MANILA — Philippine Airlines owned by Guam ambassador-at-large Lucio Tan said it might record a lower income for fiscal 2005 partly due to the looming avian flu menace.

This developed as the Philippine flag carrier said it will be leasing nine new Airbus 320s with the option to purchase the planes in a second stab at a refleeting program.

PAL relaunched its flights to Beijing on Nov. 11 even as it plans more flights to San Francisco and Los Angeles Cali. in the U.S. mainland. It is also considering flying to Seattle Wash.

Jaime Bautista president and chief operating officer at PAL said aside from the bird flu concerns rising costs of aviation gas due to higher crude oil prices may also affect the carrier’s finances. “The bird flu could reduce our ability to post a higher income ” he said. He spoke with reporters on Nov. 8 after updating the Securities and Exchange Commission of the progress of the carrier’s rehabilitation plan.

Like the SARS threat a few years ago he said people may be scared of flying to destinations where the bird flu virus has spread. But Bautista added that the second quarter of the fiscal year July to September is traditionally lean season for the airline and means lower revenues.

PAL reported an income of some $28 billion in the first quarter of fiscal 2006 which ends in March. This however already exceeded the $22 million net income posted in the last fiscal year.

Bautista said the carrier hopes to record the same income as last year.

World health experts have already sounded the alarm over the possible spread of the avian flu virus as infected birds have already been detected as far as Europe.

Primarily menacing Hong Kong mainland China Cambodia and Vietnam the avian flu virus Hn51 has also been found to have transferred to a number of humans 60 of whom have died.

Meanwhile Bautista said the carrier will lease nine Airbuses and will borrow an undetermined amount from foreign creditors if it chooses to purchase the planes. A new A320 costs about $65 million.

The A320 is called a new-generation plane and favored by many airlines for its fuel efficiency and modern design. It is used mostly for short-haul flights.

The purchase of nine new planes will be made over three years and will service domestic and international routes. PAL had to abort the refleeting and modernization program it announced in 1997 shortly after closing down due to a labor strike. The closure lasted for three months but the carrier posted massive losses subsequently and had to go into a 10-year rehabilitation program in 1999. The plan then was to buy some 40 new aircraft.

Bautista said that from 1999 to March 2005 PAL was able to cut its debt to $1 billion after having paid its creditors some $1.43 billion.

PAL has 31 planes for its short- and long-haul flights.

Despite the looming avian flu the carrier relaunched its flights to Beijing the capital of mainland China after an absence of 16 years (See “PAL relaunches Beijing flights ” on Page 13.).

PAL now flies to 43 destinations including Guam of which 18 are domestic. MBJ