Cebu Pacific Air has reported a record net profit of PHP3.014 billion (USD68 million) for 2Q2014 as both yields and load factor improved. It marks Cebu’s highest quarterly profit since the Philippine LCC became publicly traded in 2010 – an impressive achievement given profits of nearly every other airline in Southeast Asia slipped in 2Q2014.
Domestically Cebu Pacific has benefitted from consolidation in the Philippine domestic market. Competitors have cut capacity, resulting in double digit improvements to yields and the return of rationality in a market which had suffered from an extended period of unsustainable fare wars. Cebu’s domestic market share exceeded 60% for the first time in 2Q2014.
The Philippine international market remains highly competitive but Cebu Pacific’s widebody operation is now in the black. Cebu Pacific also now has potential opportunities to expand in the regional international market as its biggest competitor, Philippine Airlines (PAL), makes adjustments.
Cebu Pacific has its best quarter ever
Cebu Pacific reported significantly better than expected earnings on 13-Aug-2014, beating by a wide margin financial analyst expectations.
The second quarter is typically the best quarter for Philippine airlines and all Philippine carriers benefitted this year from the shift of Easter to April. But Cebu’s profit figures were much higher than anticipated, particularly as it followed an 86% reduction in profits in 1Q2014 and disappointing losses in 3Q2013 and 4Q2013.