The country’s leading carrier by volume and market share plans to increase seat capacity by roughly 25 percent next year, with passenger growth projected to match or exceed this rate, according to president and chief commercial officer Xander Lao in a recent interview.
Lao said the airline will end 2024 with over 24 million passengers, a 20-percent increase.
This marks a historic high for the carrier, founded by the Gokongwei family in 1996, when Cebu Pacific began operations with a small fleet of used DC-9 planes.
“I think 2025 augurs well. We are in a unique position to grow where others cannot,” Lao said.
“We believe our competitors will be unable to grow due to the supply chain constraints that airlines are experiencing all over the world,” he added.
Growing fleet
Cebu Pacific has received 15 aircraft this year—an unusually large number, according to Lao—enabling the airline to expand its operations as demand from revenge travel continues to soar.
He anticipates fewer plane deliveries in 2025, but these are in addition to the massive order of up to 152 next-generation Airbus planes scheduled for delivery starting in 2028.
Cebu Pacific closed the third quarter of the year with a fleet of 91 planes. It also purchased local carrier AirSWIFT from Ayala Land, boosting its domestic network.
Lao bullish on regional hubs
Lao emphasized strengthening Cebu Pacific’s network in Cebu, Clark, Iloilo, and Davao to serve these areas more efficiently amid congestion at Manila’s Ninoy Aquino International Airport.
He said the airline wants to revive past hubs to support growth in domestic and international travel.
“Is it early? We don’t know and we won’t know until we do it. Iloilo used to be a hub before COVID-19. It was profitable for us but we had to pull out [due to the pandemic],” he told InsiderPH.
“It’s about using some of our good performing routes in the past,” he said.
New routes
The carrier is boosting its international presence with the recent addition of trips to Chiang Mai and Kaohsiung.
On Jan. 16, 2025, it will launch trips to Sapporo, the largest city in Japan’s Hokkaido region.
Lao said not all new routes will succeed, with some international destinations taking as long as two years to reach profitability.
Analyst view
Alfred Benjamin R. Garcia, research head at AP Securities, said Cebu Pacific (CEB) remains a “buy” due to growth prospects, though he expressed caution over rising costs, particularly with the strengthening dollar and its impact on expenses such as fuel.
“The [third quarter] earnings we saw that the growth in costs from its larger fleet outpaced the revenue growth from more passengers and flights,” he said.
“We'll likely see even more pressure from the cost side now that the dollar has strengthened,” he added.
The stockbrokerage house maintains its target price of P49.50 each for the company. It is currently trading at about P29.90 per share.
Recent financial performance
Cebu Pacific’s listed operator, Cebu Air, reported a 33 percent decline in net income to P3.4 billion for the first nine months of 2024, despite an 11 percent growth in revenue to P74.5 billion.
The revenue increase was driven by a 13 percent rise in passengers to 17.5 million and an average seat load factor of 84.9 percent, but higher expenses weighed on earnings.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
