Cebu Pacific (CEB) was without a doubt one of the busiest airlines in 2024. In October, the Philippine low-cost carrier signed a landmark purchase agreement with Airbus and RTX’s Pratt & Whitney for up to 152 A321neo aircraft, equipped with Pratt & Whitney GTF engines.
Valued at approximately PHP 1.4 Trillion ($24 billion) based on list prices, the acquisition is the largest commercial order in Philippine aviation history. By the end of 2024, Cebu Pacific received 17 aircraft deliveries, and carried 24.5 million passengers, an increase of 17% from 2023.
AeroTime recently caught up with Cebu Pacific President and Chief Commercial Officer Xander Lao at the airline’s headquarters in Manila for an Executive Spotlight feature.
In this interview, Lao shares the reasons behind Cebu Pacific’s momentous 2024, and what’s in store for the year ahead.
High economic growth rate, young population, and a great location
Lao, who has been Cebu Pacific’s President since 2023, and Chief Commercial Officer since 2021, said that a year and a half’s time of deliberation and planning went into CEB’s historic commercial aircraft order.
Lao credits Philippines’ economic growth as the main reason for the airline’s milestone order and remarkable expansion.
“The Philippines is a country that is the envy of many others in terms of economic growth,” Lao said, adding that the airline expects the Philippines’ 2024 Gross Domestic Product (GDP) growth level of 5.6% to maintain over the next six to seven years.
“Other economies throughout the world are not growing as fast,” Lao continued.
According to the Asian Development Bank’s (ADB) September 2024 Outlook, Southeast Asia is expected to grow by 4.7% in 2025, with the Philippines and Vietnam leading the ASEAN nations in this economic growth.
Another reason that Lao attributed to CEB’s decision for the large aircraft order is the Philippines’ young population. According to a report by the United Nations Population Fund (UNFPA), the Philippines currently has the largest generation of young people in its history.
30 million young people between the ages of 10-24 account for 28% of the Philippine population.
A young population has traditionally shown significant contribution to a country’s labor force, driving economic growth. As the younger generation enter the workforce, they increase the available labor supply, boosting productivity and innovation.
This young population, coupled with a developing middle class, is great for air travel growth, Lao said.
Another factor that proved advantageous to CEB’s development, Lao said, is the Philippines’ unique geographical location.
“We are strategically located between North Asia and Southeast Asia, and if you draw a four-hour flight circle around the Philippines, we are able to service around two billion people,” Lao shared.
Seeing developments in the country and, in particular, at its airport hub in Manila, further encouraged CEB. In early 2024, a private consortium won the bid to operate Manila’s Ninoy Aquino International Airport (MNL).
There are also plans to develop Sangley Point Airport (SGL), currently a domestic airport some 34 kilometers south of Manila, into an operational international hub by 2028.
Development of another international airport (New Manila International Airport), roughly 35 kilometers north of Manila, is also planned to begin by 2028.
Airports outside of Manila, such as Mactan-Cebu International Airport (CEB), Clark International Airport (CRK), Davao International Airport (DVO) and Iloilo International Airport (ILO), have also been further improved and developed and privatized.
“The government is making investments in smaller airports, so we are seeing capacity come in finally,” Lao said.
Creating international hubs outside of Manila
In 2024, Cebu Pacific launched international flights to and from airports outside Manila such as:
Davao International Airport (DVO) to:
- Hong Kong International Airport (HKG)
- Bangkok’s Don Mueang International Airport (DMK)
Iloilo International Airport (ILO) to:
- Hong Kong International Airport
- Singapore’s Changi International Airport (SIN)
Clark International Airport (CRK) to:
- Hong Kong International Airport (HKG)
- Tokyo-Narita International Airport (NRT)
- Singapore Changi Airport (SIN)
- Bangkok Suvarnabhumi International Airport (BKK)
While CEB already operated international flights out of Cebu, Clark, and Iloilo before the COVID-19 pandemic, Lao said that the second half of 2024 allowed the airline to further develop these secondary airports into international hubs.
Dispersing international flights into these airports allows the decongestion of Manila International Airport, which unfortunately takes the spot of ‘world’s worst airport’ on many global lists.
The development of these new international hubs comes as a relief to both locals and inbound international tourists, who are no longer forced to stop or transit in Manila.
This growth has also attracted other international carriers to secure spots in these secondary airports. On January 16, 2025, Singaporean low-cost carrier Scoot, a subsidiary of the Singapore Airlines Group (SIA), announced the launch of flights to Iloilo starting April 2025, using its fleet of Embraer E190-E2 aircraft.
“We at CEB want to be in a position to support the growth of the Philippine economy, and we think that this aircraft order is one way to facilitate air travel,” Lao said.
Sticking to what the airline does best
Cebu Pacific’s current longest route is Manila to Dubai International Airport (DXB), a roughly nine-hour flight on its fleet of A330-900.
Will the airline explore possibilities of expanding beyond Dubai, even by way of codesharing? Most likely not.
“We will stick to what we are good at,” Lao said, pertaining to the airline focusing on its core target market: Filipinos.
Cebu Pacific lights up Dubai’s Burj Khalifa – AeroTime https://t.co/p1kO4OzVdw
— ✈Monica-مونيكا✈️ (@vargasmoni) November 26, 2024
There are around 450,000 documented Filipinos living in Dubai as of November 2024, representing about 21.3% of the city’s population. The large Filipino population makes Dubai an attractive market for CEB, which recently boosted its frequency to the Emirati city to 10 times weekly from daily.
