CebuPac long-haul unit seen turning profitable in 2016

CEBU Pacific Air may see its long-haul unit become profitable next year as operations mature, think tank Capa-Center for Aviation forecast in a report.

Prospects also remain bright, as Cebu Pacific plans to launch new flights to Honolulu in the United States next year and Melbourne, its second destination in Australia after Sydney, Capa said.

Cebu Pacific CEO Lance Gokongwei earlier confirmed plans to launch flights to both destinations.

Cebu Pacific launched its long-haul unit in 2013 via flights to Dubai in the United Arab Emirates. It has since expanded with flights to other parts of the Middle East like Qatar, Saudi Arabia and Kuwait.

“While Cebu Pacific’s long haul operation has been unprofitable in 2015, the group believes it is tracking well and could become profitable in 2016,” Capa said in its report.

“Profitability should improve as its long haul operation matures… While competition will intensify on some of its routes, the Philippines is not as fiercely competitive as other markets in Southeast Asia,” it added.

Gokongwei earlier said the carrier might launch flights to Honolulu by the latter part of 2016. Expansion to the United States was made possible after the US Federal Aviation Administration restored the Philippines’ category 1 status in 2014.

“Cebu Pacific now has all the required regulatory approvals but is still waiting for approval from Manila International Airport Authority, which needs to allocate the proposed new A330 service to Honolulu terminal space,” Capa said.