2014 Annual Report-CebuPacific

Who We Are 2

Message to Shareholders 4

Board of Directors 8

Senior Management and Consultants 10

Operating Statistics and Financial Highlights 12

Route Map 14

Our Fleet 16

Our Products 18

2014 Highlights 24

Corporate Social Responsibility 35

Financial Statements 37

2014ANNUAL REPORT

We take responsibility for what we say, the decisions we make, and the actions we take.

ACCOUNTABILITY

We uphold the dignity and individuality of each person. RESPECT

OUR VALUES

EXCELLENCE We strive to be the best in everything we do.

FUN We enjoy our work and provide quality service in a fun-filled manner.

INTEGRITY We are honorable. We do what is right, not what is expedient.

TEAMWORK We value and harness the strengths of each team member. We collaborate and cooperate with each other to achieve our goals.

Cebu Pacific brings people together through safe, affordable, reliableand fun-filled air travel.

We are committed to innovation and excellence in everything we do.

We are an employer of choice providing opportunities for professional and personal growth.

We have a deep sense of family valuesthroughout our airline.

We enhance the quality of life of the communities we serve and are an active partner in our nation’s progress.

We offer our shareholders a fair return on their investments.

OUR MISSION“Why everyone flies.”

OUR VISIONCebu Pacific: The most successful low-cost carrier in the world.

MESSAGE TO SHAREHOLDERS

Dear Shareholders,

The year 2014 was another notable year for all of us, filled with challenges to learn from, and triumphs to celebrate. While the Philippine economy achieved a 6.1% GDP growth, statistics from the Civil Aeronautics Board (CAB) show that the number of Philippine domestic passengers remained flattish at 20.35 million in 2014 from 20.33 million in 2013. The same data showed that international passenger traffic for 2014 grew only 3.4% to 17.9 million from 17.3 million in 2013.

Amidst this backdrop Cebu Pacific stood strong, as we performed well ahead of industry statistics. Your company flew a total of 16.9 million passengers in 2014, an increase of 17.5% over 14.4 million passengers flown in 2013. This allowed us to post P52.0 billion in consolidated total revenues for 2014, 26.8% higher than the P41.0 billion posted in 2013. Our seat capacity grew by 14.8% to 20.1 million, resulting in a healthy 83.9% seat load factor, as we added five Airbus A320 aircraft and three Airbus A330 aircraft in 2014. This brought our total fleet to 52 aircraft at the end of the year.

Ricardo J. RomuloCHAIRMAN

Lance Y. GokongweiPRESIDENT & CEO

CEB maintains dominance in the domestic market.

Domestically, we flew 13.0 million passengers in 2014, up 18.1% from 11.0 million in 2013. We bolstered our domestic network, particularly in Visayas and Mindanao, with more seats during the year resulting to notable passenger growth in areas such as Camiguin, Virac, Tawi-tawi, Siargao and Zamboanga. New domestic routes were also introduced in 2014 such as direct flights from Davao to Bacolod and Cebu to Tandag.

Last March 2014, Cebu Pacific completed the acquisition of 100% of Tiger Airways Philippines (Tigerair Philippines). With Tigerair Philippines, we were able to provide more flight frequencies from Manila to Cagayan de Oro, Davao, General Santos, Butuan, Roxas and Tagbilaran, and from Cebu to Cagayan De Oro and Davao. The acquisition likewise solidified Cebu Pacific’s dominance in the domestic market. By the end of 2014, Cebu Pacific and Tigerair Philippines had the largest combined domestic market share at 60.8%.

We remained the leader on all important metrics, as we continued to fly to the most destinations through the most number of routes, and the most number of flights. At the end of 2014, we flew to 34 domestic destinations through 57 routes and more than 2,100 weekly flights, including 322 domestic weekly flights of Tigerair Philippines.

CEB broadens international reach

Cebu Pacific’s international traffic grew 15.7% to 3.8 million passengers in 2014, as we launched several new international destinations. With the lifting of significant safety concerns by the International Civil Aviation Organization, on the country’s ability to meet global aviation standards, Cebu Pacific started flying four times weekly to Nagoya and daily to Narita in Japan. We also launched new long haul destinations in 2014, including Kuwait, Riyadh, and Sydney. Aside from these new destinations in Japan, Middle East and Australia, we also saw notable passenger growth in Taiwan and Indonesia, while Singapore, Hongkong and South Korea continued to be our largest international markets.

Our international market share posted at 18.7% in 2014 from 17.8% in 2013. It is worthy to note that on international routes we operate, Cebu Pacific garnered a market share of about 23%. Alongside the acquisition of Tigerair Philippines, Cebu Pacific also formed a strategic alliance with Tiger Airways Singapore. Through an interline agreement, both Cebu Pacific and Tiger Airways Singapore are able to provide guests more connections on both networks. Cebu Pacific’s passengers will be able to enjoy seamless connections onto Tigerair’s network in South East Asia and India. Tigerair’s customers, on the other hand, will be able to select from Cebu Pacific’s extensive network in the Philippines and North Asia. In 2014, the US Federation Aviation Administration upgraded the Philippines to Category 1, a rating which allows more Philippine carriers to start flying to the US. In addition, the European Union also welcomed Cebu Pacific to fly European skies, earning the distinction of being the only LCC in the Philippines to receive the EU certification, a testament to the airline’s commitment to safety and full compliance with international aviation safety standards. These are welcome developments for many of us, especially for the millions of Filipinos living and working abroad. These were made possible with the full cooperation of the Philippine government and the Civil Aviation Authority of the Philippines.

CEB recognized by CAPA as Best LCC in Asia-Pacific

We are happy to report that Cebu Pacific was named Asia Pacific Low Cost Carrier of the Year by Center for Aviation (CAPA) at their Aviation Awards for Excellence held last October 2014. The CAPA Awards are independently researched by CAPA’s leading team of analysts, and then selected by an independent international panel of advisors. Receiving this prestigious award is proof of our commitment to efficiently manage our costs to provide the most affordable fares to the public, work even smarter to get our planes off and on the ground on time, and deliver our unique fun service with a warm, caring smile.

Our innovative marketing and distribution strategieswere likewise recognized, as Cebu Pacific receivedthe award Highly Commended as Most Creative Campaign by Airline in the Simplifying Awards for Excellence in Social Media 2014. Our President andCEO Lance Gokongwei received the Airline Personality of the Year award from SKAL International, a worldwide association of travel and tourism professionals promoting global tourismand friendship.

