Cebu Air Inc. said on Wednesday net profit jumped 414 percent in 2015 on lower operating expenses and higher passenger traffic.
The operator of budget carriers Cebu Pacific and Cebgo, formerly Tigerair Philippines, said net income amounted to P4.40 billion last year from P853.50 million in 2014.
The CEB Group generated revenues of P56.502 billion in 2015, up 8.7 percent from P52 billion in 2014.
Passenger revenues rose 6.2 percent to P42.681 billion last year from P40.188 billion registered in 2014.
The company atttributed the increase to the 8.9-percent growth in passenger volume to 18.4 million from 16.9 million in 2014, driven by the increased number of flights in 2015.
The number of flights increased 7.6 percent year on year as the group added more aircraft to its fleet following the acquisition of wide-body Airbus A330 aircraft with a configuration of more than 400 all-economy class seats.
The number of aircraft increased from 52 in 2014 to 55 as of end 2015.
Cargo revenues increased 10 percent to P3.46 billion last year from P3.15 billion in 2014.
CEB Group incurred operating expenses of P46.801 billion in 2015, down 2.2 perecent from P47.843 billion in 2014.
“The decrease is attributable to the substantial reduction in fuel costs incurred for the year ended December 31, 2015 compared to the same period last year due to the sharp decline in global jet fuel prices,” CEB said.
Aviation fuel expenses fell 23.9 percent to P17.659 billion during period from P23.210 billion in 2014.
The average published fuel MOPS price stood at $64.79 per barrel last year from $112.48 per barrel in 2014.
The drop in fuel costs, however, was offset by the increase in majority of the group’s operating expenses, driven by its expanded long haul operations, growth in seat capacity from the acquisition of new aircraft and the weakening of the Philippine peso against the US dollar.
The peso depreciated to an average of 45.51 per US dollar in 2015 from an average of 44.40 in 2014.
Cebu Air expects to make profits this year for its long-haul business, with planned expansion of operations in the Middle East and the US.
“It’s going to be profitable this year for the long haul operations. We incurred a small net loss last year,” Cebu Air Inc. general manager for long haul division Alex Reyes told reporters earlier after the launch of its Manila-to-Guam flight.
Long-haul business contributes about 12 percent to the total revenue of Cebu Pacific.
Guam is Cebu Pacific’s sixth long-haul destination after Dubai, Sydney, Kuwait, Riyadh and Doha, Qatar.
Passengers flown on Cebu Pacific’s long-haul routes jumped 146 percent in 2015, on the back of increased presence in Australia and the Middle East.
Reyes said Cebu Pacific was the only low-cost carrier operating the Manila-to-Guam route, offering fares at 48 percent lower compared with the other airlines.