Cebu Pacific's net income soars amid slump in price of jet fuel

Cebu Pacific is making a killing, as first-quarter profit soared because of the combination of lower fuel costs and strong demand for travel.

In a statement, Cebu Air Inc (CEB) said it earned P2.23 billion in the January to March period, or 1,255 percent more than the P164.16 million in the same three months last year.

"CEB attributes its bullish income and passenger growth to increased presence in key markets, strategic seat sales offering the lowest possible fares and continuous network expansion," JR Mantaring, officer-in-charge for CEB corporate affairs.

Revenue rose by a fifth to P14.2 billion this year from P11.764 billion last year.

The passenger business, which comprised nearly three-fourths of CEB’s revenue, climbed by 22 percent to P10.81 billion from P8.85 billion in 2014.

The Gokongwei-owned airline ascribed this to the 13 percent increase in passenger volume to 4.3 million from 3.8 million last year and the 8.1 percent increase in average fares to P2,525 from last year’s P2,336.

CEB mounted 14.3 percent more flights after it acquired wide-body Airbus A330 aircraft with a configuration of more than 400 all-economy class seats.

Cargo revenues increased 13.6 percent to P772.545 million from P679.818 million last year.

Operating expenses rose by a slower one percent to P11.368 billion this year from P11.252 billion last year. While the company embarked on costlier long-haul flights, cheaper jet fuel tempered overall expenses by 17 percent to P5.144 billion this year from P6.2 billion in 2014.

Aviation fuel expenses fell by 22.1 percent to P4.325 billion from P5.551 billion over the same period.

Published jet fuel prices averaged $68.98 per barrel, half the $121.47 in 2014.

- Interaksyon

Cebu Pacific's net income gets a lift from increase in passengers

The country’s largest budget airline saw its profit rise by two-thirds last year.

In a disclosure to the Philippine Stock Exchange, Gokongwei-owned Cebu Air Inc (CEB) said it earned P853.5 million in 2014, up 67 percent from the P511.95 million the previous year.

Fueling the growth was a 27 percent increase in revenue to P52 billion last year from P41 billion in 2013. Passenger revenue comprised 77 percent of total revenue and increased by 27 percent to P40.19 billion from P31.66 billion over the same period. Cargo revenue also grew by 20.6 percent and comprised 6 percent of the top line.

The operator of Cebu Pacific ascribed the higher revenue to a 17.5 percent growth in passenger volume to 16.9 million last year from 14.4 million in 2013.

The budget carrier fielded 6.9 percent more flights after it acquired wide-body Airbus A330 to bring its fleet to 52 by yearend.

Alongside the higher number of flights, operating expenses also climbed 23.9 percent to P47.843 billion last year from the P38.6 billion in 2013. More than half of that pertained to flying operational expenses, which also increased by a fifth.

Lower jet fuel prices however partly made up for the increase in fuel expenses brought about by the higher number of flights mounted. Jet fuel cost $112.48 a barrel last year, down from the $122.97 average in 2013.

Jet fuel comprised half of operating expenses and rose 19 percent year-on-year.

Cebu Pacific shares were down 2 percent at P85.25 each at the close of trading today.

- Interaksyon

Cebu Pacific passenger traffic up 6.6 pct at start of 2Q

Cebu Pacific’s passenger traffic grew in the single digits at the start of the second quarter of the year.

Data from the Gokongwei-led budget airline show that it flew 1.44 million domestic and international passengers in April, up by 6.6 percent from 1.35 million in the same period last year.

The airline's load factor, which pertains to number of seats occupied per flight, inched up by 0.8 points to 89.8 percent last month from 89 percent last year.

In the first four months, Cebu Pacific's passenger traffic grew by 6.1 percent to 5.18 million from 4.89 million passengers last year. Its load factor went down to 84.4 percent from 85.2 percent in 2013.

Sought for comment, Cebu Air Inc (CEB) spokesperson Jorenz Tanada said the growth in passenger traffic was because of increased presence in key markets, strategic seat sales offering the lowest possible fares and continuous network expansion.

CEB president Lance Y. Gokongwei had said the budget airline would carry in excess of 15 million passengers this year. Including the traffic of recently acquired Tigerair Philippines, CEB expects more than 17 million passengers in 2014.

In March, the shareholders of Singapore's Tiger Airways Holdings Ltd and the Civil Aeronautics Board separately approved the 100 percent acquisition of Tigerair by CEB. The transaction was valued at $15 million.

CEB posted a net income of P164.164 million in the January to March period, down by 85.8 percent from the P1.157 billion in the same three months of last year.

Revenues of P11.76 billion however were 11.6 percent higher than the P10.54 billion in 2013. Passenger revenues amounted to P8.85 billion, up 8.3 percent from P8.17 billion last year.

- Interaksyon

Cebu Pacific to return 5 Airbuses to Tiger Airways Singapore by Q3

Budget airline Cebu Pacific will complete the return of five Airbus aircraft from newly-acquired Tiger Airways to their original owner Tiger Airways Singapore Pte Ltd.

Two of Tiger Airways' Airbus A319s have already been returned to the Singaporean airline while three more A320s will be returned by the third quarter of 2014, lawyer Jorenz Tañada, Cebu Pacific vice president for corporate affairs, said in a text message.

According to aviation market analysis firm Centre for Asia Pacific Aviation, "Cebu Pacific was unwilling to assume the Tigerair Philippines fleet of five A320 family aircraft as they are powered with different engines from Cebu Pacific’s A320 fleet."

Cebu Pacific spent $7 million to buy the 40 percent share of Tiger Airways Singapore Pte Ltd and $8 million for the 60 percent owned by Filipino businessmen in Tigerair Philippines, giving the budget airline 100-percent control when the purchase was completed on March 22.

It plans to rename Tiger to Go Air Inc.

Cebu Pacific currently operates more than 2,200 flights a week to 24 international and 33 Philippine destinations in its network while Tigerair Philippines operates 118 flights a week week to 11 domestic and international destinations.

The combined fleet is expected to allow Cebu Pacific to fly to high-growth markets like Australia, Myanmar, and India and allow Tigerair Philippines to fly more passengers to additional cities in Cebu Pacific’s network in the Philippines and North Asia\

 - GMA News