CEB Net Income surged 66.7% to P853 million

We continued to deliver industry leading operating performance, with average daily aircraft utilization of 12.1 block hours/day for our Airbus fleet, and turned our aircraft an average of 6.6 times per day. With this sustained operational efficiency and increase in passenger traffic, consolidated revenues grew 26.8% to P52.0 billion. Consolidated passenger revenues grew 26.9% to P40.2 billion, while consolidated cargo revenues increased 20.6% to 3.15 billion. Ancillary revenue grew the fastest at 28.7% to P8.7 billion. Our average cost per available seat-kilometer (ASK) declined 2.0% to P2.33 driven by various cost initiatives and assisted by a recent decline in fuel prices.

On the back of this notable improvement in revenues and operating expenses, Cebu Pacific posted a consolidated EBITDAR of P12.4 billion, up 41.7% than previous year, and our consolidated pre-tax core net income surged 76.8% to P3.3 billion, from P1.9 billion in 2013. With the recent decline in fuel prices, Cebu Pacific posted fuel hedging losses of P2.4 billion, which brings us to a consolidated net income of P853 million, up 66.7% from P512 million in 2013.

Margins also improved. Cebu Pacific posted EBITDAR margin of 23.9% and EBIT margin of 8.0%, up 2.5 and 2.1 percentage points than previous year, respectively.

Our balance sheet remained healthy. Total assets

as of December 31, 2014 increased to P76.1 billion from P67.5 billion in 2013, as we added five new Airbus A320 aircraft into our fleet. We ended the year with a cash balance of P3.96 billion, while calculated gearing kept our net debt-to-equity level manageable at 1.4x. This robust financial condition will allow us to support further growth.

CEB learns from challenges and shortcomings

In the last part of 2014, we faced an enormous challenge in providing a smooth travel experience to our guests, particularly during the Christmas peak season. Humbled by the trust placed by so many of our countrymen and tourists in our airline, we expressed our commitment to further improve our service standards, including closer coordination with our ground staff and airport personnel. There are lessons to learn as a continuously growing airline, and we have full faith that our team will work even harder to ensure that we provide an improved, comfortable and reliable travel experience to our guests.

Outlook

We enter 2015 with much optimism as we continue to expand our network. Last March 26, 2015, Cebu Pacific started a four times weekly Cebu-Narita service. This is the airline’s fourth route between Japan and the Philippines, and Cebu Pacific is the only low-cost carrier operating this route. Also, last June 4, 2015, Cebu Pacific launched twice weekly direct flights between Manila and Doha, Qatar. Qatar has the third-largest Filipino community in the Middle East and Cebu Pacific is the only Philippine carrier flying between these two cities, serving more Global Filipinos in the Middle East. Finally, with the upgrade of the Philippines’ aviation rating by the US FAA to Category 1, we aim to fly to Guam and Honolulu, Hawaii within the second half of 2015.

We will maintain our disciplined approach in expanding our fleet to reinforce our growth strategies. We ended the year 2014 with 52 aircraft

consisting of five Airbus A330, 29 Airbus A320, ten Airbus A319 and eight ATR 72-500 turboprop planes. Within the first quarter of 2015, we took delivery of two additional, sharklet-equipped Airbus A320 aircraft, as well as our 6th Airbus A330 aircraft, bringing our total fleet to 55 aircraft, with two more Airbus A320 aircraft for delivery in the 2nd half of 2015. We are scheduled to take delivery of 5 more Airbus A320 aircraft between 2016 to 2017.

Earlier this year, Cebu Pacific also signed a forward sale agreement covering the sale of six Airbus A319 aircraft which will be scheduled for delivery between 2015 and 2016. This is in line with Cebu Pacific’s strategy of replacing and upgrading our fleet with the larger, more fuel efficient, and longer range A321 NEO. Our orders for 30 Airbus A321 NEO aircraft are slated to arrive from 2017 to 2021. We take pride in owning one of the youngest fleets in the world with an average age of 4.4 years as of end 2014.

We will likewise continue to implement measures to control our costs, such as building frequencies on existing routes, and maximizing aircraft utilization to spread out fixed expenses. The recent fuel cost decline will help improve overall profitability, allowing us to offer even more affordable fares. Last January 2015, in compliance with a Civil Aeronautics Board Resolution No. 79, mandating all domestic and international airlines operating to and from the Philippines to lift the imposition of fuel surcharges on international and domestic flights, CEB removed its fuel surcharges on all domestic and international flights.

Acknowledgements

Last January 2015, we flew our 100 millionth passenger. We cannot help but feel nostalgic as we remember our first year of operations in1996, where we had flown just 360 thousand passengers. For nearly 20 years, we have made it our mission to bring people together through safe, affordable, reliable and fun-filled air travel. We feel fortunate to have inspired this low fare revolution that has altered the aviation landscape in the Philippines,

and has, in many ways, created a unique and more robust travel culture among the Filipinos.

We would like to thank you, our shareholders, and the members of our Board of Directors for your continued trust and confidence in our Company. Our heartfelt thanks also go to all our loyal passengers, and to our management team, our dedicated employees, suppliers, and business partners. With your support, we are confident that we can sustain our successes, and weather the challenges that arise along the way. It has been an amazing journey so far, but there is still so much more we hope to learn and achieve. We are very excited and hopeful about what lies ahead.

Once again, maraming, maraming salamat po.

Lance Y. GokongweiPRESIDENT AND CEO

BOARD OF DIRECTORS

John L. Gokongwei, Jr. DIRECTOR

James L. GoDIRECTOR

Lance Y. Gokongwei PRESIDENT AND CEO

Frederick D. GoDIRECTOR

Antonio L. GoDIRECTOR

Robina Y. Gokongwei-Pe DIRECTOR

Jose F. BuenaventuraDIRECTOR

Wee Khoon OhDIRECTOR

11*Appointed after December 31, 2014

Passengers carried (‘000)

Available seats (‘000)

Seat load factor

RPK (million)

ASK (million)

Number of sectors flown

Fleet size at period end

16,870

20,110

16,213

20,496

122,994

14,352

17,523

12,927

16,207

115,005

13,255

16,041

11,533

14,173

108,534

INC (DEC)

2 ppts.

