By Emmie V. Abadilla
Cebu Pacific (CEB) generated more revenues from ancillary businesses than from passengers or cargo in the first three months of this year although its net earnings plummeted 68.2% from P4.037 billion to P1.283 billion as its expenses ballooned.
CEB’s revenues for the quarter totaled P16.864 billion, 4.7% higher than the comparative period, but its ancillary businesses, which grew 10 per cent, accounted for the bulk, or P3.573 billion.
Its average ancillary revenue per passenger increased 10.5% with improved online bookings plus a wider range of ancillary revenue products and services.
On the other hand, the airline’s passenger revenues posted 2.1% growth, hauling in P254.529 million as average fares climbed 2.6% while cargo revenues grew 21.3% to P1.015 billion, with more volume of cargo transported by air.
CEB’s consolidated balance sheet remains solid, with net debt to equity of 0.91 [total debt after deducting cash and cash equivalents. Consolidated assets grew to P103.400 as the airline added aircraft to its fleet.
However, CEB’s operating expenses shot up by 20.3% to P14.302 billion due to the rise in fuel prices coupled with the weakening of the Philippine peso against the US dollar.
Flying operations expenses increased by 34.0% to P5.993 billion with the 36.7% increase in aviation fuel expenses to P4.922 billion. In addition, aircraft and traffic servicing expenses increased by 19.6% to P1.899 billion as international flights increased 2.6% with the addition of more frequencies on existing routes.
Depreciation and amortization expenses also went up 12.5% to P1.663 billion after the arrival of one Airbus A320, one Airbus A330, two ATR 72-600 aircraft throughout 2016 and two ATR 72-600 aircraft in 2017, net of three Airbus A319 aircraft sold in the last half of 2016.