The current worldwide recession and highly volatile fuel prices, especially during the second half of 2008, took its toll on major international carriers, including flag carrier Philippine Airlines.

PAL, in a filing with the Securities and Exchange Commission, reported yesterday a huge loss of $219.86 million for the period October to December 2008, including actual and mark-to-market losses from fuel hedging contracts.

As part of risk management policies, most of the world?s airlines, including PAL, entered into contracts that locked in the price of a portion of their future fuel requirements to cushion the impact of price increases. But the airlines incurred losses when fuel prices fell steeply due to the global economic slowdown.

Revenues in the third quarter ending December increased 15 percent to $405.90 million despite the worldwide recession. Passenger demand remained robust as PAL carried 2.34 million passengers during the same period, up 24 percent year-on-year.

Passenger load factor stood at 74 percent with the continued patronage of migrant Filipino workers and the balikbayan traffic. PAL carried a total of 6.5-million passengers in the first nine months of its fiscal year, up 16 percent on year.

Total expenses in the third quarter rose 58 percent on year to $586.96 million. Fuel continued to be the company?s top operating expense but PAL succeeded in controlling other expenses and keeping them in check.