% CHANGE

YEARS ENDED DECEMBER 31 2014 VS 2013

KEY OPERATINGSTATISTICS

(Php million)

Total revenues

Total operating expenses

Operating income (loss)

Net income (loss)

Pre-tax core net income

EBITDAR

Total assets

Total liabilities

Equity

Basic/diluted earnings

per share (Php)

52,000

47,843

12,418

76,062

54,523

21,539

41,004

38,600

67,527

46,446

21,082

37,904

35,241

61,414

39,376

22,038

INC (DEC)

10,996

% CHANGE

YEARS ENDED DECEMBER 31 2014 VS 2013

FINANCIALHIGHLIGHTS

QATARDoha

INTERNATIONAL DESTINATIONS Australia (Sydney), Brunei (Bandar Seri Begawan), Cambodia (Siem Reap), China (Beijing, Guangzhou, Shanghai, Xiamen), Hong Kong, Indonesia (Bali, Jakarta), Japan (Nagoya, Narita, Osaka), Kingdom of Saudi Arabia (Riyadh), Korea (Busan, Incheon), Kuwait, Macau, Malaysia (Kota Kinabalu, Kuala Lumpur), Qatar (Doha), Singapore, Taiwan (Taipei), Thailand (Bangkok, Phuket), United Arab Emirates (Dubai), Vietnam (Hanoi, Ho Chi Minh)

DOMESTIC DESTINATIONS Bacolod, Boracay (Caticlan), Busuanga (Coron), Butuan, Cagayan de Oro, Camiguin, Cauayan (Isabela), Cebu, Clark, Cotabato, Davao, Dipolog, Dumaguete, General Santos, Iloilo, Kalibo, Legazpi, Laoag, Manila, Naga, Ozamiz, Pagadian, Puerto Princesa, Roxas, San Jose (Mindoro), Siargao, Surigao, Tacloban, Tagbilaran, Tandag, Tawi-Tawi, Tuguegarao, Virac, Zamboanga

ROUTE MAP AND DESTINATIONS

OUR FLEET

CEB ended 2014 with 52 aircraft comprised of 5 Airbus A330, 29 Airbus A320, 10 Airbus A319, and 8 ATR 72-500 turboprop planes.

AirbusCebu Pacific ended 2014 with 5 Airbus A330, 29 Airbus A320, and 10 Airbus A319 aircraft.

The Airbus A330 has 436 seats, the A320 has 180 seats, and the A319 has 156 seats. Cebu Pacific’s brand-new Airbus A320 is equipped with Sharklets, newly designed wing-tip devices made from light-weight composites which are 2.4 meters tall. Sharklets allow airlines to reduce fuel burn by up to 4% on longer sectors. CEB’s Airbus A320 aircraft are also equipped with the latest avionics from Honeywell, Thales and Rockwell Collins, all global leaders in aviation electronics.

Between 2015 and 2021, Cebu Pacific will take delivery of 9 more brand-new Airbus A320,30 Airbus A321neo, and 1 Airbus A330 aircraft.

Cebu Pacific operates one of the youngest fleets in the world with an average age of 4.41 years as of end 2014.

ATRCebu Pacific has a fleet of 8 ATR 72-500 aircraft manufactured by Avions de Transport Regional (ATR) based in Toulouse, France.

The ATR’s reliability, ease of maintenance, and ability to land on short runways makes it the top choice in the turboprop class. CEB’s ATR aircraft has 72 seats.

Cebu Pacific took delivery of its first ATR aircraft in 2008, to service its Boracay and Laoag flights. CEB has since then expanded its ATR operations to destinations such as Siargao, Busuanga (Coron), and San Jose (Mindoro), among others.

Several ATR aircraft are also based in Cebu to further expand CEB’s inter-island operations.

Lite Fares and Prepaid Baggage Cebu Pacific was the first to introduce Lite Fares, encouraging passengers to carry less baggage by offering fare discounts. At the time of booking, passengers can now pre-purchase baggage allowance to save on time and money at check-in.

Prepaid baggage options range from 15 kilos to 40 kilos. Guests may avail of prepaid baggage at the time of booking until four hours before flight departure.

Aside from lower fares and lighter planes, the Lite Fare product and prepaid baggage options also make the check-in process faster and easier to manage.

CEB Mobile App

Cebu Pacific’s official Mobile App is now available for download on iOS and Android devices to make it even more convenient for guests to book and check-in for their flights while on the go.

CEB Fare Bundles

CEB Fare Bundles offer a simple solution for guests looking to book their travel essentials in one easy step. Different fare options are now available to guests with different travel preferences and requirements: “Fly” is for airfare, “Fly+Bag” is for airfare and baggage allowance, and “Fly+Bag+Meal” is for airfare, baggage allowance, and meal.

CEB Fare Bundles are available for all flights to domestic and international destinations.

OURPRODUCTS

Agent Xpress

Cebu Pacific was the first airline in Southeast Asia to deploy roving airport agents, equipped with tablets and mobile boarding pass printers, to check-in passengers and print boarding passes on the spot. Now available in select Philippine airports, Agent Xpress can help passengers check-in for their flights from 4 hours up to 45 minutes before departure.

Web Check-In

Cebu Pacific was the first airline in the Philippines to provide guests the option to check-in for their flights online. This is available from 72 hours up to four hours before international flight departure, and up to two hours before domestic flight departure.

Kiosk Check-In

CEB Kiosks are conveniently located near Cebu Pacific’s check-in counters in select Philippine airports. Guests may check-in at the kiosk for their flights from four hours up to an hour before departure.

Fast Check-in Options

Mobile Check-In

Guests can check-in via the official Cebu Pacific Mobile App from 72 hours up to four hours before international flight departure, and up to two hours before domestic flight departure.

TravelSure

Cebu Pacific partnered with the Malayan Insurance Co., Inc. to offer TravelSure travel insurance to passengers. TravelSure allows guests from one to 65 years old to travel with peace of mind.

TravelSure covers: • Emergency medical treatment in case of accident or sickness during travel• Unexpected travel circumstances like cancellations or delays due to weather, loss of travel documents or luggage, and other unforeseen events• Personal accidents• Recovery of travel expenses or reimbursement of the unused portion of travel and accommodation expenses• Baggage Protect – an insurance add-on that covers any unforeseen physical loss or damage to checked baggage

Sports Equipment

Guests can avail of Cebu Pacific’s sports equipment handling service for a minimum fee upon booking. This service lets guests bring their own sports equipment to their destination, to avoid spending for equipment rental fees.

