CEBU Air Inc. saw profits plunging last year following a slew of macroeconomic factors such as steep fuel prices, currency volatility and rising interest rates.
Its revenues hit a single-digit growth for 2018, reaching P5.9 billion. The operator of budget carrier Cebu Pacific recorded a net income of P3.9 billion, based on a company statement. Compared to the P7.9 billion netted in 2017, the figure is a 50-percent drop.
Cebu Pacific COO Michael Ivan S. Shau described 2018 as “challenging” due to high fuel prices, a volatile Philippine peso, rising interest rates, increased competition, the six-month closure of Boracay and operational limitations in the country’s key airports.
“Despite the pressures posed in 2018, we remained resilient. We were able to expand our network by upgauging our flights, touching congested airports,” he said.
The company was able to end 2018 with P74.1 billion in revenues, a 9-percent increase, thanks to the ever-increasing demand for air travel and the growth of its cargo business.
In 2018, the carrier flew a total of 20.3 million passengers, about 2.7-percent more than the year prior.
Shau noted that Cebu Pacific will see better days this year, as the company jump-starts its aggressive expansion for both route and fleet.
“The year 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,” he said. “We also just announced four new domestic routes. 2019 is definitely the year we accelerate our growth.”
The company is set to receive 12 brand-new aircraft in 2019—six Airbus A321neos, five A320 neos and one ATR 72-600.
Through 2022, the company will engage in a massive refleeting program that will upgrade old aircraft and add more fuel-efficient ones to end 2022 with 83 jets.
It also plans to retire eight of its wide-body A330s and replace them with as many as 15 Airbus A330 neos or Boeing 787s.
“‘We will continue to pursue our fleet upgauging strategy and invest in the latest aircraft technologies, as well as develop secondary hubs like Cebu and Clark. We will also continue to grow our cargo business with the incoming ATR freighters, as well as continue our digital transformation for us to be more agile and adaptable to changing customer expectations,” Shau added. Cebu Pacific and subsidiary Cebgo fly to 36 domestic and 26 international destinations, with over 107 routes spanning Asia, Australia, the Middle East and the United States. For 2019, it targets to serve as many as 23 million passengers, and reach the 200-millionth passenger mark by 2020.