Cebu Pacific reports 23.6% drop in H1 profit

The operator of budget airline Cebu Pacific Air saw profits decline in the first semester of 2018 as higher costs, led by the higher price of oil and the weaker peso, squeezed margins.

Cebu Air Inc. said in a stock exchange filing yesterday that net income hit P3.31 billion, down 23.6 percent.

The drop came even as revenue hit P37.84 billion, up 6.1 percent.

Cebu Air said passenger revenue rose by 6.3 percent to P28.3 billion. Passenger volume went up 2.6 percent to 10.35 million flyers. Cebu Pacific added that average fare increased by 3.7 percent to P2,734.

Cebu Air said costs went up 14 percent to P33.1 billion, partly as it ramped up operations and increased flights.

The biggest cost driver, however, was the rise in fuel prices. Cebu Air noted that aviation fuel costs jumped 22.7 percent to P12.34 billion. It said the fuel price per barrel as of end June 2018 amounted to $84 versus $63 per barrel in the same period last year.

This increase was further affected by the depreciation of the peso against the US dollar.

Cebu Air noted that overall flying operations jumped 18.1 percent to P14.52 billion.

The company operated a fleet of 67 planes at the end of the first half. These were comprised of 36 Airbus A320, five Airbus A321 CEO, eight Airbus A330, eight ATR 72-500 aircraft and 10 ATR 72-600.