Cebu Pacific returns to profit

MANILA, Philippines — Low-cost carrier Cebu Pacific is regaining the elevation it had prior to the pandemic, returning to profitability on the back of recovering demand for international flights.

In its latest financial report, Cebu Pacific’s parent Cebu Air Inc. disclosed a net income of P5.03 billion from January and September, a reversal from its net loss of P12.05 billion a year ago.

Cebu Pacific benefitted from the 78 percent rise in its revenue to P66.9 billion, as earnings from the passenger segment doubled to P46.13 billion on the resurgence of air travel.

The airline attributed the revenue growth to the sustained increase in its passenger traffic. It served 15.5 million guests in the nine months to September, up by almost half from 10.4 million travelers during the same period last year.

Further, Cebu Pacific improved its international footprint by roughly six times to 3.5 million, as the carrier is close to regaining its pre-pandemic capacity for overseas flights. Cebu Pacific has recorded a load factor of 84.4 percent as of September.

Airlines obtain the load factor by getting the percentage of seats sold against the slots available, providing them with a metric of their performance for a specific period.

Also, Cebu Pacific said the average fare has gone up by 38 percent to P2,970, as Filipinos started to travel abroad this year with pandemic regulations lifted worldwide.

On the other hand, the carrier sustained a 25 percent increase in expenses to P60.75 billion from January to September as it made additional investments to serve the increase in travel demand.

For one, Cebu Pacific said fuel consumption during the period ballooned by 56 percent given the spike in flight activities. The airline also suffered from the depreciation of the peso in the world market, although these extra costs were mitigated by the decrease in the price of jet fuel.

In spite of this, Cebu Pacific chief finance officer Mark Julius Cezar said the carrier is taking the right path in its goal to return to safer skies. The airline owned by the Gokongweis, just like any other operator, bled financially at the height of the pandemic as a consequence of limited travel.

“Cebu Pacific continued its financial recovery in the third quarter, and we also remain optimistic on its future growth,” Cezar said.

For 2023, Cebu Pacific has allocated P42 billion for capital expenditures, mainly for the addition of 19 new aircraft to its fleet.