Cebu Air Inc., the operator of budget air carrier Cebu Pacific (CEB), reported a net income of P3.4 billion for the nine months of the year, 33 percent lower than last year’s P5.07 billion.

In a stock exchange disclosure on Wednesday, Cebu Air said the decrease was driven by margin pressures from higher operating expenses related to the airline’s investments in additional aircraft and spare engines.

“CEB has a unique opportunity to grow when others cannot. So, despite the short-term impact on margin development, we will be growing rapidly, creating a robust network across the Philippines to expand and strengthen our market presence,” Cebu Pacific chief finance officer Mark Cezar said.

“Airport and aircraft investments open a significant market potential for CEB, and these initiatives allow us to take advantage, as well as contribute to the overall Philippine growth story,” he added.

Notably, despite the drop in net income, the company achieved an operating income of P5.7 billion, down 8 percent compared to P6.2 billion last year.

84.9% seat load

Total revenue for the period rose to P74.5 billion, an 11 percent increase year on year, primarily fueled by a 13 percent growth in passenger numbers to 17.5 million. The airline maintained an average seat load factor of 84.9 percent.

By the end of September, CEB operated a fleet of 91 aircraft, 10 more than the previous year, and invested in 10 additional spare engines to support its growth and enhance reliability.

The airline flew over six million passengers during the quarter, a 14 percent increase year on year, but with lower average fares of P2,577 per passenger, down 15 percent year on year.

The airline continued to expand its operations, deploying new aircraft deliveries to its regional hubs in Cebu, Clark, Davao and Iloilo while upgrading to larger aircraft in Manila.

CEB also recently acquired AirSWIFT, adding turboprop capacity to its fleet and integrating El Nido, a key leisure destination, into its network.

Cezar said this will enable CEB to reach a domestic market share of nearly 60 percent in the fourth quarter from 52 percent before the pandemic.