Cebu Pacific reports full-year results; air travel to Japan returns to normal - for some


Philippine LCC Cebu Pacific reported a full-year 2010 operating profit of USD147.6 million and net profit of USD158.4 million, more than doubling its results from 2009. The carrier's passenger numbers rose 19.5% while revenue increased 25%. Shares in Cebu Pacific eased 0.1% yesterday, on a mixed day for Asia Pacific airline shares. Virgin Blue and Air Asia both made strong share gains, up 3.2% and 5.1% respectively.

Cebu Pacific financial highlights for the 12 months ended 31-Dec-2010:

  • Revenue: USD665.7 million*, +24.8% year-on-year;
    • Ancillary: USD53.5 million, +10.1%;
  • Operating costs: USD518.1 million, +12.4%;
    • Fuel: USD224.4 million, +33.3%;
  • Operating profit: USD147.6 million, +103.9%;
  • EBITDAR margin: 34.9%, +5.7 ppts;
  • Net profit: USD158.4 million, +112.5%;
  • Passenger numbers: 10.5 million, +19.5%;
    • International: 2 million, n/a;

* Based on the conversion rate USD1 = PHP43.7

Japanese disaster updates:

  • Japan's Immigration Bureau reported the number of foreigners arriving at Tokyo Narita International Airport between 11-Mar-2011, when the earthquake and tsunami struck Japan, and 22-Mar-2011, declined by around 60% year-on-year to 67,000 arrivals. In contrast, foreigners departing Japan over the period increased by around 20,000 to around 190,000 people.
  • Finnair CEO Mika Vehviläinen stated it expects first quarter profits to weaken due to the natural disaster in Japan and conflicts in the Middle East and North Africa, with the apanese disaster expected to affect demand for months.
  • Delta Air Lines CEO Richard Anderson stated the carrier’s operations in Japan are returning to normal.
  • Goodrich Corp CFO Scott Kuechle stated that the company has not seen any reduction in demand for its maintenance and retrofitting services business despite rising oil costs and recent events in Japan;
  • Lufthansa resumed services to Tokyo on 24-Mar-2011 and is also reinstating its daily A340 services from Frankfurt and Munich to Tokyo.
  • China Eastern Airlines board secretary Luo Zhuping stated the travel market will be affected and passenger volumes are likely to drop on its China-Japan routes if nuclear radiation continues to worsen in Japan. He said China Eastern's service to Japan account for 5% to 6% of the carrier's total flights.
  • SAS stated passenger numbers on services to Japan have declined leading the carrier to cancel flights. SAS normally operates six times weekly on the sector, a schedule the company hopes to return to next week. 
  • Association of Asia Pacific Airlines stated events in Japan have had a major effect on regional travel and tourism flows. Overall, Japan represents 6.5% of worldwide scheduled air traffic and accounts for around a fifth of traffic within the Asia Pacific region.

 AAPA reported the following international traffic highlights for its member airlines in Feb-2011:

  • Passenger numbers: 14.7 million, +3.5% year-on-year;
  • Passenger load factor: 76%, -3.0 ppts;
  • Cargo traffic (FTKs): -4.2%;
  • Cargo load factor: 65.7%, -4.0 ppts. 

Selected APAD daily share price movements (% change): 24-Mar-2011

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