Cebu Air Inc Unsp/Adr

Good day, everyone. Cebu Pacific began 2026 on a strong note, delivering solid growth in the first quarter. Total revenue reached 33.3 billion pesos, up 10% year on year, supported by the tail end of holiday peak period and early summer travel. We carried over 7.5 million passengers, up 8%, supported by a 10% increase in seat capacity. Seat load factor remained robust at 83.7%, with improved passenger yields reflecting a resilient travel demand environment and effective commercial execution. Cebu Pacific also continued to outperform the broader Philippine aviation industry. The airline grew its domestic market share to almost 58% and its international market share to 23%, reinforcing its position as the country's leading carrier across both segments. Set scale and leadership advantages enable us to drive lower unit costs, optimize network and capacity deployment, and strengthen bargaining power with suppliers, supporting competitive pricing and operational resilience. Looking ahead, the operating environment in the second quarter has become more complex. Escalating tensions in the Middle East have sharply increased volatility in fuel prices, our largest cost component, and created headwinds for our long-haul operations, while also introducing uncertainty around the overall demand outlook. Amid this volatile environment, we have started taking a more cautious and measured approach, with a clear focus on protecting margins and capitalising on resilient demand. We have adjusted our fares and optimised flight frequencies where appropriate, alongside selective flight cancellations. focusing on routes with high demand. Our network structure provides a natural advantage. Approximately 70% of our seats are deployed to domestic routes, which require significantly less volume than longer sectors. And about 70% of these serve trunk routes, where demand is more stable and not purely leisure-driven. As of March 2026, 73% of Seabed Pacific's jet fleet consisted of NEO aircraft, providing a structural advantage. The Airbus NEO aircraft deliver up to 20% lower fuel burn and CO2 emissions per flight versus the previous generation aircraft. And they average 14% more seats per flight year on year across our A330, A320 and A321 family, providing a natural hedge. More seats per flight also optimise our revenue while reducing fuel costs per seat. Importantly, Cebu Pacific remains committed to our core mission of connecting people by providing an affordable, convenient and reliable service. We continue to optimise revenue by balancing fare levels and seat load factors, adjusting pricing to reflect higher costs, while staying responsive to demand. Management likewise remains prudent, we have implemented measures focused on cost containment and cash preservation, curtailing non-critical spend and actively negotiating supplier contracts. While near-term conditions warrant caution, Cebu Pacific enters this period from a position of strength. The combination of market leadership, a resilient demand base and disciplined execution provide confidence in the airline's ability to navigate volatility. Management remains focused and agile, committed to reinforcing Cebu Pacific's resilience and an evolving operating landscape. Let me now turn it over to Trina to discuss the financial results.

Thanks, Mike. I am pleased to report that Cebu Pacific delivered a solid set of financial results for the first quarter. We generated total revenue of 33.3 billion, a 10% growth year-over-year, supported by a 10% growth in seat capacity. We flew 7.5 million passengers, an 8% increase, resulting in a healthy seat load factor of 83.7%, underscoring resilient demand with effective capacity deployment. Overall passenger yields improved, as a 2% decline in average fares which were impacted by the cancellation of our flights to the Middle East this March, were more than offset by an 11% improvement in ancillary yields. With these, passenger revenue rose 6% year-on-year to $22.5 billion, while ancillary revenue increased 19% to $9 billion. Cargo business continued to grow, enabled by more wide-body aircraft that expanded both weight and size capability. Cebu Pacific carried 58.3 million kilos of cargo, 6.7 million kilos more than last year, partly offset by a 5% decline in yield, likewise affected by canceled shipments to the Middle East. With this, cargo revenue grew 8% year-over-year to $1.8 billion. With revenue of 10%, Cebu Pacific's EBITDA grew 26% year-over-year to $8.4 billion, which expanded EBITDA margin to 25%. Fuel expense, which were reflective of purchases made before the sudden fuel price increase, were lower year-over-year despite the increase in flights. In addition, reduced general expenses, cushioned increases in airport, crew, and maintenance costs stemming from the larger fleet. We've taken delivery of seven aircraft since last year, three of which are wide-bodied, which replaced five smaller aircraft, including two turboprops now held for sale. With these, cost per ASK ex-fuel increased 2% year-over-year to 2.23 pesos, but total cost per ASK remained flat despite the fleet and capacity expansion. As a result, operating income or EBIT rose 54% to 3 billion pesos driving an EBIT margin of 9% and a pre-tax score income of 1.3 billion and almost 300% improvement year-on-year. As geopolitical tensions intensified, global risk aversion accelerated the depreciation of the Philippine peso at the close of the quarter, resulting in non-core forex losses of 1.8 billion pesos per cent, mainly from the translation of our foreign currency debt. As a result, Cebu Pacific closed the quarter with a net loss of 400 million compared to a 466 million net income in the prior year. With a total fleet of 101 aircraft, total assets increased to 265.5 billion pesos, an 800 million increase since start of the year, following the delivery of one Airbus A320neo, the first of seven aircraft deliveries expected this year. Meanwhile, total liabilities rose to 246.8 billion, a 1.1 billion increase driven by higher unearned transport revenue reflecting strong advance bookings for the second quarter. Net debt ended at 170.6 billion, a 1% increase from start of the year, resulting to improved net debt to EBITDA multiple of 5.1 times. While core profits grew strongly, total equity declined modestly to 18.7 billion, a 313 million decrease because of the forex losses. Net debt-to-equity ratio ended at 9.1%. Cebu Pacific ended the first quarter with a strong liquidity position. We generated 11 billion pesos in cash income for the quarter. After outflows for working capital of 3.1 billion, including net interest and tax payments, cash income from operations amounted to 7.8 billion. Cash outflows for investing activities amounted to $5.9 billion primarily for the one aircraft delivery during the quarter and pre-delivery payments or PDPs. Financing activities reported a net outflow of $770 million with additional borrowing for the aircraft delivery and PDPs. Taken together, these movements resulted in a net cash inflow of $1.4 billion ending the first quarter of 2026 with a cash balance of over 23 billion pesos. This liquidity position provides headroom to fund operations, meet obligations, and support strategic initiatives while preserving flexibility to absorb short-term cost pressures. I now turn you over to our President and Chief Commercial Officer, Sanger, to share Cebu Pacific's commercial and operational highlights.

