Vacations and international travel cause Cebu Pacific's net income to treble in Q1 of this year.

Cebu Pacific credited "strong travel demand" for the more than twofold increase in its net profitability during the first quarter of 2024 as compared to the same period in 2023.

After earning P939 million in Q1 2023, Cebu Pacific reported a net income of P2.24 billion in Q1 2024, a roughly 108% increase. Since the epidemic stopped operating in 2020, the low-cost carrier had not generated a profit till that time last year.

Cebu Pacific carried more than 5.5 million passengers between January and March 2024, up more than 14% from the same time last year and 3% from the preceding quarter. Travellers returning from their holidays during Christmas and Holy Week, as well as other local Philippine celebrations, contributed to this development. In particular, international destinations showed an increase in the number of passengers, according to a Cebu Pacific quarterly report.

As a result, Cebu Pacific's passenger income increased to P17.83 billion, a 25% annual increase. Additionally, its cargo and ancillary revenues increased by 11% and 14%, respectively. In Q1 2024, total revenue increased by 21% to P25.3 billion.

Operating expenses for the low-cost carrier increased by 15% to P22.65 billion, primarily due to an increase in flights and costs associated with the fleet. Expenses increased as a result of the Philippine peso's decline vs the US dollar.

However, Cebu Pacific's increased operational expenses were not able to keep up with the gain in revenue, which resulted in an operating income of P2.6 billion in Q1, an increase of 114% year over year.

As of March 31, 2024, Cebu Pacific operated 2,998 weekly flights on 65 domestic and 33 foreign destinations, according to its quarterly report. With an average age of 5.8 years, the airline operates a fleet of 87 aircraft.

Philippine Airlines, a full-service carrier also based in the Philippines, saw a 25% decline in net income in the first quarter of 2024 compared to the same time in 2023, indicating that it was unable to maintain its unprecedented earnings in 2023. The flag carrier blamed the decline on "inflationary cost pressures" as well as the return to normalcy of international travel after the post-pandemic spike.

News source:

https://www.rappler.com/business/cebu-pacific-earnings-report-q1-2024/