Cebu Air — controlled by billionaire Lance Gokongwei and his family’s JG Summit — plans to gradually expand and transform the company’s fleet over the next five years amid signs that travel and tourism are making a comeback. a post-pandemic recovery.
“While we remain conservative in our 2022 fleet growth, over the next five years, we will have 48 deliveries and 35 exits, ending in 2026 with 87 aircraft,” said Gokongwei, CEO of Cebu Air — owner of the Philippines ’largest carrier Cebu Pacific — said Wednesday at the company’s annual shareholders’ meeting.
Cebu Air has allocated 32.8 billion pesos ($ 625.8 million) in capital expenditures this year to support the transformation of its fleet in Cebu Pacific, which will have 74 aircraft by the end of 2021, Gokongwei said. The company says it aims to replace their older aircraft with the more fuel-efficient Airbus A330 neo jet.
The airline is upgrading its fleet amid a surge in travel demand as governments around the world ease Covid-19 bans. Cebu Pacific carried more than 2 million passengers in the first quarter, up 272% from last year, the company said yesterday when it announced their latest quarterly results.
While revenue increased 148% to 6.7 billion pesos in the first quarter, boosted by more passenger and freight traffic, Cebu Air’s net loss expanded to 7.6 billion from 7.3 billion pesos last year. due to higher jet fuel expenses and unfulfilled market mark. losses from its convertible bonds.
“For the remainder of 2022, Cebu Pacific sees a better business outlook driven by domestic recovery and reopening to international destinations,” Cebu Pacific said in a statement. “However, it remains wary of the risks presented by rising jet fuel prices and interest rates and depreciation of the Philippine peso against the US dollar.”
Rising oil prices and the depreciation of the peso pulled Cebu Air’s parent JG Summit into the red, with a net loss of 2.8 billion pesos in the first quarter. The group’s petrochemical business posted a net loss of 2.1 billion pesos during the quarter due to higher raw material prices.
“For the first quarter of this year, we saw the reopening of the economy positively affecting most of our subsidiaries, with our overall revenue showing quarter-on-quarter and year-on-year. year improvements, ”Gokongwei, who is also president and CEO of JG Summit, said in a statement. “However, market volatility with rising oil prices and the main cost of inputs, coupled with the depreciation of the peso has affected profits and we expect it to remain and push on our margins. “
JG Summit, one of the largest conglomerates in the Philippines, also has interests in food and beverage, banking, real estate and utilities. The business was founded by former billionaire John Gokongwei in 1954 as a corn starch factory. After Gokongwei passed away in 2019, his six children — Lance, Robina, Lisa, Faith, Hope and Marcia — inherited his fortune. The siblings have a combined net worth of $ 4 billion, which puts them at No. 4 on the Philippines ’50 Richest list when it was last published in September last year.