“We are studying other longer routes where there’s a big Philippine base (population), but the majority of our operations internationally are still short-haul. And that’s where our time is mostly spent because we think there’s a lot more value to unlock [in these destinations],” Lao said.
Developing customers’ digital experience
While Cebu Pacific customers won’t be given the option of premium class seats anytime soon, what they can look forward to are improved digital and in-flight meal experiences.
Lao said that in the last few years, the airline invested in improving its digital processes, from buying tickets online or checking in for a flight. However, upgrading to a seamless digital user experience is not a simple task for a country and government that generally still relies on paper documents.
Even though electronic processes may be the norm for many other airlines and countries, the Philippines’ digital development is sorely lagging primarily due to outdated infrastructure and government regulations, lack of high speed and reliable connection, and deficiency in cybersecurity awareness.
“We are one of the few carriers here in the Philippines that really encourage digital processes,” Lao said. “We know the infrastructure is not going to grow as quickly, but we’re trying to make the passenger experience a lot more seamless.”
Cashless payment methods and shifting customer service from phone to chat box are among the things Lao said CEB will continue to develop and invest in.
When it comes to improving the digital experience onboard, Lao said the airline is prioritizing efficient onboard charging and is starting to look at possibilities of in-flight WiFi, as most CEB passengers bring their own entertainment by way of smartphones or tablets.
No business class, but better meals
Despite its outstanding growth, Cebu Pacific is not entertaining the notion of premium seating class.
“If you’re going to ask me if we’re going to invest in business class or maybe in-flight entertainment, probably not,” Lao said.
“We are a low-cost carrier, so we need to make sure we are super focused on that,” he continued. “At the end of the day, what we do offer is making sure that it’s [flights are] affordable, safe, convenient and on time.”
What the carrier has recently invested in is improving its in-flight meal experience for passengers. In December 2024, CEB launched hot meals that can be selected and purchased onboard selected flights.
This is in addition to the usual chips, cup noodles, and pre-purchased onboard meals that the carrier ordinarily offers.
First in Southeast Asia: Sustainability linked loan
In early January 2025, CEB became the first Southeast Asian low-cost carrier to secure a Sustainability-Linked Loan (SLL).
The loan, arranged by Crédit Agricole CIB and structured under a Japanese Operating Lease with Call Option (JOLCO), ties financial incentives to the airline’s ability to meet specific sustainability-related targets.
“If we hit those [targets], then the loan is paid out,” Lao explained.
He added that there’s still a lot more work to be done in this part of the world when it comes to sustainable aviation.
“We know, for example, that Sustainable Aviation Fuel [SAF] is maybe a couple of years away, and I’m being generous. But clearly, we need to start awareness so that governments and other stakeholders support sustainable flying,” Lao emphasized.
Southeast Asia, as a whole, has lagged behind Europe and North America in terms of sustainability efforts and government mandates regarding the use of SAF. In the Philippines, the possibility of SAF production is still being studied.
In October 2024, at the Aviation Summit in Manila, the Philippine government announced its partnership with Airbus to explore the feasibility of SAF production in the country.
Despite the Philippine government’s involvement with SAF production still being in its infancy, Cebu Pacific has demonstrated considerable effort towards sustainable aviation. In 2022, CEB became the first low-cost carrier in Southeast Asia to incorporate SAF in its commercial operations on a Manila to Singapore flight.
In November 2023, CEB operated a Narita to Manila flight powered by SAF, making it the first Philippine carrier to use SAF on a commercial flight from Japan.
Well-prepared to mitigate the effects of supply chain issues
CEB had what Lao calls a “rough patch” a year and a half ago with supply chain constraints. Since then, he said that CEB has taken steps to mitigate the impact of the challenges, which he acknowledged will not go away anytime soon.
Lao mentioned the ways in which CEB is prepared.
“We’ve added more standby aircraft. We probably have more standby aircraft today than we did before COVID-19. We’ve also placed a lot more focus on ground support equipment (GSE), we’ve invested a lot more in spare engines than we’ve had in the past.”
“We think these challenges will be around for the next two to three more years, at least, but it’s incumbent upon us to make sure we deliver the service we promised our customers,” he added.
While Lao acknowledged that it’s “difficult” to be in a place like the Philippines, where access to scarce parts can be harder, he is confident that the CEB team has done a great job in mitigating these challenges.
2025: A high growth year ahead for Cebu Pacific
Because of the remarkable progress and expansion that the airline set in 2024, Lao believes that the percentage of Cebu Pacific’s growth for 2025 will be around “low to mid-20s”.
“Looking back, last year was super busy. We opened 24 new routes, established two new bases in a span of maybe four to six months,” Lao said, contemplating the airline’s productive 2024.
He said that CEB intends to develop and continue a lot of the markets that it started in 2024.
“We opened 24 new routes, not all of those will survive,” Lao said pragmatically. “I’m sure some of them will fall to the wayside.”
All this, he said, is part and parcel of the airline’s growth strategy. Lao said he saw around seven new aircraft deliveries coming for 2025, and shared that he looks forward to CEB’s integration of AirSWIFT, a Philippine boutique airline acquired by CEB late last year.
Lao believes that CEB will be in a high growth phase throughout the year but also acknowledged that most of that growth started in the fourth quarter of 2024.
For Lao, the airline’s goal is to develop and progress the seeds that were planted in 2024. However he was quick to add: “You can’t keep growing for growth’s sake, it has to be sustainable.”
