Cebu Pacific posts strong Q3 results, expects continued growth in 2024

Cebu Pacific (CEB) is poised for continued growth in 2024, despite facing challenges related to aircraft inspections. The airline reported robust financial and capacity growth in the third quarter of 2023, with a net income of P1.3 billion, a significant turnaround from last year’s net loss of P2.5 billion.

In the third quarter, CEB flew over 5.3 million passengers on 35,000 flights, marking a 27% increase in passenger numbers and an 18% rise in flight frequency compared to the same period in 2019. The seat load factor improved to 83.7%, demonstrating strong demand for CEB’s services.

Cebu Pacific CEO Michael Szucs attributed the positive performance to the notable increase in travel demand, driven by a shift in school calendars, which moved graduation and school breaks to the third quarter. Domestic travel remained robust, with 4 million passengers flown domestically, a 5% increase year on year and surpassing pre-pandemic levels.

Internationally, CEB’s operations saw significant growth, flying over 1.3 million passengers for the quarter, a remarkable 228% increase year on year. The airline’s international network recovery gained traction, especially with the reopening of more North Asian countries such as Japan, Taiwan, and Hong Kong.

“We remain optimistic as we saw our domestic market share at 55% in October despite challenges on fleet availability,” said CEO Michael Szucs. “By yearend, we expect to fly to 60 destinations, through over 100 routes and at least 2,700 weekly flights.”

However, looking ahead to 2024, CEB faces challenges related to the early inspection of Pratt and Whitney engines that power the A320neo family fleet. Despite anticipating the grounding of ten aircraft in January, rising to 20 throughout 2024, the airline aims to manage the situation effectively.

“We continue to explore various opportunities to supplement the fleet and ensure operational resilience, including securing both brand new and used aircraft, as well as exploring aircraft leases,” Szucs stated.

To mitigate the impact on customers, CEB has adjusted flight schedules, increased standby coverage, and is considering a short-term wet lease from Bul Air, a charter company of Bulgaria Air. The airline has also introduced improved customer recovery options and policies, along with expanded customer support teams, both on the ground and online.

In addition to these measures, CEB is set to receive proposals from suppliers by the end of 2023 after issuing Request for Proposals (RFP) to both Airbus and Boeing for 100 to 150 narrowbody jets. This commitment represents the largest ever by any airline into the Philippine aviation industry.

“We’ve taken all these initiatives to uphold our commitment to delivering affordable, safe, and dependable flights,” Szucs affirmed. “While we acknowledge the challenges that we will face in 2024 and possibly even 2025, we remain very optimistic about the long-term economic prospects in the Philippines for our aviation industry.”

Cebu Pacific’s Chief Finance Officer, Mark Cezar, echoed this optimism, stating, “CEB continued its financial recovery in the third quarter, and we remain optimistic about its future growth.”

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