Cebu Pacific banks on travel frenzy to lift 2025 profit
Budget airline Cebu Pacific is placing its bets on demand for affordable flights to propel growth this year after posting lower earnings in the first quarter.
In a stock exchange filing on Friday, Cebu Pacific chief financial officer Mark Cezar said they “remain optimistic on our financial outlook.”
“Underlying demand for affordable air travel remains strong, and we’ve made earlier strategic investments to ensure resilient operations,” Cezar added. “Leveraging on these existing assets, [Cebu Pacific] remains well-positioned for sustainable growth and improving profitability.”
This came as earnings of Cebu Air Inc., the operator of the Gokongwei-led airline, plunged by 78 percent to P466 million in the first three months of the year.
Higher costs
According to Cebu Pacific, this was due to higher costs associated with fleet and operation expansion.
It accepted 17 aircraft deliveries and 13 spare engines last year to support capacity growth. As of end-March, Cebu Pacific had 99 aircraft in its fleet flying to 63 destinations and serving 127 routes.
Cebu Pacific likewise offered more than 3,200 flights per week across its domestic and international routes.
At the same time, Cebu Pacific posted its highest first-quarter revenue to date at P30.4 billion, up by 20 percent, as it flew more passengers.
The airline carried 7 million travelers during the period, representing a 26-percent surge.
This resulted in a 19-percent jump in passenger revenue to P21 billion.
Cargo
Cargo revenues also climbed by 35 percent to P1.7 billion after the airline transported 51.6 million kilograms of cargo.
Cebu Pacific CEO Michael Szucs reiterated to stockholders on Thursday that they expected to increase seat capacity by as much as 25 percent this year to support passenger volume growth.
He noted that the market had already absorbed much of their capacity added in the second half of last year.
“This gives us great confidence as we look ahead to 2025, where we expect to continue our rapid growth,” Szucs said.
Cebu Pacific has been aggressive in its expansion the past year. Last September, it finalized a P1.4-trillion order—the largest such deal in Philippine aviation history—with European plane maker Airbus for 152 planes. It will start taking deliveries of the units by 2029.