Thanks Trina and good day everyone. Our first quarter performance reflected strong demand ahead of the summer school breaks with Cebu Pacific carrying a record 7.5 million passengers for the quarter. System-wide load factors remained healthy at 83.7%. Domestic traffic grew by 8% to 5.6 million passengers driven by the growth in seats and improved connectivity which sustained domestic mobility. International traffic rose 10% to 1.9 million passengers, supported by recovering inbound tourism, along with the growth of outbound Filipino traffic into places like Japan and China. Cebu Pacific remains the country's largest airline, operating a network of 62 destinations, 36 domestic and 26 international, across 124 routes, 5 hubs, and close to 3,500 weekly flights. As the quarter progressed, however, The operating environment became more complex, driven by the escalation of the Middle East conflict, which pushed fuel prices to record highs. Amid this volatile environment, we have started taking a more cautious and measured approach. We started implementing fare increases starting in the latter part of March, when jet fuel prices exceeded the $200 per barrel mark. Fair increases were implemented in tranches and varied by route. Further adjustments have been made subsequently, including the implementation of higher fuel surcharges. However, given competitive dynamics along with the fact that we operate in a highly price-sensitive market, we will continue to re-evaluate our approach on how we can maximize revenues. We also continue to actively manage our network, ongoing profitability reviews coupled with various sensitivity analysis, have resulted in network adjustments, including some temporary route suspensions and very selective flight cancellations, while focusing on routes with high demand. The priorities remain clear. To optimize revenue and ensure that all flights at a minimum cover its direct operating costs to generate positive contribution margins. This process is continuous and management stands ready to take further network or revenue management actions should this inflated fuel price environment persist. I'm happy to report that SEB once again outperformed its competitors in the first quarter of 2026, maintaining clear leadership in the domestic segment while keeping shares steady in the international market. These gains reflect our disciplined capacity deployment, strong network connectivity, and sustained recovery in passenger demand. For the first quarter of 2026, SEB strengthened its domestic market share to 57.5%. up from 56.9% last year and 57% the previous quarter. International market share likewise improved to 23%. Looking ahead, management is taking a more measured stance, prioritizing prudent network deployment and margin protection amid a persistently volatile fuel and cost environment. Rather than actively pursuing market share expansion, focus remains on disciplined capacity decisions, route-level profitability, and operational resilience. While near-term growth will be calibrated, management remains cautiously optimistic that Cebu Pacific's structurally lower cost base, scale advantages, and improving fleet efficiency will enable the airline to remain resilient through 2026. First quarter on-time performance improved to 79% from 74% last year and 69% in the previous quarter as aircraft movements normalized following the December peak holiday travel. Even modest reductions in airport traffic can improve network reliability by easing runway constraints, improving aircraft rotations, and reducing downstream delays. Our quarterly net promoter score also rose to positive 45, up from positive 31 a year earlier, and marking a new post-pandemic high, while net sentiment remained steady at positive 6. In addition to improved OTP, These reflect the cumulative impact of our investments across the customer's end-to-end travel journey, from digital booking and payment platforms to operational reliability and more consistent service delivery. Taken together, these efforts position Cebu Pacific to sustain improvements in customer experience while supporting long-term demand and brand strength. I now turn you over to our Chief Financial Officer, Mark, to share some insights on our outlook.