Cebu Pacific operator widens losses on higher expenses

Higher expenses, which was magnified by a one-off loss, sunk the operator of Cebu Pacific further into red territory in the first quarter despite its total revenues growing more than twofold as passenger volume rose.

Cebu Air reported on Thursday its net losses widened to P7.61 billion in the first quarter from P7.3 billion year-on-year.

Operational expenses, which include costs related to flying operations, repair and maintenance and aircraft and traffic servicing, rose by 26 percent to P12.05 billion in the first three months from P9.53 billion last year.

Other expenses grew to P3.3 billion as of end-March from just P327.5 million year-on-year because of a P2.21-billion nonrecurring market valuation losses from debt instruments issued.

Regular services

But the Gokongwei-led company managed to grow total revenues by 147.6 percent to P6.71 billion as of end-March, thanks to passenger revenues leaping by 256.2 percent to P3.16 billion from just P887.45 million year-on-year.

Passenger volume rose to 2 million during the period as the number of flights picked up by 128.3 percent amid easing mobility restrictions.

Cargo revenues were up nearly 40 percent to P1.85 billion due to “higher yield from chartered cargo services.”

With better passenger volume and flight activity, ancillary revenues skyrocketed to P1.7 billion for the period from P501.74 million.

“During the first quarter of 2022, the group resumed more regular services but on a limited capacity until the imposition of the more relaxed alert level classification for most parts of the country. Currently, the group is expecting the continued increase in demand for airline services as the country gradually opens not only to domestic travels but also to international destinations,” the listed firm said.

It spent P423.77 million in capital expenditures in the first quarter. As of end-March, total assets and liabilities stood at P137.47 billion and P134.29 billion, respectively.

Last month, the budget carrier received its 10th A321neo (new engine option) from Airbus’ Hamburg facility. The brand new aircraft consumes 20-percent less fuel and has nearly 50-percent reduction in noise footprint compared to older models.