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Cebu Pacific cuts losses as revenues surge 261% in 2022

Lance Spencer Yu

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Cebu Pacific cuts losses as revenues surge 261% in 2022

CEBU PACIFIC. The first of 32 A321neo aircraft ordered by Cebu Pacific takes off from Hamburg, Germany.

Cebu Pacific

With the resurgence in travel demand, Cebu Pacific trims its net loss to P14 billion in 2022, from P24.9 billion in 2021

MANILA, Philippines – Though Cebu Pacific has yet to return to profitability, the Gokongwei-owned airline recorded P56.8 billion in revenues for 2022, a 261% jump from 2021.

As revenues surged, it was able to trim its net loss to P14 billion in 2022, from P24.9 billion in 2021. Operating loss in 2022 was reduced to P11.4 billion, nearly half of the 2021 figure.

The low-cost carrier’s passenger business grew by 459% year-on-year to P35.1 billion, benefiting from the trend of domestic and international revenge travel as borders opened up.

Cebu Pacific increased its domestic market share to 57% in 2022, with revenge travel fueling the revival of a pandemic-battered tourism industry.

Even with demand surging, however, Cebu Pacific’s profitability remains hampered by challenges, including the spike in jet fuel prices and the depreciation of the peso versus the dollar.

Bigger domestic market share

In 2022, Cebu Pacific flew over 14.8 million passengers, with 13.5 million of them on domestic flights. Total operations grew 335% year-on-year, with the steep recovery driven by higher travel demand and looser travel regulations.

The airline ended the year at 92% of pre-pandemic capacity. Cebu Pacific previously said it would restore “100% pre-COVID systemwide capacity” by March 2023, but executives also cautioned the tourism industry may take a few years to return to past levels. (READ: How Chinese visitors could boost Philippine tourism in pandemic’s wake)

Despite the impressive recovery statistics, Cebu Pacific has some ways to go before it can recover to its pre-pandemic operations. For instance, the number of flights it had in 2022 was at 108,329, only about 75% of the 143,897 flights it handled in 2019. In terms of passengers carried, the 2022 figure of 14,845,000 passengers is only 66% of the 22,467,599 passengers it had in 2019.

Still, Cebu Pacific has expanded its operations at Clark International Airport in Pampanga to reach 13 domestic and international destinations, making it the largest airline servicing Northern Luzon and Central Luzon.

It also plans to lease five aircraft in 2023 to serve growing passenger demand, on top of the 10 new Airbus NEO aircraft expected to be added to its fleet this year.

Cebu Pacific also expects the easing of pandemic-related travel requirements in key destinations to further boost tourism and help airlines recover. Japan, South Korea, and Taiwan have all loosened restrictions. Hong Kong, one of the carrier’s largest markets, lifted its mandatory quarantine requirements in December 2022 and its face mask requirement in March 2023. – Rappler.com

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Lance Spencer Yu

Lance Spencer Yu is a multimedia reporter who covers the transportation, tourism, infrastructure, finance, agriculture, and corporate sectors, as well as macroeconomic issues.