Cebu Air profit soars 138% to P3.4 billion in Q1

MANILA, Philippines — Cebu Air Inc., the operator of budget carrier Cebu Pacific, reported a 138 percent hike in its net income in the first three months of the year, fueled by higher revenues.

In a financial report to the Philippine Stock Exchange, Cebu Air said its net income in three months to March soared  to P3.4 billion from P1.44 billion in the same period last year.

Revenues during the period jumped 16 percent to P21.18 billion from P18.26 billion generated in the same period a year ago.

Passenger revenues accounted for bulk of the revenues as it reached P15.7 billion, a 14.6 percent increase from P12.7 billion posted last year.

“This increase was mainly attributable to the 8.5 percent growth in passenger volume to 5.289 million from 4.876 million last year as the group added bigger A321 aircraft to its fleet,” Cebu Air said.

It added that the increase in average fares during the period by 5.7 percent to P2,965 from P2,805 also contributed to the increase in revenues.

Meanwhile, revenues from the company’s cargo business also grew 12.7 percent to P1.4 billion from P1.28 billion due to the increase in both yield and volume of cargo transported.

Ancillary revenues similarly increased by 22.7 percent to P4.1 billion from P3.31 billion, attributable to the increase in average ancillary revenue per passenger by 13.1 percent from pricing adjustments and increased volume of certain ancillary products and services.

Total expenses in the period reached P17.3 billion, higher than the P16 billion posted in the same period a year ago.

In 2018, Cebu Air posted a 50.6 percent decline in net income to P3.9 billion due to a number of factors such as high fuel prices, volatile peso, rising interest rates, increased competition, the six-month closure of Boracay, and operational limitations in the country’s key airports.

“Despite the pressures posed in 2018, we remained resilient. We were able to expand our network by upgauging our flights touching congested airports,” Cebu Air chief operations officer Michael Ivan Shau said.

“2019 will be a different story though – we have already received the first of our fuel-efficient A321neo orders from Airbus, and we expect 10 more new generation aircraft this year. We also just announced four new domestic routes. 2019 is definitely the year we accelerate our growth,” he added.

Shau said Cebu Pacific would continue to pursue its fleet upgauging strategy and invest in the latest aircraft technologies, as well as develop secondary hubs like Cebu and Clark this year. 

He added that the carrier would also continue to grow its cargo business with the incoming ATR freighters and pursue its digital transformation to better adapt to changing customer expectations.

As of March 31, 2019, the group operates a fleet of 70 aircraft which comprises of 34 A320, seven A321ceo, an A321neo, eight A330, eight ATR 72-500 and 12 ATR 72-600. It operates its Airbus aircraft on both domestic and international routes and operates the ATR 72-500 and ATR 72-600 aircraft on domestic routes, including destinations with runway limitations. 

The airlines currently operates an extensive route network serving 68 domestic routes and 38 international routes with a total of 2,733 scheduled weekly flights.