As Cebu Pacific increases its network and capacity, it is targeting to fly around 300 million passengers by 2020. The company disclosed that this is still aligned with the previous target of the airline to reach 200 million passengers by the same year. Now that it is planning to expand for the long haul, the target is achievable and it would depend on the strategies of the firm how they can attain the target. This target is set by the firm itself so to clear the path it is aiming to. For the past months, airline companies here in the Philippines have been struggling to hit their goal because of combined internal and external factors. The unstable global price of crude is one. It’s a good thing to know that Cebu Pacific is still on the right track in terms of its plans.
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Actually, Cebu Pacific has been serving more and more passengers every year. Last 2017, it hit its 150 millionth marker. In 2018, an additional 20 million passengers were served, ending the year with a total of 170 million. And for this year, the company is targeting to add about 22.5-23 million passengers to be flown. It seems like Cebu Pacific’s path is solidly clear and the milestone it set for itself is doable. If the company would continue to increase its capacity and develop its network, it can undoubtedly reach the 300 millionth mark as long as other factors remain stable and the firm is ready for any drastic change.
If you are wondering how would it be possible for the airline company to increase its capacity, here’s what they told us—in order to achieve the target, the firm is “upgaguging” its fleet. This means that the smaller aircraft will be replaced by bigger ones so that it can accommodate more passengers. If the company has a 180-seater plane, they are planning to substitute it with a 436-seater. The capacity is more than double and the aircraft is scheduled to be delivered already. Currently, Cebu Pacific is building up its fleet so that by the end of 2022, it would have a total of 83 aircraft from 71 last 2018. Apart from upgauging, the firm will also increase its frequencies to its flights to avoid congestion.
In 2018, the airline company reported a 50.6% decline in net income. The challenging macro environment was one major reason for this decrease. From P7.9 billion in 2017, the figure fell to P3.9 billion in 2018 in terms of net income and from P68.03 billion, it came up to P74.1 billion in terms of revenues. The sales were high but since there were major factors like high fuel prices, the expenses were higher as well. To breakdown the challenging macro environment, Cebu Pacific though that the combination of volatile Philippine peso, unstable fuel prices, rising interest rates, closure of Boracay, and stiff competition affected their performance.