Cebu Pacific Reports Sluggish Recovery in Mainland China Market
Cebu Pacific has reported a slow recovery in the Mainland China market, with tourist arrivals down 83% from 2019. The airline has redirected capacity to other regions while achieving an operating profit of Php 9.2 billion in 2024. Passenger numbers increased by 18%, leading to total revenues of Php 104.9 billion, although net profit decreased by 32%.
Cebu Pacific has reiterated its struggles with recovery in the Mainland China market, acknowledging a need to redistribute capacity to other regions. President Xander Lao emphasized that China’s tourism arrivals remain significantly low, with figures reported at 83% below 2019 levels. Consequently, the airline has adjusted its asset allocation away from China to maintain operational efficiency.
This is not the first indication of a tepid recovery for Cebu Pacific in China; earlier this year, the airline postponed the reopening of several routes citing weak demand. During a briefing on March 27, following the release of the airline’s annual results for 2024, Lao presented the findings.
For the fiscal year ending December 31, 2024, Cebu Pacific reported an operating profit of Php 9.2 billion (approximately $160 million), reflecting a 7% increase from the previous year. The company experienced a 16% rise in total revenue, amounting to Php 104.9 billion, with passenger revenue contributing Php 71.3 billion, a 14% increase.
Passenger numbers rose by 18% in 2024, totaling 24.5 million, mainly driven by international travel. Cebu Pacific expanded its operations by adding 27 new international routes from its non-Manila hubs. Despite a 17% increase in operating expenses to Php 95.7 billion, driven by higher airport costs and fleet maintenance, the airline continues to grow its network.
Cebu Pacific also reported an annual net profit of Php 5.4 billion, reflecting a decline of 32% year-on-year. In the fourth quarter of 2024, the airline achieved an operating profit of Php 3.5 billion, a 43% increase, accompanied by a revenue boost of 28% to Php 30.4 billion. Notably, operating costs increased by 26% to Php 26.9 billion. Ending the year with a total of 98 aircraft, Cebu Pacific added 13 to its fleet compared to 2023.
Cebu Pacific faces significant challenges in the Mainland China market, with tourist arrivals lagging substantially post-pandemic. The airline has proactively redeployed its assets to strengthen other segments of its network. Despite the adversity in China, Cebu Pacific reported a positive financial performance in 2024, highlighting a notable increase in revenue and passenger numbers, although it also experienced a decrease in net profit.
Original Source: www.flightglobal.com
Post Comment