Listed aviation-support provider MacroAsia Corp., the aviation services arm of the Lucio Tan Group, reported a 12.4% year-on-year decline in attributable net income for the second quarter, falling to P320.55 million as operating expenses grew at a faster pace than revenue.

For the three months ended June, gross revenue rose 7.3% to P2.64 billion from P2.46 billion in the same period a year earlier. Expenses, however, climbed 12% to P2.61 billion from P2.33 billion, according to the company's quarterly results released on Wednesday.

The in-flight and catering segment generated the largest share of second-quarter revenue at P1.32 billion, followed by ground handling and aviation services at P1.09 billion. The water business contributed P194.11 million, while aviation training fees amounted to P23.36 million. Rental and administrative revenue reached P9.53 million, and connectivity and technology services contributed P397,429.

"MacroAsia continued to generate revenue growth across its key operating businesses during the first half of 2026, notwithstanding higher operating costs and the impact of lower associate earnings on first-half profitability," MacroAsia President and Chief Operating Officer Eduardo Luis T. Luy said in a statement.

For the January-to-June period, MacroAsia's attributable net income dropped 33.9% to P449.60 million from P679.69 million a year earlier, despite higher overall revenue. The steeper first-half decline relative to the second-quarter drop indicates that margin pressures intensified in earlier months. First-half gross revenue rose 9.4% to P5.26 billion from P4.81 billion.

During the first half, the in-flight and catering segment produced P2.63 billion in revenue, while ground handling and aviation services contributed P2.20 billion. The water business posted P369.03 million. Aviation training fees totaled P44.42 million, rental and administrative revenue reached P23.19 million, and connectivity and technology services contributed P397,429.

The company said growth in its food services business — the largest revenue contributor during the period — was driven primarily by higher meal volumes and the expansion of institutional and non-airline food services.

Ground handling and aviation services, which represented approximately 40% of total revenue, benefited from higher flight-handling volumes despite flight cancellations linked to the Middle East conflict. Philippine carriers including Philippine Airlines, a sister company under the Lucio Tan Group, serve routes to the Middle East that have been affected by regional airspace disruptions. The water business performance was attributed to higher billed water volumes amid continued expansion.

On the expense side, first-half costs for ground handling and aviation services increased 15.9% to P2.11 billion from P1.82 billion a year earlier. In-flight and catering segment expenses rose 12.4% to P1.82 billion from P1.62 billion. The faster growth in expenses relative to revenue underscores the cost-side pressure facing aviation service providers broadly, as inflation in labor, fuel-linked inputs, and airport-related charges continues to affect operating margins across the sector.

MacroAsia said it intends to focus on improving operating margins for the remainder of the year through customer rate adjustments, recovery of higher airport-related costs, improved supply-chain initiatives, and tighter oversight of manpower and operating expenses.

"The Group will continue to execute its diversification and growth initiatives across food services, aviation support, MRO, water infrastructure and shared services. Major projects will continue to be evaluated and funded with consideration for their expected operating cash flows, project timelines and the Group's overall leverage and liquidity position," the company said.

At the local bourse on Wednesday, MacroAsia shares closed unchanged at P3.81 apiece.

— Ashley Erika O. Jose