Cebu Pacific wants to increase its cargo business’s contribution to overall revenue

Cebu Pacific is looking at increasing the contribution of its cargo business to the company's overall top line, banking on the growing logistics sector in the Philippines.

"The business plan is for cargo side to grow faster than the overall passenger side. If we succeed in that then definitely we will grow our contribution to the revenue pie," Cebu Pacific vice president for Cargo Division Alex Reyes told reporters during the launch of its newly converted ATR 72-500s passenger aircraft into a freighter plane on Wednesday in Pasay City.

As of the first half of 2019, Cebu Pacific's passenger revenue stood at P33.25 billion while its cargo revenue amounted to P2.84 billion, growing 17.8% and 6.9% year-on-year respectively.

The passenger business contributed 74.38% while the cargo unit accounted for 6.35% to the carrier's total revenue of P44.7 billion during the period.

"We want to see the continuing growth of the cargo business," Reyes said.

"We're just responding to the demand in the [freight] market," he said.

In 2018, Cebu Pacific tapped Swiss IPR Conversions Ltd. to convert two of its ATR 72-500 passenger aircraft into cargo planes.

Reyes said the second converted aircraft is scheduled to be delivered in September.

The conversion of Cebu Pacific's passenger planes is to support the growing logistics sector as demand for air cargo transport is seen to rise amid the rising e-commerce sector.

"Transport by air is considered the quickest way to move goods from one point to another," Reyes said.

"The growing demand to move perishables quickly, the increasing need for just-in-time production of goods, and the rise of e-commerce has created a massive demand for air freight services," he said. — BM, GMA News