Cebu Pacific reports 50.6% decline in 2018 net profits

Photo from Cebu Pacific

MANILA, Philippines — Budget airline Cebu Pacific saw its net income decline by 50.6 percent in 2018, citing “challenging macro environment.”

Cebu Pacific said its net income fell to P3.9 billion from 2017’s P7.9 billion even as its revenue increased by 9 percent to P74.1 billion from last year’s P68.03 billion.

Cebu Pacific noted “high fuel prices, a volatile Philippine peso, rising interest rates, increased competition, the six-month closure of Boracay, and operational limitations in the country’s key airports” as factors that affected the decline.

Nonetheless, passenger revenues reached P54.3 billion, 9 percent higher than 2017’s P49.93 million.

The airline also said it flew a total of 20.3 million passengers in 2018, 2.7 percent higher from the 19.7 million recorded in 2017.

The cargo business, meanwhile, witnessed a double-digit growth at 19 percent as the airline carried 210 million kilos of cargo.

“Despite the pressures posed in 2018, we remained resilient. We were able to expand our network by upgauging our flights touching congested airports,” Cebu Pacific Chief Operations Officer Michael Ivan S. Shau said in the airline’s statement on Monday.

The budget carrier said it is hopeful to bounce back in 2019 with its acquisition of fuel efficient planes and opening of new domestic routes.

“2019 will be a different story though—we have already received the first of our fuel-efficient A321NEO orders from Airbus, and we expect 10 more new generation aircraft this year. We also just announced four new domestic routes. 2019 is definitely the year we accelerate our growth,” Shau said.

Cebu Pacific recently announced it is expanding its domestic routes in Clark, Pampanga, and Cebu.

The company said it will mount flights between Clark International Airport and Iloilo, Bacolod, and Puerto Princesa in Palawan. Meanwhile, routes in development for its Cebu hub are focused on North Asia.

READ: Cebu Pacific to increase domestic flights as demand continues to rise

/kga