The Gokongwei-led carrier said jet fuel prices surged from around $86 per barrel to as high as $180 to $200 per barrel in recent months, levels management warned were not sustainable for the industry.
Cash preservation mode
“Dividends for common shareholders are no longer on the table for this year,” Cebu Pacific chair Lance Gokongwei said during the company’s annual stockholders’ meeting on Thursday.
“Our priority is to maintain a strong and resilient cash position and we are implementing disciplined measures to preserve liquidity,” he said.
“Similarly, while we made our first preferred dividend payment last year, we will also be deferring preferred dividends this year, consistent with our focus on cash preservation. We believe this approach positions CEB to navigate current uncertainties while safeguarding long-term value for all our stakeholders,” he added.
Cebu Pacific resumed preferred share dividend payouts in 2025, while plans to resume common share dividends in 2026 would have marked its first since 2019.
Cebu Pacific shares closed Thursday’s session at P31.90 (+0.31 percent) and have traded relatively flat since the start of 2026.
P22 billion war chest
Cebu Pacific said it is entering the current volatility from a position of strength after building a roughly P22 billion cash balance last year.
“This plus access to extensive credit lines will provide us a long liquidity runway to ride through the worst of conditions for at least a couple of years,” said Cebu Pacific CEO Mike Szucs.
“What matters most is starting from the position of strength.. Amidst all the noise, we are no less bullish on the fundamental advantages of CEB and its growth outlook as the [low cost carrier] in the Philippines and in the region over the medium to longer term,” he added.
Fuel bill doubles
Cebu Pacific chief financial officer Mark Julius Cezar said the airline burns around 550,000 barrels of jet fuel every month, meaning every $1 increase in fuel prices adds about $550,000, or roughly P33 million, to monthly operating costs. The impact is further amplified by foreign exchange movements, with every P1 shift in the peso-dollar rate affecting costs by around P160 million to P170 million per month.
He said jet fuel prices have nearly doubled since the start of the Middle East conflict, raising Cebu Pacific’s fuel expenses by roughly $50 million monthly and putting pressure on airline profitability globally.
Cezar added that Cebu Pacific carries around $600 million in US dollar-denominated debt tied to aircraft financing and convertible bonds, making the airline sensitive to peso movements, although the impact is partly cushioned because about two-thirds of its cash holdings are also kept in US dollars.
Better positioned than rivals
Despite the uncertainty, Cebu Pacific said it remains better positioned than many rivals because of its domestic-heavy network and fuel-efficient fleet.
“That said, we want to emphasise that Cebu Pacific remains very well positioned in the current environment relative to the competition,” Szucs said, noting that around 80 percent of its flights are domestic while 72 percent of its jet fleet already consists of fuel-efficient NEO aircraft.
—Edited by Miguel R. Camus
