CEBU Air, Inc. (CEB), the operator of budget carrier Cebu Pacific, saw its attributable net income plunge by 50.9% to P1.31 billion for the second quarter from P2.67 billion, mainly due to higher expenses during the period.
In a regulatory filing, Cebu Air reported a combined revenue of P26.14 billion, higher by 15.3% from the P22.67 billion in the same period last year.
Broken down, the company recorded passenger revenues of P17.85 billion for the second quarter, up by 12.7% from the P15.84 billion a year ago; cargo revenues increased to P1.38 billion, significantly higher from last year’s P866.9 million, and its ancillary revenues climbed by 15.6% to P6.9 billion, compared with P5.97 billion in the same period a year ago.
Cebu Pacific carried a total of six million passengers in the second quarter alone, the company said, describing the feat as its highest passenger count in a quarter in its entire history.
The company said its cargo business also soared, flying nearly 36 million kilograms of cargo for the April to June period.
Still, despite posting higher revenues, Cebu Air’s attributable net income for the second quarter declined, attributed to higher expenses during the period, its financial statement showed.
The operator of the budget airline registered gross expenses of P23.3 billion for the second quarter, marking a 15.6% increase from the P20.15 billion in the same period last year.
For the six-month period, Cebu Pacific’s attributable net income also declined to P3.55 billion, lower by 5.3% from the P3.75 billion in the first half of 2023.
Cebu Air reported gross revenue of P51.44 billion for the first half of 2024, climbing by 18.1% compared with the P43.55 billion in the January to June period last year.
Passenger revenues account for the majority of the company’s increase in top line for the period, at P35.68 billion, up by 18.4% year on year.
For the first half, Cebu Air’s gross expenses soared to P45.95 billion, higher by 15.5% from last year’s P39.79 billion, mainly driven by flying operations expenses.
Its flying operations expenses for the first semester increased to P19.15 billion, higher by 14.2% from P16.77 billion a year ago; however, its expenses in repairs and maintenance decreased slightly to P7.38 billion, down from P7.41 billion last year.
Despite posting lower earnings for the second quarter and first six months, Cebu Pacific Chief Executive Officer Michael B. Szucs described the company’s developments for the period as a “significant achievement.”
“This has been a very important quarter for our airline, marked by significant achievements and crucial milestones. We’ve set new highs in terms of passengers flown, finalized our quasi-reorganization, and made the historic order of up to 152 aircraft from Airbus,” Mr. Szucs said.
Earlier this month, Cebu Air secured the approval of the Securities and Exchange Commission for its restructuring plan aimed at clearing the company’s deficit.
On July 17, 2023, Cebu Air’s board of directors approved its proposal to pursue an equity restructuring of its deficit.
The company proposed to use its additional paid-in capital of P20.66 billion to clear its deficit amounting to P16.27 billion, leaving it with a capital of P4.39 billion.
In June, the company announced that it would order up to 152 A321neos worth P1.4 trillion, or $24 billion, described as the largest aircraft order in the country.
“This substantive commitment, through the new aircraft order, aligns CEB’s ability to grow with the robust economic story in the Philippines and its ongoing investment in infrastructure,” Mr. Szucs said.
Alexander G. Lao, president and chief commercial officer of Cebu Air, has said that the airline is actively exploring various financing strategies for its pending aircraft acquisition.
The company anticipates the commencement of aircraft deliveries in 2028, with the procurement contract slated to be finalized by the third quarter of this year.
At the stock exchange, shares in the company gained five centavos or 0.18% to end at P27.85 apiece. — Ashley Erika O. Jose
