Low-cost carrier Cebu Pacific swung to a net loss of nearly ₱400 million in the first three months of the year on the back of a ₱1.8-billion foreign exchange losses driven by a weaker peso as tensions in the Middle East rages on.

Cebu Air Inc., the parent firm of Cebu Pacific, reported that it incurred a ₱399.81 million net loss from January to March, reversing the ₱465.90 million net income recorded in the same period last year.

While revenues in the first quarter rose by 10 percent to ₱33.23 billion from ₱30.42 billion, the impact of a weaker peso on the airline’s dollar-denominated debt weighed significantly on its bottom line.

As the peso depreciated early in the quarter due to domestic pressures and later from the impact of the Middle East conflict, Cebu Pacific saw its foreign exchange losses balloon to ₱1.79 billion from ₱249.61 million last year.

In the same vein, the airline hiked its operating expenses by six percent to ₱30.30 billion from ₱28.46 billion in the previous year, although fuel expenses remained relatively low since fuel had been procured before the recent surge in prices.

Still, Cebu Pacific chief executive officer (CEO) Mike Szucs said higher costs are leaving the company with no choice but to take a more cautious approach to protect margins.

He said the carrier has been managing capacity with a focus on route profitability by reducing its flight network through the suspension of some routes, helping preserve financial flexibility.

“Our scale, fleet efficiency, and strong domestic network position us well to navigate near-term uncertainty while continuing to build long‑term value,” said Szucs.

Cebu Pacific ended March with more than ₱23 billion in cash, which it would use to manage near-term volatility while supporting strategic initiatives.

As the country’s largest carrier, Cebu Pacific continues to see robust demand in passenger volume, posting an eight-percent increase to 7.54 million from 6.95 million. Load factor, or the percentage of available seats occupied by passengers, increased slightly to 82.1 percent from 81.4 percent.

With the increase in passengers booking flights, passenger revenues improved by six percent to ₱22.52 billion, while ancillary or non-ticket earnings grew at a higher rate of 19 percent to ₱8.98 billion.

The cargo business also expanded in the three-month period to ₱1.82 billion, up eight percent from ₱1.69 billion a year ago, driven by higher widebody capacity.

With the impact of higher jet fuel prices expected to become more apparent in the second quarter, Cebu Pacific is leveraging its growing fleet of fuel-efficient Airbus A320neo aircraft to optimize costs moving forward.

With the delivery of one aircraft during the quarter, 73 percent of its 101-strong fleet is now composed of these narrowbody jets. (Dexter Barro II)