As traveling peaked, Cebu Pacific profit soars to P9.75B

Cebu Air Inc., operator of the country’s biggest budget airline Cebu Pacific Air, said profit in 2016 more than doubled as it carried more passengers, while it continued to benefit from relatively lower oil prices.

The company, which also saw cargo and non-fare revenues increase last year, said net income jumped 122.3 percent to P9.75 billion compared to the same period in 2015.

Total revenues were up 9.6 percent to P61.9 billion. This was led by passenger revenues, up 9.2 percent to P46.59 billion. Cebu Air, which also operates Cebgo, said it served 19.1 million passengers last year, an increase of 4.1 percent.

The increase came as the group expanded its fleet size to 57 planes last year, from 55 in 2015. The fleet is mainly comprised of Airbus A320s and A330 planes for long-haul flights to the Middle East and Australia.

Seat load factor was also up, while average fares increased 4.9 percent to P2,436 in 2016.

During the period, cargo revenue rose 3 percent to P3.56 billion.

Cebu Air also made notable gains in ancillary revenues, which pertains to sales outside passenger tickets such as onboard meals and baggage. It said ancillary revenues last year rose 13.4 percent to P11.74 billion.

Helping control expenses was the drop in fuel costs, a big operating expense for airlines.

Specifically, flying operation expenses dipped 5.8 percent to P19.7 billion. Cebu Air said this was mainly due to the 10.4-percent decline in aviation fuel expenses for the year.

In 2016, Cebu Pacific flew to 36 domestic and 30 international destinations through 102 routes and more than 2,820 flights per week.

It likewise strengthened its intraregional network in the Visayas with flights from Cebu to Ormoc, Roxas and Calbayog. The airline also launched direct service between Kalibo and Incheon; as well as a first US destination—Guam.

Early last year, the carrier also teamed-up with some of the world’s leading low cost carriers (LCC) to form Value Alliance, the world’s largest LCC Alliance, which aimed to provide greater value, connectivity and choice for travel throughout Southeast Asia, North Asia and Australia.

The firm also opened a branch office in South Korea to boost promotional efforts in the Korean market.