Cebu Pacific sees share in air travel market rising to 60%

MANILA, Philippines —  Low-cost carrier Cebu Pacific looks to close the year holding 60 percent of the domestic market, unshaken by the 33 percent reduction in its profit in the nine months to September.

Cebu Pacific’s parent Cebu Air Inc. said its net income declined to P3.37 billion as of September, from P5.03 billion a year ago, on the double whammy of spiking costs and a weak peso.

Although revenue grew by 11 percent to P74.53 billion, expenses also climbed by 13 percent to P68.84 billion, as almost every expenditure became higher for Cebu Pacific.

For instance, Cebu Pacific’s flying cost increased by 12 percent to P28.71 billion, as the airline invested more to sustain its larger business. The peso has also traded above 57 to $1 recently, and this is hurting the carrier given that at least 60 percent of its expenses are paid in dollars.

In spite of this, Cebu Pacific chief finance officer Mark Julius Cezar said the airline has nothing to worry about, confident that the decline in net income is just temporary. Cebu Pacific expects to end 2024 flying three in every five passengers traveling locally.

To date, Cebu Pacific has flown 17.5 million guests, up by 13 percent from a year ago, turning in a load factor of 84.9 percent.

Earlier, the airline owned by the Gokongweis has ramped up its flight coverage in Cebu, Clark, Davao and Iloilo, on top of upgrading its Manila services to bigger aircraft.

Further, the carrier acquired boutique airline AirSWIFT Transport Inc. from the Zobels for P1.75 billion, resulting in the expansion of its turboprop fleet and the addition of El Nido to its reach.

“Cebu Pacific has the unique opportunity to grow when others cannot. So, despite the short-term impact to margin development, we will be growing rapidly, creating a robust network across the Philippines to expand and strengthen our market presence,” Cezar said.

“We expect to reach a domestic market share of nearly 60 percent by the fourth quarter, from 52 percent before the pandemic. Airport and aircraft investments open a significant market potential for Cebu Pacific, and these initiatives also allow us to take advantage, as well as contribute to the overall Philippine growth story,” he added.

In October, Cebu Pacific placed a firm order of 152 aircraft with Airbus, valued at $24 billion, or around P1.4 trillion, marking the largest plane order in Philippine aviation.