would take time to develop this.
The new hangar, costing some $30 million, would expand LTP’s capability to service the Airbus family of aircrafts to include the biggest aircraft in the world –A380s.
Once operational, the new hangar is expected to result in increased service revenues for LTP.
LTP is also seen to benefit from the expected delivery of 350 airlines for Asia Pacific airlines over the next three years, 100 of which are wide-bodies.
Chua, however, expects the company to bounce back next year, hitting a net income of more than P300 million.
He expects unit MacroAsia Catering Services Inc. to surpass its 2011 operating performance as it sees continued dominance in the in-flight catering business in the country.