Cebu Pacific back in black after 3 years in the red

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Cebu Pacific's A320neo. Photo from Cebu Pacific.
  • Cebu Pacific returned to profitability in 2023 with an operating income of P8.6 billion and positive net income of P7.9 billion, recovering from three years of losses
  • Growth was attributed to the strong revenue of P62.5 billion generated from the passenger business and P24.1 billion from ancillary business
  • Revenue from the cargo business was down 42.4% to P4.1 billion
  • Cebu Pacific said prospects for the airline industry in the Philippines remain promising in 2024

Cebu Pacific returned to profitability in 2023 with an operating income of P8.6 billion and net income of P7.9 billion, recovering from three years of losses brought about by adverse impact of the pandemic.

The 2023 income was a reversal from the P11.429 billion operating loss and P13.979 billion net loss in 2022.

Revenue reached P90.6 billion in 2023, marking a 60% increase year-on-year, parent firm Cebu Air, Inc, said in a regulatory disclosure.

The growth in 2023 was attributed to the strong revenue of P62.5 billion generated from its passenger business and P24.1 billion from its ancillary business, recording increases of 78% and 66%, respectively, year-on-year.

With a larger fleet to serve resurging domestic travel demand and the reopening of most international markets, the airline flew 20.9 million passengers on 140,730 domestic and international flights in 2023, up 41% and 30%, respectively, year-on-year. The seat load factor also improved to 84%, almost 9 percentage points higher year-on-year.

Cebu Pacific said their airline group captured a 53% share of the domestic market for 2023, enhanced by the increase in flight frequencies to popular local destinations and from other non-Manila hubs, the resumption of the Manila-Laoag, Iloilo-Puerto Princesa, and Iloilo-Cagayan routes, and the restart of flights from Clark International Airport.

For its international footprint, the airline resumed flights to Melbourne, Macau, and Shenzhen from Manila, and launched Manila-Danang flights.

Cebu Pacific also took 18 aircraft deliveries throughout 2023.

Revenue from the cargo business wasn’t as rosy — it was down 42.4% to P4.1 billion from P7.12 billion in 2022.

The airline transported 127,544 tons of cargo in 2023.

Total operating expenses in 2023 amounted to P82 billion, 20% higher year-on-year due to higher fuel and fleet-related costs.

The fourth quarter marked Cebu Pacific’s strongest in terms of revenue, as it generated P23.7 billion, 23% higher year-on-year. Operating income in the fourth quarter was at P2.4 billion, a reversal from the operating loss of P232 million in the same quarter in 2022.

The net income for the fourth quarter was P2.9 billion, a turnaround from the P1.9 billion net loss incurred in the same period in 2022.

“Moving forward, we are optimistic that Cebu Pacific’s solid 2023 financial results will set the foundation for a stronger financial performance in 2024,” Cebu Pacific chief finance officer Mark Cezar said in a statement.

According to its regulatory disclosure, Cebu Pacific believes prospects for the airline industry in the Philippines remain promising.

“Demand for air travel is projected to increase in the coming years, underpinned by infrastructure developments toward easing airport congestion and improving connectivity,” Cebu Pacific said, adding this will be further supported by the optimistic economic growth outlook for the Philippines and the broader Southeast Asia region.

Moreover, a return of the global aviation industry to normal growth patterns is expected in 2024.

To capitalize this momentum, Cebu Pacific said the group will be taking initiatives in 2024 to secure its expansion plans and growth for the years ahead.

In the second quarter, the group is expected to announce the single biggest aircraft order in the history of Philippine aviation.