Cebu Air, Inc., the operator of Philippine budget carrier Cebu Pacific, swung to an attributable net loss of P6.93 billion in the third quarter of 2026, a sharp reversal from the P485.55-million profit posted a year earlier, as higher fuel costs and foreign-exchange losses outweighed a double-digit rise in revenues.

Consolidated revenues for the July-to-September period rose 14% to P27.66 billion from P24.27 billion, according to the airline's financial disclosure to the Philippine Stock Exchange on Thursday. Operating expenses climbed at nearly twice that pace, increasing 26.9% to P30.96 billion from P24.39 billion.

"The third quarter remained a challenging period, as elevated fuel prices, a weaker peso and broader macroeconomic pressures continued to affect our operations," Cebu Pacific Chief Executive Officer Michael B. Szücs said.

Fuel expenses surged 65% year on year during the quarter, compounding cost pressures even as passenger traffic and revenues expanded. Jet fuel is priced globally in US dollars, exposing Philippine carriers to a dual squeeze when energy costs climb while the peso weakens — precisely the combination management flagged. With spending outstripping income, the carrier recorded an operating loss of roughly P3.3 billion for the period.

Mr. Szücs said the airline was beginning to see signs of improvement in passenger demand and yields, adding that forward bookings for the holiday season and the first quarter of 2027 remained healthy.

"Nevertheless, we are encouraged by the early results of the actions we have taken, including the return to passenger growth. Looking ahead, forward bookings for the holiday season and into first quarter 2027 are healthy, and the ongoing improvement in yields gives us greater confidence in the revenue outlook for the fourth quarter and beyond," he said.

The losses extended into the first nine months of 2026, during which Cebu Air posted an attributable net loss of P12.84 billion, compared with a P9.46-billion profit in the same period of 2025. Consolidated revenues for the January-to-September period rose 9.8% to P96.23 billion from P87.60 billion.

Passenger revenues accounted for the largest share of the nine-month total at P65.31 billion, followed by ancillary revenues of P25.07 billion and cargo revenues of P5.84 billion.

The airline carried nearly 21 million passengers during the nine-month period, up 4% from a year earlier. Domestic traffic reached 15.7 million passengers, while international volume stood at 5.1 million. Cebu Pacific said its domestic market share reached 63% in the third quarter, a commanding position in a Philippine market where air travel links communities across the archipelago.

Nine-month operating expenses grew 24.3% to P99.23 billion from P79.81 billion, outpacing revenue growth. Flying operations remained the largest expense item, jumping 51.5% to P44.13 billion from P29.12 billion. Fuel costs rose 62.4% to P39.1 billion, representing about 39.4% of total operating expenses, a share that shows how heavily airline cost structures are exposed to energy prices.

Repairs and maintenance expenses reached P17.51 billion, while depreciation and amortization amounted to P15.38 billion. Aircraft and traffic servicing expenses stood at P12.41 billion, followed by general and administrative expenses of P3.52 billion, reservation and sales expenses of P3.50 billion, passenger service costs of P2.39 billion, and aircraft and engine lease expenses of P386 million.

The airline also booked net foreign-exchange losses of P5.03 billion for the nine-month period, up from P1.25 billion a year earlier, reflecting the impact of the weaker peso.

Despite the losses, Cebu Pacific is continuing its fleet expansion program. Seven narrowbody aircraft are scheduled for delivery in 2027, in addition to seven deliveries planned for 2026 to support domestic and international operations.

The carrier expects to surpass the 26.9 million passengers it carried in 2025, supported by travel demand and anticipated higher passenger traffic during the holiday season. Into the final stretch of the year, the indicators to track are the same ones that defined the quarter — fuel prices, the peso's path, and whether the yield gains and holiday bookings highlighted by management carry through the peak travel period.

At the local bourse on Thursday, Cebu Air shares fell 75 centavos, or 2.98%, to close at P24.40 apiece.

— with a report from BusinessWorld's Ashley Erika O. Jose

Source: BusinessWorld