Equipment covered by this service include:• Bicycles• Fishing Equipment• Golf Clubs• Scuba/Diving Equipment• Surfboards/Wakeboards• Bowling balls

CEB Transfers

Cebu Pacific and Tigerair Philippines guests can now avail of CEB Transfers, a safe and seamless transfer service from the Caticlan or Kalibo airports to the guests’ hotel or resort in the island of Boracay. The CEB Transfers product is in partnership with Southwest Tours (Boracay), Inc. and is inclusive of government terminal and environmental fees.

CEB Connect

Cebu Pacific guests with connecting flights through Singapore Changi Airport may avail of CEB Connect and simply collect their boarding pass for their onward flight at Transfer Lounge E within the airport’s transit area. With CEB Connect, guests do not need to clear immigration, collect checked-in luggage, and check-in again for their onward flight connections via Singapore.

Seat Selector

Every time guests book a flight online, seats can be selected for a minimum fee. Guests can select Preferred seats for additional leg room and easy access to the aisle. Seats closer to exits are available through the Standard Plus seat option. Standard seats are all other available seats.

Payment Centers

Cebu Pacific guests who are not credit cardholders can book flights through the website and pay via the airline’s payment centers:

• Over-the-counter at Robinsons Bank, Bank of the Philippine Islands, Metrobank, Banco de Oro, and Banco de Oro Remittance Centers in Hong Kong and Macau• Bancnet Online• ATM transactions using Bancnet and Megalink member banks• Robinsons Department Stores• LBC branches• Bayad Centers• SM Department Stores• Cebuana Lhuillier

Paypal

Cebu Pacific is the first airline in the Philippines to offer the global payment platform as a payment option.

CEB Online Shopping

Cebu Pacific forged a partnership with Lazada to offer guests the option to shop in the comfort of their homes or offices.

Cruise

Through Cebu Pacific’s cruise partner, Star Cruises, guests are able to add more fun experiences on trips.

Car Rentals

Beginning June 1, 2015, Cebu Pacific’s official car rental partner is rentalcars.com, offering the best prices and up to 15% savings on guests’ car rental needs in worldwide locations. Rentalcars.com is a booking service working with all major car hire companies all over the world.

CEB passengers can avail of car rental services through touch points within the Cebu Pacific website.

Hotels

Guests can now immediately view and book options for hotel accommodations through our partner Agoda.com on the Cebu Pacific website, while booking for flights. Another hotel partner, TravelBook, provides options for accommodations in local destinations.

m a g a z i n e f o r C e B U P a C i f i C • A P R I L 2 0 1 4

Water way to live5 floating villages from siem reap to Zamboanga

Branch dressing the beauty of downtown tokyo’s parks

R IS CO

RY • JUN

E 2014

M A G A Z I N E F O R C E B U P A C I F I C • J U N E 2 0 1 4

Raising the skatesHOW MICHAEL MARTINEZ

REALIZED A DREAM IN SOCHI

Lake and see A TOUR OF LAGUNA DE BAY'S

ARTISAN ENCLAVES

R IS CO

RY • JUN

E 2014O

UR IS C

PLIMEN

TARY • JU

NE 2014

R IS CO

RY • JUN

E 2014

R IS CO

RY • AUG

UST 2014

M A G A Z I N E F O R C E B U P A C I F I C • A U G U S T 2 0 1 4

What you sewTURNING LAKES OF LOTUS INTO

Relax in Roxas5 WAYS TO

CHILL OUT IN THE CAPIZ CAPITAL

M A G A Z I N E F O R C E B U P A C I F I C • D E C E M B E R 2 0 1 4

Brad with the goodPITT ON FAMILY BLISS, FILM AWARDS AND FAME

Making merry mealsAMY BESA'S GUIDE TO

HOLIDAY HOME-COOKING

R IS CO

RY • DEC

EMBER 2014

Fun Café

Cebu Pacific presents a wide array of food items – sweet and savory snacks, hot meals, and drinks fit for everyone’s tastes. The airline’s buy-in-board menu has new offerings every quarter.

Cebu Pacific branded souvenirs like bags, toys, and travel accessories are also available.

FunShop Inflight Duty Free

The Duty Free service is available on Cebu Pacific’s international flights to and from Manila and Cebu.

A wide range of world-class Duty Free cosmetics, skin care products, fragrances for men and women, jewelry, children’s gifts and chocolates are available in-flight. Brands carried by Cebu Pacific include Estee Lauder, Revlon, Lancome, Calvin Klein, Clinique, Johnnie Walker, and Lego, among others.

CEB Air WiFi

CEB now offers WiFi on its Airbus A330 flights, for as low as USD5. Guests may use their WiFi-enabled devices after take-off, and log on to CEB Air WiFi.

Smile Inflight Magazine

CEB’s Smile Magazine has a readership of over a million per issue. It features destination guides and news across the Cebu Pacific network. Smile also ranked 7th in CNN Travel’s World’s 12 Best Airline Magazines.

Bright Skies for EveryJuan

Cebu Pacific Air and Worldwide Fund for Nature – Philippines (WWF) have been joining forces since 2008 for Bright Skies for Every Juan. This lets travelers contribute to climate change adaptation programs for the Great Philippine Reefs (Tubbataha and Apo Reefs) while booking flights online.

Cargo Services

Cebu Pacific is the preferred air cargo carrier in the Philippines, linking islands together through exchange of goods. It provides competitive, fast, flexible and straightforward air cargo service to an extensive network including individual shippers and cargo agents within the country and overseas.

The Cebu Pacific Air group is the largest domestic cargo carrier with close to 155 million kilos delivered to domestic and international destinations in 2014. It services more than two thousand accounts, tailor-fitting cargo products to the clients’ domestic and international cargo needs. This includes express cargo service, seamless transshipment, and 21 interline partnerships for worldwide reach.

CEB BIZ

CEB BIZ, the airline’s corporate and government sales program, lets companies max out their travel budgets. Book Cebu Pacific Air flights using Sky Partner, and get corporate fares using pre-approved credit lines and transferrable bookings, among other perks.

GetGo is CEB’s newest lifestyle rewards program that allows guests to accumulate points with their Cebu Pacific and Tigerair Philippines flights, as well as with their everyday expenses and transactions with GetGo partners. With enough accumulated points, members may redeem free flights. For more information, guests can visit the GetGo website www.GetGo.com.ph.

2014HIGHLIGHTS

CEB flies 16.9M passengers in 2014Cebu Pacific flew 16.9 million passengers in 2014, an increase of 17.5% from 14.4 million passengers flown in 2013. On average, CEB flights were 84% full during the year. CEB achieved notable passenger growth in both domestic and several international markets, with increased presence in the Middle East and Japan, and entry into Australia.

