Recovery in the travel market allows CEB to reduce its losses

Cebu Air Inc., the operator of low-cost carrier Cebu Pacific (CEB), narrowed its first-half net loss as the travel market continued to recover.

According to a disclosure to the stock exchange, Cebu Air reduced its net loss by 31.1% to 9.5 billion pesos from January to June from 13.8 billion pesos.

This, after registering a 250.3% increase in revenue to 20.7 billion pesos from 5.9 billion pesos thanks to significant increases in passenger volume, cargo services and flight activities following the easing of travel restrictions.

Passenger revenue soared 474.5% to 11.7 billion pesos from 9.6 billion pesos, while passenger volume also soared 428.1% to 6.3 million from 1, 2 million passengers.

Cargo revenue, meanwhile, also rose 26.8 percent to 3.6 billion pesos, while ancillary revenue jumped 414.2 percent to 5.4 billion pesos.

Besides its domestic network, Cebu Pacific has also begun to strengthen its international operations, expanding and reopening flights to select Asian destinations such as Singapore, Thailand, Hanoi, Bali and Taiwan.

The group said its expenses rose 55.1 percent to 28.8 billion pesos from 18.6 billion pesos, mainly due to fuel costs, which are also directly affected by the weak peso.

“Amid the risks posed by high jet fuel prices, peso depreciation and interest rate hikes, Cebu Air remains cautiously optimistic that we can turn the tide as soon as domestic demand looks robust and “International borders continue to reopen. We remain steadfast in our commitment to provide accessible air travel service to all,” said Cebu Pacific Chief Financial Officer Mark Cezar.

In July, the airline said it would continue to rack up losses this year, despite a steady stream of domestic revenue as Filipinos went into revenge mode.

Cezar made the confirmation to BusinessMirror, saying, “We also need more international passengers,” adding that the higher fuel surcharge “cannot cover rising fuel prices and falling peso.”

Earlier, CEB announced that it had already reached 100% of its pre-pandemic capacity, adding flight frequencies in key domestic destinations like Cebu and Caticlan (Boracay). So far, the carrier has reached 88% of its pre-pandemic capacity for international flights, with Singapore, Dubai and Bali being their most popular destinations.

Last year, the CEB recorded some 25 billion pesos in losses. Cezar said: “There is an addiction to fuel and forex, but yes we are still optimistic that we will register a smaller loss. [this year] than last year.”