Cebu Air, Inc.

Total revenue was PHP 33.3 billion, up 10% year over year. Passenger revenue rose 6% to PHP 22.5 billion, ancillary revenue increased 19% to PHP 9 billion, and cargo revenue grew 8% to PHP 1.8 billion. EBITDA was PHP 8.4 billion, up 26%, with EBITDA margin at 25%; EBIT rose 54% to PHP 3 billion with a 9% margin; pretax core income was PHP 1.3 billion, up almost 300%. Net income was a loss of PHP 400 million versus PHP 466 million profit a year ago, driven mainly by PHP 1.8 billion of noncore FX losses. Cash at quarter-end was over PHP 23 billion, net debt was PHP 170.6 billion, and net debt-to-EBITDA was 5.1x. For outlook, management said Q2 seat growth will be slightly below initial guidance at about 11% to 13%, first-half 2026 seat growth is expected at 10% to 12%, and full-year seat growth is now expected at 9% to 11%. CapEx guidance remains PHP 35 billion, of which about PHP 32 billion is aircraft-related.

Michael Szucs emphasized that Cebu Pacific is entering a tougher environment from a position of strength because of its domestic-heavy network, lower-cost fleet, and scale advantages. He said the company is prioritizing disciplined pricing, careful capacity deployment, and strict cost/cash preservation, while still investing for the long term in training, digital systems, and operational capability. His tone was cautious on near-term profitability but confident that the company will be stronger when conditions normalize.

Trina Asuncion focused on the quarter’s operating strength and the balance sheet. She highlighted PHP 11 billion in cash income, PHP 7.8 billion in operating cash inflow after PHP 3.1 billion of working-capital outflows, PHP 5.9 billion of investing outflows, and a quarter-end cash balance above PHP 23 billion. She said capex remains PHP 35 billion, about PHP 32 billion of it aircraft-related, and that the company has committed financing, about PHP 15 billion in local bank lines, and flexibility through unencumbered aircraft and engines; she also noted net debt-to-EBITDA improved to 5.1x despite the FX hit.

Analysts focused on fuel surcharges, hedging, network cuts, capex, and whether the company might need equity to refinance its 2027-style debt concerns. Management said fuel surcharges were raised in phases, reaching around PHP 600 to PHP 1,700 domestically and roughly PHP 2,000 to PHP 7,000 internationally, but would not fully offset higher fuel costs and were already leading to weaker bookings before being recalibrated. They said fuel supply is secured through end-June, with 50,000 barrels hedged at about $120 for Q3, and that Q2 should be loss-making, Q3 seasonally loss-making, while Q4 offers some recovery but likely not enough to offset the year’s losses. On financing, management said debt refinancing would likely be a capital-markets transaction next year, possibly involving an equity-accounted instrument, but that raising equity was not the immediate plan.