The Cebu Pacific Air group increased flights to domestic markets, as its newly acquired subsidiary Cebgo, formerly Tigerair Philippines, launched eight domestic routes from its hubs in Manila and Cebu to Butuan, Clark, Cagayan de Oro, Davao, General Santos, Roxas, and Tagbilaran.

In 2014, the airline launched direct non-stop flights from Manila to Kuwait, and Riyadh. CEB also

launched a five times weekly service from Manila to Sydney. These are additional routes to its existing long haul service from Manila to Dubai.

CEB expanded its operations in Japan with the launch of daily services from Manila to Tokyo and a four times weekly service to Nagoya. The airline also increased its flights to Osaka, from thrice weekly to a daily service.

Cebu Pacific and Tigerair make progresswith Interline Agreement

CEB achieved notable passenger growth in both domestic and several international markets

Cebu Pacific and Tigerair, the two largest low-cost carriers in the Philippines and Singapore respectively, made further progress on an interline agreement with the first interline flights available for sale on the Tigerair website from July 23, 2014.Tigerair flights were available on Cebu Pacific’s website from September 2014. With the interline agreement facilitating both domestic and international collaboration between both airlines, Cebu Pacific and Tigerair have created the biggest network of flights from the Philippines to the region.

“Together with Tigerair, we are proud to offer the largest, most extensive low cost network to and from the Philippines. Tigerair’s network

reinforces Cebu Pacific’s strong presence in Asia, and expands our network with new destinations in Bangladesh, Cambodia, China, India, Indonesia, Malaysia, Myanmar, Maldives and Thailand. We look forward to offering our trademark low fares and fun flights to both Cebu Pacific and Tigerair customers,” remarked CEB President and CEO Lance Gokongwei.

“The interline arrangement harnesses the strengths and networks of Tigerair and Cebu Pacific. We look forward to offering greater convenience to customers with the increased flight frequencies, enlarged network and more seamless options for both business and leisure travel,” said Tigerair Chief Operating Officer Ho Yuen Sang.

The only Philippine low-cost carrier operating between the Philippines and Japan, Cebu Pacific is encouraged by recent Japan National Tourism Organization (JNTO) figures indicating that the Philippines is one of its fastest growing source of foreign visitor arrivals.

Philippine visitor arrivals to Japan grew by 129.5% in April 2014, compared to March 2014. For the month of April, visitors from the Philippines grew the most, topping even China.

This was a month after CEB launched direct daily services to Tokyo (Narita) and four weekly services to Nagoya. CEB also operated daily services to Osaka earlier this year.

In May, Philippine visitor arrivals grew by 71.5%, second ranked when it comes to the fastest growth. Japan seeks to achieve its goal of increasing the number of foreign visitors to 20 million, in the run-up to the 2020 Tokyo Olympics.

“With CEB’s new Japan destinations and trademark low fares, those who have always

Filipino tourist arrivals into Japan up by 129% after CEB launches new Japan routes

been interested in traveling to Japan now find themselves able to do so. This amazing growth in Filipino tourist arrivals to Japan is what we call the Cebu Pacific effect. We hope we can continue stimulating traffic not just to Japan, but to the Philippines as well,” said CEB VP for Marketing and Distribution Candice Iyog.

CEB flew over 45,800 passengers to and from Japan for the months of April and May 2014, considered the Philippines’ summer and Japan’s spring months. This translated to a growth of over 480%, compared to the same period last year.

European Commission Lifts Ban on Cebu Pacific

“With CEB’s new Japan destinations and trademark low fares, those who have always been interested in travelingto Japan now find themselvesable to do so.”

Cebu Pacific has been removed from the list of airlines banned from operating in European Union (EU) member countries, as formally announced by the European Commission on April 11, 2014.

“We welcome this development, a testament to Cebu Pacific’s commitment to safety and full compliance with international aviation safety standards. This would not have been possible without the full support of the Philippine government, and especially the Civil Aviation Authority of the Philippines,” said Lance Gokongwei, Cebu Pacific President and CEO.

“This enables Cebu Pacific to continue flying to where the Filipinos are. With nearly a million

Filipinos working in the EU, we look forward to offering CEB’s trademark lowest fares, and the most extensive route network in the Philippines,” added Gokongwei.

“The decision of the European Commission to lift the ban on Cebu Pacific shows the ability of Philippine authorities and business to work with the EU to raise standards and create economic opportunity,” said Julian Vassallo, Chargé d’affaires at the Delegation of the European Union to the Philippines. “Having demonstrated their commitment and capacity to adhere to international standards, we heartily welcome Cebu Pacific to European skies.”

Cebu Pacific announced it will launch its newest flights to the nation where kids rule—KidZania Manila. It is the official airline partner of the first Philippine facility of KidZania, the global leader in children’s educational entertainment. Kidzania Manila is set to open at the Bonifacio Global City in 2015.

Like many adult adventures, the journey to KidZania Manila begins at an airport, the KidZania International Airport. There, kids will check in at Cebu Pacific counters, get their Cebu Pacific boarding passes, and enter KidZania Manila, a child-sized, interactive play city built just for them.

Inside KidZania Manila, children can role-play over 100 exciting careers – from pilots and doctors, engineers and bank tellers, to actors and artists. Establishments that are universal favorites among children who have visited Kidzania in 16 cities all over the world will also be at KidZania Manila –an aviation academy, bank, fire station, hospital, television station, and a variety of other establishments that form the inner-working core of a real city.

Inside the aviation academy, children can train to be a Cebu Pacific pilot or flight attendant. With the help of Zupervisors, the pilots of KidZania can experience taking off and landing an aircraft using state-of-the-art flight simulators. Meanwhile, KidZania flight attendants can learn how to ensure the safety and comfort of their passengers through a safety demonstration and Fun Game, among others.

When they work at different establishments, kids will earn KidZos, the official KidZania currency. They can choose to save or spend these KidZos during their visit.

“Cebu Pacific has always been a staunch advocate of education through travel. Launching our new destination, KidZania Manila, affirms this commitment. A flight is the best way to welcome kids to this exciting, interactive city. Similar to real life, flights can lead to life-changing discoveries and boundless opportunities,” said Cebu Pacific President and CEO Lance Gokongwei.

“We are very excited to partner with KidZania

Cebu Pacific Air to launch flights to KidZania Manilato enable kids to fly, even if it’s just with their imaginations, and give children their Cebu Pacific boarding pass to a fun learning experience,” Gokongwei added.

