CebuPac income down 50.6% to P3.9 B in 2018

MANILA, Philippines — Cebu Air Inc., the operator of low cost carrier Cebu Pacific, saw its earnings plunge for a second consecutive year despite higher revenues on the back of a challenging environment in 2018.

Cebu Air said “challenging macro environment” left the company’s net income at P3.9 billion last year, down by 50.6 percent from the previous year’s reported net income of P7.9 billion.

These challenges include high fuel prices, volatile Philippine peso, rising interest rates, increased competition, the six-month closure of Boracay, and operational limitations in the country’s key airports. 

However, the listed firm managed to finish the year with strong revenues of P74.1 billion, up nine percent from P68.03 billion the previous year because of continued demand for air travel and robust growth of its cargo business. 

Revenue growth was driven by sustained increase in passenger revenue, which was up nine percent year-on-year at P54.3 billion.

Cargo, on the other hand, posted year-on-year revenue growth of 19 percent as the business carried 210 million kilos of cargo.

Cebu Pacific flew a total of 20.3 million passengers in 2018, 2.7 percent more year-on-year. 

On average, Cebu Pacific flights were 85 percent full during the year, with the carrier mounting 390 flights daily.

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

“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 group 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.  

Cebu Pacific currently offers flights to a total of 37 domestic and 26 international destinations, operating an extensive network across Asia, Australia, the Middle East and the US.

Its 71-strong fleet is comprised of one A321NEO, 35 Airbus A320, seven Airbus A321CEO, eight Airbus A330, eight ATR 72-500 and 12 ATR 72-600 aircraft.

The ATR aircraft are used by its subsidiary Cebgo for domestic destinations where jet operations are not possible.