Cebu Pacific Set To Accelerate Expansion with Neos

 - March 19, 2019, 9:38 AM
Cebu Pacific took delivery of its first Airbus A321neo in January. It plans to take four more along with another five leased A320neos by the end of the year. (Photo: Airbus)

The Philippines’ Cebu Pacific Air plans to add at least 10 new-generation aircraft to its fleet this year, as it steps up its fleet renewal and expansion plans in a bid to accelerate growth. The country’s largest airline expects to take delivery of five A320neos and five A321neos as part of an ongoing strategy to replace aging aircraft, broaden its network, and up-gauge flights at Manila’s congested Ninoy Aquino International Airport.

In January, Cebu Pacific took delivery of its first A321neo from Airbus as part of a larger order for 32 of the type. Additional plans call for one ATR 72-600 to arrive sometime this year. The airline now operates a fleet of 35 Airbus A320s, seven A321s, eight ATR 72-500s, 12 ATR 72-600s, and eight A330 widebodies.

In a securities filing on Monday, the airline announced a 50 percent decline in earnings in 2018, citing challenging market conditions such as high fuel prices, increased competition, the six-month closure of Boracay Airport, and operational limitations at key airports. Net profits fell to $73.8 million from 2017’s $149 million while passenger revenue rose 9 percent year-over-year to $1.4 billion; ancillary revenue grew by 6 percent. The airline generated a 19 percent increase in cargo carried, while passenger numbers rose by 3 percent to 20.3 million.

“Despite the pressures posed in 2018, we remained resilient,” said Cebu Pacific COO Michael Shau. “We were able to expand our network by up-gauging our flights touching congested airports. [The year] 2019 will be a different story though; we have already received the first of our fuel-efficient A321neo orders from Airbus and we expect 10 more new-generation aircraft this year. We also just announced four new domestic routes; 2019 is definitely the year we accelerate our growth."

While the airline is planning to add more passenger flights out of its Clark and Cebu hubs, it also sees more opportunity in cargo, reflected in plans to convert two of its ATR 72-500s to large-cargo-door freighters. Once it completes the conversion, Cebu Pacific will become the first low-cost carrier in the world to operate freighters of any type. With operations set for the first quarter of this year, the incoming ATRs will allow the airline to serve smaller airports in the Philippines, thereby allowing for new routes and increased connectivity.