Higher fares, passenger traffic boost Cebu Pacific's Q1 earnings
MANILA, Philippines – The net income of the operator of Cebu Pacific Air soared in the first quarter of the year on the back of the steady increase in the number of passengers, higher fares and lower expenses.
Cebu Air Incorporated reported Friday, May 15, that the budget carrier's net income jumped 1,255% to P2.22 billion ($50 million) in the first 3 months of the year from P161.16 million ($3.63 million) in the same period last year.
Paterno Mantaring Jr, officer-in-charge of corporate affairs division of Cebu Pacific, said the airline attributes its bullish income and passenger growth to increased presence in key markets, strategic seat sales offering the lowest possible fares, and continuous network expansion.
“Our latest operating statistics affirm our objective which is to further stimulate air travel and grow inbound tourism by expanding our services in new destinations," Mantaring added.
The increase could be traced to the 20.7% increase in revenues to P14.2 billion ($319.82 million) from January to March this year, compared to P11.76 billion ($264.86 million) in the same period last year.
Passenger revenues went up by 22.1% to P10.81 billion ($243.47 million) from P8.85 billion ($199.32 million) as volume of passengers rose 13% to 4.3 million compared to 3.8 million, while the number of flights increased by 14.3% with the arrival of additional aircraft.
During the period, Cebu Pacific said average fares went up by 8.1% to P2,525 ($) from P2,336 ($).
The Gokongwei-led carrier also managed to limit the increase in operating expenses to 1% to P11.37 billion ($256.08 million) in the first 3 months of the year from P11.25 billion ($253.38 million) in the same period last year.
Cebu Pacific said higher expenses were driven by its expanded long haul operations and growth in seat capacity from the acquisition of new aircraft.
The budget carrier, however, said the increase was offset by the substantial reduction in fuel costs due to the sharp decline in global jet fuel prices, as well as the continued strengthening of the peso against the US dollar.
Flying operations expenses fell 17% to P5.14 billion ($115.76 million) from P6.2 billion ($139.64 million) as aviation fuel expenses dropped 22.1% to P4.32 billion ($97.30 million) from P5.55 billion ($124.99 million).
The airline reported higher expenses for aircraft and traffic servicing; repairs and maintenance; aircraft and engine lease; reservation and sales; general and administrative; and passenger service.
Cebu Pacific operates an extensive route network serving 55 domestic routes and 36 international routes with a total of 2,597 scheduled weekly flights. It operates from seven hubs including the Ninoy Aquino International Airport (NAIA); Mactan-Cebu International Airport; Diosdado Macapagal International Airport (DMIA); Davao International Airport; Iloilo International Airport; and the Kalibo International Airport.
Late last year, the airline launched long haul operations to Kuwait, Sydney, and Riyadh. It is set to fly to Doha in Qatar next month but had ended its service to Dammam in Saudi Arabia last March. It also flies to Dubai.
It operates a fleet of 55 Airbus aircraft with an average age of 4.41 years consisting of 10 Airbus A319, 31 A320, six A330, and eight ATR 72-500 aircraft.
The airline is scheduled to take delivery of 7 more brand-new Airbus A320 and 30 Airbus A321neo aircraft between this year and 2021 under its ongoing P177.60 billion ($4 billion) fleet renewal program. – Rappler.com