Philippine Airlines reported higher earnings and revenue for the first quarter of 2026 but warned that escalating tensions in the Middle East could weigh on performance in the months ahead.

The Philippine flag carrier posted a net income of $78.55m, representing a 2.6 per cent increase compared to the same period last year, while total revenue rose 9.7 per cent to $78.55m, representing a 2.6 per cent increase compared to the same period last year, while total revenue rose 9.7 per cent to $895.70m.

Passenger revenue grew 8.7 per cent to $759.65m, driven by post-holiday travel demand and what the airline described as a resilient route network.

To meet rising demand, the airline increased its capacity, with available seat kilometres expanding 7.2 per cent and the number of flights operated rising 8.4 per cent.

Cargo operations also recorded strong performance, with revenue jumping 22.5 per cent to $43.21m, supported by improved yields amid tight global airfreight capacity, especially on routes affected by disruptions linked to the Middle East.

Ancillary revenue, which includes add-on services and personalised travel products, rose 11.2 per cent to $83.56m.

Operating profit stood at $101.85m as revenue growth outpaced rising costs. However, total operating expenses increased by 7.1 per cent to $101.85m as revenue growth outpaced rising costs. However, total operating expenses increased 7.1 per cent to $793.85m, with flying operations, the airline’s largest cost component, rising 9.2 per cent to $447.08m. The increase was attributed to higher flight activity, rising fuel prices tied to developments in the Middle East, and increased depreciation from fleet expansion.

The airline noted that the full impact of the Middle East crisis was not yet reflected in its first-quarter performance, as the situation escalated towards the end of the period, triggering fuel price volatility and disruptions across parts of the global aviation network.

The President of Philippine Airlines, Richard Nuttall, said the carrier had begun taking measures to safeguard its financial position.

“Our first quarter results reflect both the strength of demand for Philippine travel and the disciplined execution of our team,” Nuttall said. “However, these results only partially reflect the impact of the escalation in the Middle East late in the quarter, which has introduced volatility in fuel prices and disrupted parts of the global aviation network.”

He added, “We are actively managing our network and costs to protect margins and liquidity. While near-term headwinds remain, we are confident in the strength of our fundamentals and are taking prudent steps to sustain our momentum.”

The airline said it would continue to prioritise financial discipline and operational resilience amid uncertain global conditions. It added that strong operating cash flow generated during the quarter was deployed to fund capital expenditure, service debt, and strengthen its cash position in preparation for potential disruptions.