With P1 Billion Earnings, Cebu Pacific Returns to Profitability for the First Time Since the Pandemic

Listed Cebu Air, the operator of budget carrier Cebu Pacific, reported a net profit of P1.1 billion for the first quarter of 2023, a stunning 180-degree turnaround from the P7.6 billion loss it recorded one year prior. 

This is the company’s first profitable quarter since the start of the pandemic three years pandemic. Cebu Air chalked the stellar results up to strong passenger and ancillary revenues.

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Total revenues were also up 211 percent to P20.9 billion from the same period last year. The company said the steep growth was largely driven by the recovery of its passenger business, which generated P14.3 billion, or 352 percent higher year-on-year. This was followed by ancillary business which generated P5.46 billion, up 221 percent.

The country’s biggest budget airline said it flew over 4.8 million passengers on 32,000 flights in the first quarter, up 135 percent and 94 percent respectively during the same period last year as travel restrictions were fully eased. Operating expenses, on the other hand, increased only 63 percent, “as increased utilization of aircraft and operating systems, coupled with higher productivity of crew and personnel, also contributed to the improvement of the airline’s profit margin,” Cebu Air said.

The company’s operating income turned positive to P1.24 billion in the first quarter from an operating loss of P5.34 billion in the same period last year.

In the second quarter, the airline said it expects to exceed its pre-pandemic capacity on a systemwide basis, “supported by an optimistic outlook as the tourism industry continues to recover, plus the strengthening of its Clark and Cebu hubs.”

“CEB expects to reach 2019 international capacity levels during second quarter, while domestic operations will continue to grow with additional flight frequencies to various destinations, coupled with flight resumption of routes such as Manila – Laoag, Iloilo – Puerto Princesa, and Iloilo – Cagayan,” the company added.

In March, Cebu Pacific reported narrowing its full year net loss by nearly 44 percent to P14 billion in 2022 compared to P24.9 billion the previous year. Operating loss, meanwhile, also decreased to P11.4 billion, or about half of the previous year. 

Based on data from the Civil Aeronautics Board, the airline owned by the Gokongwei Group flew 13.5 million domestic passengers last year, up 312 percent from 2021 and enough to give it a commanding 57 percent domestic market share. That’s up five percentage points from 2019’s 52 percent. 

Cebu Pacific is a unit of the Gokongwei Group, as is Summit Media, which publishes Esquire Philippines.