Cebu Air Inc., the operator of Cebu Pacific and Cebgo, said net income fell by more than a fifth in the first six months of 2018 on higher operating expenses brought about by costlier jet fuel prices.
The airline, owned by the Gokongwei Group, said net income amounted to P3.30 billion in the January-to-June period, down 24 percent from P4.3 billion year-on-year
Cebu Air registered revenues of P37.83 billion in the six-month period, up 6.1 percent from P35.65 billion revenues generated in the same period last year.
Passenger revenues rose 6.3 percent to P28.30 billion from P26.62 billion a year ago.
Cebu Air attributed the increase in passenger revenues to the 3.7-precent rise in average fares to P2,734 from P2,637 last year.
The growth in passenger volume by 2.6 percent to 10.354 million from 10.094 million last year also contributed to the increase in revenues.
Cargo revenues increased 28 percent to P2.652 billion, while ancillary revenues declined 1.2 percent to P6.87 billion from P6.96 billion last year.
Cebu Air incurred operating expenses of P33.06 billion, up 14 percent from P29 billion last year.
Cebu Air blamed the increase in operating expenses to the rise in fuel prices in 2018, coupled with the weakening of the Philippine peso against the US dollar.
The peso averaged 51.98 per US dollar in the first six months from an average of 49.93 last year.
The growth in the airline’s seat capacity from the acquisition of new aircraft also contributed to the increase in expenses.
Flying operations expenses climbed 18 percent to P14.52 billion from P12.29 billion incurred in the same period last year. This was largely brought about by the 22.7-percent increase in aviation fuel expenses to P12.337 billion from P10.05 billion last year.
Jet fuel prices averaged $84 a barrel in the six months from $63 per barrel in 2017.