“A lot of kids dream about becoming pilots and flight attendants. Cebu Pacific is the perfect partner to introduce these kids to a Juan-of-a-Kind learning experience and the joys of ‘traveling’ to a new city,” said Maricel Pangilinan-Arenas, Governor of KidZania in the Philippines and President and CEO of Play Innovations, Inc. “Like Cebu Pacific, we value fun and put a premium on the power of play. We are very thrilled and proud for KidZania Manila to join their list of fantastic destinations.”

KidZania Manila is operated by its exclusive local franchise owner, Play Innovations, Inc. It aims to combine inspiration, fun and learning through role-play for children, empowering them to explore myriad roles, so they can discover their talents and help create a better world.

Maricel Pangilinan-Arenas, KidZania Philippines Governor and Play Innovations, Inc. President and CEO, and Lance Gokongwei, CEB President and CEO, pose with little CEB pilots and flight attendants.

Abrera, champion surfer Luke Landrigan, Internet funnyman Bogart the Explorer, renowned travel writer Jude Bacalso, and volleyball star Gretchen Ho offered tips and cheered for their respective teams through social media.

For their win, Team Tuklas received 12 Cebu Pacific roundtrip tickets to any international or domestic destination. Each team member also brought home a Vaude Sapporo carry-on trolley, Vaude Hogan Ultra-Light Tent, and Canon Powershot SX510HS camera.

Discover AdventureFloyd of Team Tuklas shared that they discovered a stronger passion for adventure during the Juan for Fun Backpacker Challenge. “To be honest, before we joined the challenge, we hadn’t traveled that much. It was actually our first time in Malaysia, Camiguin and the other challenge destinations,” he shared. “Our Juan for Fun experience showed us that there are a lot of beautiful places that are just waiting to be explored, and that’s exactly what we plan to do in the future.”

Team Tuklas adventure coach Paolo Abrera confessed that he was also worried for his team in the beginning. “At first, I wondered if they were up to the challenge, but I realized quickly that I didn’t have to be worried,” Paolo shared. “As it turned out, their ‘lack of experience’ was actually an advantage because they had this great eagerness. They were very open, very enthusiastic to try and discover new things. And since they started out on almost a clean slate, they were not afraid to think out of the box. I’m very proud of them,” he added.

The Cebu Pacific Juan for Fun Backpacker Challenge 2014 is co-presented by Jack ‘n Jill Magic Crackers, with the support of Vaude, Merrell, Canon and the Department of Tourism, and the endorsement of the Commission on Higher Education.

Floyd Patricio, Esme Escoto and Gab Saplagio of Team Tuklas were named the big winners of the Cebu Pacific Juan for Fun Backpacker Challenge Year 3. The UP Diliman Physics majors clinched the top scores in a series of thrilling tasks and adventurous dares, besting four other university teams from across the Philippines.

This year, for the first time ever, Cebu Pacific brought the Juan for Fun teams to an international adventure, as the challenge kicked off in Kuala Lumpur, Malaysia. The nine-day, six-city adventure continued in Bacolod, Cebu, Camiguin and Cagayan de Oro, and culminated in Manila.

During the course of the challenge, the teams were tasked to accomplish the most number of fun and exciting activities in each destination, maximizing their travel allowance of 800 Malaysian Ringgit and PHP35,000. To fully experience the fun of budget travel, they were given the freedom to plan their activities. Special fun challenges prepared by the Department of Tourism and Tourism Malaysia also gave teams the chance to earn extra points and additional prizes.

Making this year’s challenge even more remarkable were the Adventure Coaches, noted personalities known for their love for travelling, who were assigned to mentor each team before they headed to their destination. During the course of the challenge, sportsman and TV host Paolo

UP Physics majors bag first-place winin Cebu Pacific Juan for Fun challenge

One for all, all for Juan. The university teams and adventure coaches Bogart the Explorer, Paolo Abrera, Luke Landrigan, Gretchen Ho and Jude Bacalso enjoyed an awesome adventurein the Cebu Pacific Juan for Fun Backpacker Challenge.

NEW PRODUCTS

Cebu Pacific became the first airline in Southeast Asia to deploy special roaming airport agents, who can check in passengers using a tablet while they are still queuing up. CEB launched the Agent Xpress service at Kalibo Airport on August 25, 2014, just in time for the influx of tourists returning from a long weekend in Boracay. Kalibo is a gateway to the world-renowned island.

Busy Kalibo Airport was prioritized for CEB’s innovative service, due to the high volume of passengers and limited counter space. “Agent Xpress can make the check-in process faster and more convenient for our guests, given space limitations in certain airports. We

are studying the launch of Agent Xpress in other airports as well,” said CEB VP for Marketing and Distribution Candice Iyog.

The Agent Xpress service can check in guests with confirmed flight itineraries, from four hours to 45 minutes before the flight departure. Roaming agents approach guests queuing up for a security screening or at the check-in counter, verify their booking confirmation numbers or name and flight details, and print their boarding passes. Those with no bags for check-in can immediately proceed to the boarding gate. Those with bags for check-in should proceed to the bag drop counters.

CEB launches Agent Xpress check-in service at busy Kalibo airport

Cebu Pacific rolled out its mobile check-in option, an addition to CEB’s fast check-in options: web check-in, self check-in kiosks at the airport, and Agent Xpress (roving airport agents equipped with tablets).

“CEB introduces more check-in options so guests will be empowered to manage their trips. With check-in counter space limitations in airports such as Manila or Kalibo, we encourage more guests to check-in online to avoid the line,” said CEB VP for Marketing and Distribution Candice Iyog.

Its official Cebu Pacific mobile app is now available on the App Store, so guests can check-in using their mobile devices and book their flights on the go. Mobile check-in is available from 72 hours up to four hours for international flights, and up to two hours for domestic flights.

CEB launches mobile check-in optionSeats will automatically be assigned for those with no pre-purchased seat assignments. Boarding passes can be emailed, saved as an image, sent as an MMS or printed straight from the iPhone.

Guests can do mobile check-in for up to 14 passengers. It will be initially available for those with web or mobile bookings only. The mobile check-in service is not available for guests with infants, interline or check-through flights, or those requiring special handling, as they have to go through the usual check-in process.

Those who also wish to book flights can do so using the Cebu Pacific mobile app. CEB and Tigerair Philippines flights, prepaid baggage allowance and seat selection may be booked for up to 14 guests. Only credit cards are accepted for mobile app flight bookings.

