Low-cost carrier Cebu Pacific’s net income for the first quarter of 2014 plunged 85.8 percent to P164.164 million from P1.157 billion earned in the same period last year.
The decline was attributed to cost increases driven by the peso depreciation, “which led to an increase in Cebu Pacific’s dollar-based expenses,” Cebu Pacific vice president for corporate affairs, lawyer Jorenz Taneda, said in a text message.
The group incurred operating expenses of P11.25 billion in the quarter, up 22 percent from the P9.223 billion operating expenses recorded for the same period last year as a result of the group’s expanded operations. The airline launched its long haul services in October 2013 and seat capacity grew from the acquisition of new aircraft.
The increase in expenses was reinforced by the weakening of the Philippine peso against the US dollar, with the peso reaching an average P44.88 per US dollar for the three months ended March 31, from an average P40.70 last year based on the Philippine Dealing and Exchange Corp. (PDEx) weighted average rates.
The group generated revenues of P11.764 billion in the three months ended March 31, up 11.6 percent from the P10.542 billion revenues earned in the same period last year.
Cebu Pacific’s passenger revenues grew P679.646 million, or 8.3 percent to P8.848 billion from P8.169 billion. The company said the passenger revenue increase was mainly attributable to the 7.1 percent rise in passenger volume to 3.8 million from 3.5 million in 2013 as it added more aircraft to its fleet such as the wide-body Airbus A330, which has a configuration of more than 400 all-economy class seats.
The number of aircraft was up at 51 as of March 31, including three brand new Airbus A330, from 43 as of a year earlier.
Contributing to the improvement in revenues was the increase in average fares by 1.1 percent to P2,337 for the three months ended March 31 from P2,312 in the same period last year.