Cebu Pacific profit tumbles 51% as fuel costs, tough competition sting
Soaring fuel costs, a volatile exchange rate and increased competition slashed Cebu Pacific’s 2018 earnings by half to P3.9 billion.
The airline unit of taipan John Gokongwei also had to deal with several other challenges during the year — the six-month closure of Boracay and the operational limitations in the country’s key airports.
Despite a challenging 2018, Cebu Pacific managed to grow its revenues by nine percent to P74.1 billion amid strong demand for air travel and sustained growth in its cargo business.
Passenger revenue rose nine percent to P54.3 billion while revenues from cargo grew at a faster pace of 19 percent as the airline carried 210 million kilos of cargo.
The budget carrier transported a total of 20.3 million passengers last year, 2.7 percent higher than the year earlier.
It mounted 390 flights daily. On average, flights were 85 percent full.
Cebu Pacific COO Michael Ivan Shau said the airline expects to bounce back this year with the addition of new routes and the arrival of more cost-efficient planes.
“ 2019 will be a different story though—we have already received the first of our fuel-efficient A321NEO orders from Airbus, and we expect 10 more new generation aircraft this year…2019 is definitely the year we accelerate our growth,” he said.
Cebu Pacific flies to a total of 37 domestic and 26 international destinations.