Cebu Pacific income up 400% to P4.39B in 2015

Cebu Pacific Air, the country’s biggest budget carrier, saw profit surge in 2015 as it tapped into the fast-growing demand for air travel while benefiting from lower fuel prices.

Cebu Pacific, in its annual report disclosed to the Philippine Stock Exchange Wednesday, said net income during the period jumped about 400 percent to P4.39 billion as revenues hit P56.5 billion, up 8.7 percent compared to the same period in 2014.

The carrier’s passenger revenue alone in 2015 was at P42.7 billion, higher by 6.2 percent.

Cebu Pacific carried more passengers last year, while opening new routes and expanding its fleet. By the end of 2015, Cebu Pacific flew 18.4 million passengers, higher than the 16.9 million it served in 2014.

Its fleet expanded to 55 planes last year from 52 in 2014, with flights subsequently increasing by 7.6 percent. The carrier said the average ticket price declined in 2015 by 2.5 percent to P2,323 after the government ordered the removal of the fuel surcharge.

The firm’s cargo business and ancillary revenues were also up last year. Cargo revenue increased 10 percent to P3.46 billion while ancillary revenues, which refer to non-ticket sources like in-flight food and baggage fees, rose 19.6 percent to P10.36 billion.

Cebu Pacific also posted savings as the cost of fuel fell in 2015. Its operating expenses ended the year at P46.8 billion, down 2.2 percent.

Flying operations alone dipped 20 percent to P20.9 billion. Cebu Pacific said this was mainly due to the 23.9 percent decline in aviation fuel expenses to P17.659 billion for the year ending December 31, 2015. The average published fuel price at the end of 2015 was at $64.79 per barrel against $112.48 per barrel in the same period in  2014.

Cebu Pacific also recorded a hedging loss of P2.93 billion, which was up 26.7 percent due to the decline in fuel prices. Separately, it booked a net foreign exchange loss of P2.21 billion last year.

The group’s major exposure to foreign exchange rate fluctuations is due mainly to its dollar-denominated long-term debt incurred from its aircraft acquisitions. Between 2016 and 2021, Cebu Pacific expects delivery of three more brand-new Airbus A320, 30 Airbus A321neo, and 16 ATR 72-600 aircraft.