Cebu Pacific parent cuts losses as air travel further picks up
The surging momentum for air travel bodes well for the operator of budget carrier Cebu Pacific as it narrowed its nine-month net losses.
Cebu Air Inc., in a disclosure on Thursday, reported that its net losses in the January to September period amounted to P12.05 billion, markedly lower compared to nearly P22 billion in the same period a year ago.
For the third quarter alone, the Gokongwei-led airline trimmed its losses to P2.54 billion from P8.2 billion in the previous year.
Nine-month passenger revenues grew nearly 85 percent to P22.48 billion from P3.34 billion a year earlier as passenger volume climbed more than five times to 1.9 million. Average fares for the period were up 22.1 percent to P2,154.Cargo revenues for the nine months ending Sept. 30 improved by 31.7 percent to P5.62 billion, supported by a 19.1-percent increase in cargo kilograms flown.
More flight activities and higher passenger volume lifted ancillary revenues by 511.6 percent to P9.44 billion from last year’s P1.54 billion.
“The overall increase in revenues was primarily driven by significant increase in passenger volume, cargo services and flight activities as the COVID-19 restrictions already eased by March 2022,” the airline said in its quarterly report.
Expenses up, too
With more flights, expenses related to flying operations grew by 333.5 percent to P19.56 billion for the period. Aircraft and engine lease expenses increased by 121.9 percent to P621.58 million. General and administrative expenses, meanwhile, were up 8.6 percent to P2.31 billion due to higher utilities spending, insurance and security and other services, taxes and licenses, among others.
For the remainder of the year, Cebu Pacific said it was expecting more demand for air travel for both its domestic and international networks. It is set to add flights to destinations such as Bali, Bangkok, Fukuoka, Hanoi, Ho Chi Minh, Hong Kong, Jakarta, Kuala Lumpur, Singapore and Taipei.
“We are encouraged by some notable improvements in our numbers amid the ongoing challenges related to fuel and foreign exchange rates. We remain cautiously optimistic that through our ongoing initiatives, coupled with a sustained increase in passenger traffic, we will soon see better days ahead,” Cebu Pacific chief financial officer Mark Cezar said. INQ
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.