Cebu Pacific earnings plunge 19% to P7.9 B

MANILA, Philippines — The operator of Cebu Pacific and Cebgo saw net earnings decline by 18.9 percent in 2017 from a year ago amid higher expenses due to the increase in fuel prices and a weaker peso.

In a filing with the Philippine Stock Exchange, Cebu Air Inc. said its net income reached P7.91 billion last year, down from the P9.75 billion earned in 2016.

The group generated revenues of P68.03 billion, up by 9.9 percent year-on-year.

Passenger revenues grew 7.2 percent to P49.93 billion due to the increase in passenger volume.

Last year, the group carried 19.7 million passengers, 3.2 percent higher than the previous year as the number of flights increased by 3.6 percent.

Cargo revenues also went up 29.2 percent to P4.6 billion last year following the increase in the cargo volume and yield.

Ancillary revenues likewise climbed 14.9 percent to P13.49 billion as a result of improved online bookings, pricing adjustments and introduction of new ancillary revenue products and services.

While revenues of the group rose year-on-year, operating expenses likewise increased 16.6 percent to P57.9 billion. 

“The increase was primarily due to the rise in fuel prices in 2017 coupled with the weakening of the Philippine peso against the US dollar as referenced by the depreciation of the Philippine Peso to an average of P50.40 per US dollar for the year ended Dec. 31, 2017 from an average of P47.50 per US dollar last year based on the Philippine Dealing and Exchange Corp. weighted average rates,” Cebu Air said.

It added the growth in the airline’s seat capacity from the acquisition of new aircraft also contributed to the increase in expenses.

As of the end of 2017, Cebu Air had 61 aircraft on its fleet for its flights, up from 57 a year ago.

The fleet is composed of one Airbus A319, 36 Airbus A320s, eight ATR 72-500s, eight ATR 72-600s and eight Airbus A330s.

Last year, the group served 76 domestic routes and 37 international routes with a total of 2,485 scheduled weekly flights.