Cebu Air Inc., the operator of budget airline Cebu Pacific, posted a massive jump in profits in 2019—a snapshot of the thriving industry prospects prior to the coronavirus pandemic in 2020.
In its 2019 annual report, Cebu Air said full-year net income hit P9.12 billion, up a whopping 132 percent versus P3.92 billion in 2018.
The gain came on the back of strong passenger revenues while expenses, mainly for fuel, were kept in check.
Total revenues in 2019 amounted to P84.8 billion, up 14 percent. The lion’s share came from passenger ticket sales of P61.68 billion, up 13.6 percent.
This was aided by increased capacity and a 2.6-percent increase in average fares to P2,745.
Cebu Air served 22.5 million passengers last year, up 10.8 percent. Total expenses were up 7.6 percent to P72.18 billion. Flying operations expenses alone increased 1.2 percent to P30.26 billion due to higher pilot training costs, offset by the declining cost of jet fuel.
Industry prospects reversed in 2020 due to the spread of COVID-19, a respiratory illness that has infected over 700,000 people around the world.
Cebu Air has grounded all passenger flights for at least a month until the middle of April while terminating the roles of hundreds of newly hired flight crew members earlier this month.
Lance Gokongwei, CEO of Cebu Air, could see profit decline by up to P4 billion should demand remain depressed for the next six months, a stock exchange filing on Feb. 3 showed. Gokongwei said, however, that the company’s balance sheet remains solid amid the crisis facing the global aviation sector. INQ