CEBU AIR, Inc. reported a net income of P9.12 billion for 2019, or more than double its net income a year ago of P3.92 billion, driven by its core business.

In a disclosure to the stock exchange on Monday, the operator of budget carrier Cebu Pacific said its revenues grew 14.4% to P84.81 billion last year from P74.11 billion it generated for the year 2018.

This growth was mainly driven by the passenger segment of the airline operator’s business which contributed P61.68 billion to the total revenues, 13.7% higher than the previous year’s P54.26 billion.

“This was mainly attributable to the 10.8% growth in passenger volume to 22.5 million from 20.3 million last year as the Group increased capacity. The increase in average fares by 2.6% to P2,745 from P2,675 last year also contributed to the increase in revenues,” the listed airline operator said.

Cebu Air’s ancillary revenues grew 21% to 17.38 billion from the previous year’s P14.36 billion while the cargo segment contributed P5.75 billion, up 4.7% from the figure in 2018.

The company said the growth in ancillary revenues was driven by the increase in passenger traffic coupled with pricing adjustments and increased volume of certain ancillary products and services.

To recall, Cebu Air’s net income plunged 50.6% to P3.9 billion in 2018, from P7.9 billion in the previous year, due to the “challenging macro environment.”

The airline’s flying operations expenses last year increased by P349.25 million or 1.2% to P30.26 billion due to the increased in pilots’ training costs. However, fuel expenses went down by 3.3% or P39.48 million, the company said.

To support its plans to increase the airline’s frequency on its current routes and to add new city pairs and destinations, Cebu Air said it will have 63 aircraft deliveries beginning this year until 2026.

“The Group is also set to venture into the dedicated freighter market making it the only passenger airline in the Philippines with dedicated cargo planes. The first converted ATR 72-500 freighter aircraft was received in August 2019 while the second will be delivered within 2020,” it added.

But the airline operator also noted that the coronavirus disease 2019 (COVID-19) is expected to “adversely affect” its financial health.

“While it is difficult to predict when operating conditions will improve, the Group believes that [the COVID-19] remains a going concern, given the measures undertaken, its liquidity position, its access to short and long term funding, and the strong relationships it has with major suppliers,” Cebu Air said further. — Arjay L. Balinbin