Fitch tags PAL outlook as ‘stable’
Philippine Airlines (PAL) has earned a stable outlook from Fitch Ratings, even as the debt watchdog expects the ongoing conflict in the Middle East to weigh on travel demand and pressure the flag carrier’s earnings this year.
In its first rating on PAL, Fitch assigned the airline a “BB” credit rating, meaning there is elevated vulnerability to default risk under adverse business or economic conditions, although the carrier retains sufficient financial flexibility to meet its financial obligations.
Fitch said the rating reflects PAL’s position as the Philippines’ flag carrier, its diversified route network, competitive cost structure and disciplined management following its Chapter 11 restructuring in 2021.
However, the London-based rating agency expects the airline to face near-term pressure from higher fuel costs and softer demand on routes affected by tensions in the Middle East.
Fitch noted that the Middle East accounted for about 8 percent of PAL’s revenue and 11 percent of its capacity in 2025, making the carrier vulnerable to disruptions in the region, particularly on price-sensitive routes.
“We believe the prolonged conflict will temporarily weaken travel demand,” Fitch said.
