Cebu Air Inc., the Philippines’ leading carrier operating as Cebu Pacific Air, reported a 5.4 percent dip in its net income for the first half of 2024 to P3.55 billion from the P3.75 billion earned in the same period last year mainly due to lower tax benefits.

In a disclosure to the Philippine Stock Exchange (PSE), the airline said its revenues amounted to P51.44 billion for the period ended June 30, 2024, 18.1 percent higher than the P43.55 billion revenues earned in the same period last year. 

The increase in revenues is due to the 18.4 percent growth in passenger revenues to P35.68 billion from P30.13 billion generated in the same period last year, due to the overall increase in travel demand.

Passenger volume increased by 1.2 million or 12.1 percent while average fares increased by 5.7 percent to P3,101 in the current period.

Cargo revenues increased by 31.9 percent to P2.64 billion from P2 billion generated in the same period last year due to a 26.8 percent increase in cargo volume carried coupled with a four percent increase in cargo yield.

Ancillary revenues increased by 14.8 percent to P13.12 billion from P11.43 billion generated in the same period last year, mainly due to higher passenger volume coupled with higher ancillary yield.

The group incurred operating expenses of P45.95 billion, higher by 15.5 percent compared to P39.79 billion incurred in the same period last year.

The increase was mainly driven by the increase in flight activity, since a material portion of its expenses are based on flights and flight hours. 

The weakening of the Philippine peso against the US dollar also contributed to the increase in operating expenses.

For the first half of 2024, CEB paid income taxes of P45.27 million as against a credit or benefit of P507.95 million in the same period last year mainly accounted from the movement of the deferred tax assets from derivative liabilities, heavy maintenance visits and lease liability.

For the second quarter of 2024, CEB generated P26.1 billion in revenue, a 15 percent increase from the previous year as it carried six million passengers, the highest passenger count in a single quarter in its history. 

This is 10 percent growth in number of passengers was fueled by the summer traffic from April to May, the school break in June, and additional frequencies in high-traffic destinations such as Cebu, Davao, and General Santos. 

Strong demand for regional destinations such as Hong Kong, Japan, Vietnam, and Australia also contributed to the growth.

With this, the passenger business generated almost P18 billion in revenues, 13 percent higher year on year, while ancillary business generated close to P7 billion, 16 percent higher year-on-year.

CEB’s cargo business also showed a notable improvement, as it flew close to 36 million kilos of cargo in the second quarter, 39 percent higher than same period last year. 

This is on the back of over 38 thousand flights flown for the quarter, five percent higher year on year. With this, CEB’s cargo business generated over P1.4 billion in revenue, up 59 percent on the previous year.

Operating income improved to P2.8 billion, 12 percent higher than same period last year. After considering financing costs, and other non-core gains and losses, CEB’s net income for the second quarter posted at P1.3 billion compared to P2.67 billion in the same period last year due to tax benefits.

“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,” said CEB Chief Executive Officer Michael Szucs.

He added that “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.”