Cebu Pacific profit soars with international success

Agence France-Presse

Posted at Mar 26 2015 08:18 PM | Updated as of Mar 27 2015 04:18 AM

MANILA - The Philippines' largest airline on Thursday reported a 67-percent rise in profits last year, with strong growth in domestic passenger numbers and swift success on a new Australia route.

Cebu Pacific posted a net profit of 853 million pesos ($19 million) in 2014, up from 512 million pesos in 2013.

The country's pioneer budget airline flew 16.9 million people last year, as passenger traffic grew 17.5 percent, it said in a statement.

Cebu Pacific's Manila-Sydney route had 30 percent of the market by the end of last year, after launching just three months earlier, chief executive advisor Garry Kingshott told reporters in a conference call.

Kingshott also said he expected growth on routes to Dubai and Kuwait, which were opened in the fourth quarter of 2014.

"We've seen positive uptake in the first quarter with fairly solid bookings for the March to April period... my sense is that we're over the hump on the long haul operations," he said.

"With true price competition, we can stimulate traffic. There's demand there that's going to be served because of legacy carriers' (higher) prices."

The Manila-Dammam route, however, will be suspended from next week due to weaker-than-expected demand and aircraft will be redeployed to the Manila-Doha route, he said.

"We do need to give some of these routes sufficient time to mature," he said, adding that they are "under constant review".

Domestically, where Cebu Pacific has a market share of around 60 percent, Kingshott predicted growth would continue with first-quarter numbers looking "pretty solid".

Banking on a tourism boom, the airline will increase flights to Puerto Princesa, gateway to popular white sand beaches and diving spots, and Legazpi, which is home to the spectacular Mayon volcano.

International tourist arrivals to the Philippines rose 3.25 percent to 4.8 million in 2014.

The government is on an aggressive promotional campaign to bring the number to 10 million by the time President Benigno Aquino steps down in mid-2016.

Cebu Pacific carrier said full-year profit in 2014 rose despite a 1.2-billion-peso loss in the fourth quarter, as a drop in world oil prices caused fuel hedging losses.

Cebu Pacific is owned by tycoon John Gokongwei, the Philippines' fifth-richest man, according to Forbes Magazine. It flies to 34 domestic destinations and 28 overseas.

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