NEW ROUTES

Cebu Pacific launched its first Manila-Sydney non-stop flight on September 9, 2014, marking the start of its long-haul service in Australia. The airline is the only low-cost carrier operating the route.

CEB operates four weekly flights between Manila and Sydney, every Tuesday, Thursday, Saturday and Sunday. An additional Wednesday frequency commenced on December 10, 2014, to accommodate travel demand from the growing Filipino community in Australia. As per the Commission on Filipinos Overseas, there are over 300,000 Filipinos based in Australia.

During the send-off program, CEB President and CEO Lance Gokongwei said, “This maiden flight to Australia allows us to share our brand of fun, and provide connections and low fares, to another

Cebu Pacific sends off first flight to Australiapart of the globe. In our short history, we have stimulated travel in Asia and in the Middle East. Eighteen years after the airline’s inception, Cebu Pacific, a proud Philippine carrier, will land in the Australia-Oceania region, and work towards doing the same.”

The maiden flight to Sydney was sent off by CEB President and CEO Lance Gokongwei, Australian Ambassador Bill Tweddell and Department of Tourism Secretary Ramon Jimenez Jr., among other esteemed guests.

CEB’s flights to Sydney utilize the airline’s brand-new Airbus A330-300 fleet with a configuration of 436 all-economy class seats. Its 5th A330 aircraft was delivered brand-new from the Airbus factory in Toulouse, France on September 2, 2014.

CEB Chief Executive Adviser Garry Kingshott and Sydney Airport Managing Director and CEO Kerrie Mather, flanked by CEB and Sydney Airport staff, lead the water cannon salute for CEB’s Airbus A330 aircraft before the Sydney-Manila inaugural flight on September 9, 2014.

Cebu Pacific now flies thrice weekly, non-stop flights from Manila to Kuwait. The maiden flight for Cebu Pacific’s Manila-Kuwait service departed at 9:30PM on September 2, 2014. The airline’ thrice weekly flights from Manila to Kuwait depart every Tuesday, Thursday and Sunday, while flights from Kuwait to Manila depart every Monday, Wednesday and Friday.

Cebu Pacific is the only airline offering non-stop flights to Kuwait, utilizing brand-new Airbus A330-300 aircraft with a configuration of 436 all-economy class seats. It offers fast and convenient same-terminal connecting flights for guests taking advantage of CEB’s extensive Philippine network. Passengers may also opt to purchase baggage allowance, seat selection, CEB Air Wi-Fi connectivity inflight and Hot Meals.

The maiden flight passengers were sent off by CEB VP for Corporate Affairs, Jorenz Tanada, Ambassador Waleed Ahmad Al-Kandari of the Embassy of the State of Kuwait, Department of Foreign Affairs Executive Director Ricardo Endaya, and Department of Tourism Assistant Secretary

Cebu Pacific now flies direct, non-stop flights to KuwaitBenito Bengzon Jr, among other esteemed guests.

“We are proud to offer our kababayans, the fastest, most affordable way to come home. Through Cebu Pacific’s trademark low fares, and direct, non-stop service, we hope that they get to enjoy being around their loved ones more often,” said Alex Reyes, General Manager, Long Haul Division.

Cebu Pacific became the first Philippine low-cost carrier to operate direct daily flights from Manila to Tokyo (Narita), and four times weekly flights from Manila to Nagoya, when it launched the two new

Cebu Pacific launches new flights to Tokyo, Nagoya

(L-R) MIAA General Manager Jose Angel Honrado, Philippine Ambassador to Japan Manuel Lopez, DOTC Secretary Joseph Emilio Abaya, Japanese Ambassador to the Philippines Toshinao Urabe, CEB President and CEO Lance Gokongwei, DOT Assistant Secretary Benito Bengzon, Jr., and Japan National Tourism Organization Executive Director Kazuhiro Ito during the launch of CEB’s flights to Nagoya and Tokyo on March 30, 2014.

Ambassador Waleed Ahmad Al-Kandari of the Embassy of the State of Kuwait, CEB VP for Corporate Affairs Atty. Jorenz Tañada, DFA Executive Director for Migrant Workers Affairs Ricardo Endaya, and DOT Assistant Secretary Benito Bengzon, Jr. are assisted by CEB cabin crew as they cut the ceremonial ribbon during the launch of CEB’s flights to Kuwait on September 2, 2014.

international destinations on March 30, 2014.“We are very excited to finally be able to offer

Cebu Pacific’s trademark lowest fares to these two new destinations in Japan. With our seat sales, seamless Manila airport terminal connection and extensive network, we hope to stimulate travel and bring Japanese tourists to various destinations in fun Philippines,” said Candice Iyog, CEB VP for marketing and distribution.

“Similarly, we hope these two new destinations will enable many Filipinos to explore Japan for leisure or business travel. Japan is now more accessible and more affordable with Cebu Pacific flights,” she added.

On March 30, 2014, CEB launched daily services to Tokyo (Narita), utilizing the airline’s brand-new Airbus A320 fleet. On the same day, CEB also launched its Manila-Nagoya-Manila service with a Tuesday, Thursday, Saturday and Sunday frequency.

CEB announced its direct flights between Cebu and Tokyo beginning March 26, 2015. CEB’s four weekly flights (every Tuesday, Thursday, Saturday and Sunday) between Cebu and Tokyo, utilizes its brand-new Airbus A320 fleet.

“We hope to keep contributing to the national tourism agenda, by providing direct access for Japanese leisure travelers to the island of Cebu. Its strategic location in central Philippines makes it the ideal gateway to beach and eco-adventure destinations in other parts of the country,” said CEB VP for Marketing and Distribution Candice Iyog.

Cebu Pacific to boost PHL-JP traffic with new Cebu-Tokyo route

Japan Tourism Agency Industry Relations Officer for the Philippines Yosuke Togezaki (left) and Cebu Pacific Air Vice President for Marketing and Distribution Candice Iyog (right) share a common goal of promoting travel between the Philippines and Japan.

Cebu Pacific now flies thrice weekly, non-stop flights between Manila and Riyadh. The maiden flight for Cebu Pacific’s Manila-Riyadh service departed at 5:05pm on October 1, 2014.

Cebu Pacific now flies direct, non-stopflights to Riyadh

(L-R) Civil Aviation Authority of the Philippines Deputy Director General II Beda Badiola, Royal Embassy of Saudi Arabia 2ndSecretary Fahad Eid AlRashidy, CEB General Manager, Long Haul Division, Alex Reyes and Department of Foreign Affairs Executive Director for Migrant Workers Affairs Ricardo Endaya, with CEB cabin crew, officially launch Cebu Pacific’s Manila-Riyadh route with a cake-cutting ceremony.

