Cebu Pacific (CEB) is confident it will continue its financial and capacity growth in 2024, with systemwide network forecast to exceed 100% of pre-pandemic capacity in the fourth quarter of this year.
CEB flew 4 million domestic passengers in the third quarter, up 5% year on year and already above pre-pandemic levels. CEB grew its international operations steeply, as it flew over 1.3 million passengers for the quarter, a 228% increase year on year. CEB’s international network recovery continued to gain traction, especially with the opening of more North Asian countries such as Japan, Taiwan, and Hong Kong.
CEB generated revenues of P23.3 billion for the third quarter of 2023, 39% higher year-on-year and 23% above the same period in 2019. CEB saw a notable increase in travel demand in the third quarter, attributable to the change in school calendars, which shifted graduation and school breaks from the second quarter to the third quarter. With this, net income grew to P1.3 billion, a turnaround from last year’s net loss of P2.5 billion as well as the third quarter 2019’s net loss of P384 million.
“Going into the fourth quarter, we remain optimistic as we saw our domestic market share at 55% in October despite challenges on fleet availability. Aside from that, we expect that by the end of the year, our systemwide network will be at 103% of pre-pandemic levels; domestic will continue to exceed pre-pandemic levels, while international is seen to be at about 93%,” said Cebu Pacific CEO Michael Szucs.
“By yearend, we expect to fly to 60 destinations, through over 100 routes and at least 2,700 weekly flights,” he said.
CEB expects its seat capacity to grow between 5 and 8% in 2024 from 2023 levels despite the grounding of a number of aircraft next year due mainly to early inspection of Pratt and Whitney engines that power the A320/321 NEO fleet.
In anticipation of the issues, CEB has already taken a focused approach to manage the situation.
“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,” said Szucs.
The airline has been increasing its fleet through this year, accepting delivery of 19 aircraft in 2023 to take the fleet to 76 aircraft at the end of the year, and further raising the size to 92 in 2024.
CEB will begin inspections from January 2024 across its A320/321 NEO aircraft that are powered by Pratt and Whitney (P&W) engines. This is not a safety issue, and inspection and replacement procedures are set well in advance to ensure the continued operation of the P&W fleet.
Consequentially, CEB expects to have ten (10) aircraft grounded in January, with the number rising through 2024 to 20.
CEB has put in place substantial measures to mitigate any effect on its customers. Flight schedules that are on sale are already adjusted to account for the potential impact. CEB also carries enhanced standby coverage on its fleet and is seriously considering a short-term wet lease from Bul Air, a charter company of Bulgaria Air.
CEB has also introduced improved customer recovery options and policies. It has also expanded and enhanced customer support teams, both on the ground and online, to enhance customer communications and engagements.
Aside from these, CEB expects to receive before the end of 2023 the proposals from suppliers after issuing Request for Proposals (RFP) to both Airbus and Boeing for 100 to 150 narrowbody jets, which represent the largest ever commitment of any airline into the Philippine aviation industry.
“We’ve taken all these initiatives to uphold our commitment to delivering affordable, safe, and dependable flights. While we acknowledge the challenges that we will face in 2024 and possibly even 2025, we remain very optimistic on the long-term economic prospects in the Philippines for our aviation industry, given the plans to privatize NAIA, the development of the Bulacan airport, and further enhancements of regional airports to relieve congestion and increase connectivity,” he said.