Cebu Pacific is the only low-cost carrier flying between the Philippines and the Kingdom of Saudi Arabia.

CEB’s flights from Manila to Riyadh depart every Wednesday, Friday, and Sunday, while flights from Riyadh to Manila depart every Monday, Thursday and Saturday.

The maiden flight passengers were sent off by CEB General Manager for Long Haul Alex Reyes, Department of Foreign Affairs Executive Director for Migrant Workers Affairs Ricardo Endaya; 2nd Secretary Fahad Eid M. AlRashidy of the Royal Embassy of Saudi Arabia; Civil Aviation Authority of the Philippines Deputy Director General II Beda Badiola; and, Ninoy Aquino International Airport Terminal 3 Manager Octavio Lina, among other esteemed guests.

“Cebu Pacific will keep flying to where the Filipinos are. As we expand our operations in the Middle East, we are proud to offer even more Filipinos in the Kingdom of Saudi Arabia – the fastest, most affordable way to come home,” said Reyes.

CEB offers 27 domestic and international destinations from its Cebu hub, and operates approximately 700 weekly flights. Passengers from the airline’s Cebu hub grew by 9.4% from January to September 2014, compared to the same period last year.

AWARDS

Leading aviation think tank, Centre for Aviation (CAPA) recognized Cebu Pacific as the Asia-Pacific Low-Cost Carrier (LCC) of the Year, during the CAPA Aviation Awards for Excellence held on October 14, 2014 in Singapore.

“Our LCC of the Year has endured a tumultuous period in its home market, but maintained its focus and had the highest operating profit margin in the Asian airline industry,” said CAPA Executive Chairman Peter Harbison. “The carrier has launched a long-haul operation which strategically improves its long-term position by opening up new markets, while quickly responding to the challenges in this segment,” he added.

“The Cebu Pacific team is honored to be

CAPA names Cebu Pacific Air best low-cost carrier in Asia-Pacific

recognized by CAPA. We will continue to approach growth conservatively and responsibly in order to build a sustainable airline business. Ultimately, this sustainability will allow us to expand to more destinations, making our low fares available to more people,” said CEB President and CEO Lance Gokongwei.

Established in 1990, CAPA – Centre for Aviation is the leading provider of independent aviation market intelligence, analysis and data services, covering worldwide developments. CAPA’s Aviation Awards for Excellence are intended to reward airlines and airports that are not only successful, but have also provided industry leadership in adjusting to a new environment.

Cebu Pacific Air Chief Executive Adviser Garry Kingshott (left) receives the Low-Cost Carrier of the Year award from CAPA Executive Chairman Peter Harbison (right). CAPA – Centre for Aviation is the leading provider of independent aviation market intelligence, analysis and data services, covering worldwide developments.

Skal International Makati President Robert Lim Joseph and New World Makati Hotel General Manager Farid Schoucair presented Cebu Pacific Air (CEB) President and CEO Lance Gokongwei with the Airline Personality of the Year award. This was held during the 24th Skal Tourism Personality Awards held on September 5, 2014, in time for the Makati chapter’s 33rd anniversary.

SKAL International is a worldwide association of travel and tourism professionals promoting global tourism and friendship. It is the only international group uniting all branches of the travel and tourism industry. The awards night is an annual event that celebrates the achievements of exemplary individuals in Philippine tourism.

“I have long admired Skal’s efforts to promote camaraderie within the tourism industry, all

over the world. This recognition validates Cebu Pacific’s growth, and shows the interdependent relationship we have, as tourism stakeholders,” said Gokongwei, after he accepted the award.

He noted CEB’s long-haul expansion and growth, with the launch of Kuwait and Sydney in September, and the launch of Riyadh in October. An interline agreement with Tigerair Singapore also provides more destination options for passengers, including Myanmar, India and Maldives through the CEB website.

“Such milestones were achieved because of the patronage of our passengers, now numbering over 90 million; the determination of our team; and the support of all industries interlocked with ours, especially that of the travel and trade,” he added.

Lance Gokongwei named Airline Tourism Personality of the Year

Skal International Makati President Robert Lim Joseph (left) and New World Makati Hotel General Manager Farid Schoucair (right) present CEB President and CEO Lance Gokongwei (center) with the Airline Personality of the Year Award.

CORPORATESOCIALRESPONSIBILITY

The first airline partner of Bangon Tours, Cebu Pacific (CEB), mounted humanitarian flights for stranded passengers in Tacloban and transported cargo to aid victims of Typhoon Yolanda (Haiyan). It remains committed to assist in rehabilitation and tourism efforts with the launch of a special Bangon Tour seat sale in the coming weeks, promoting travel within the Philippines in its marketing materials.

The Bangon Tours Project is an initiative of the Department of Tourism and the Tourism Promotions Board. This project is in line with the

government’s recovery and rebuilding efforts for the victims and survivors of calamities through the promotion of domestic tourism. It is an invitation to the Filipino market to travel within the Philippines during the holiday period (December to February), visit fun destinations, and participate in rebuilding efforts.

Some of the areas featured for Bangon Tours include Ilocos, Manila-Tagaytay, Puerto Princesa, Bicol, Cebu, Davao, Bohol, Iloilo, Boracay, Siargao, and Cagayan de Oro-Camiguin.

CEB partners with PDOT for Bangon ToursRELIEF

CEB Vice President for Marketing and Distribution Candice Iyog (left) and Tourism Promotions Board (TPB) Chief Operating Officer Domingo Ramon Enerio III (right) shake hands after signing the Memorandum of Understanding (MOU) in support of Bangon Tours, a project of the TPB--the marketing arm of the Philippine Department of Tourism (PDOT). The signing was held on January 6, 2014 at the Cebu Pacific Airline Operations Center in Pasay City.

Cebu Pacific announced that the airline no longer accepts carriage of shark fin, beginning July 8, 2014. The airline has formalized a freight policy for immediate implementation and strict compliance across Cebu Pacific stations.

The ban also extends to meals inflight or during corporate events. Cebu Pacific does not serve shark’s fin soup inflight or at corporate events or meals organized and hosted by the airline.

“Cebu Pacific values biodiversity and marine life sustainability. We are banning shark fin carriage effective immediately as we learned that unsustainable shark fishing and our carriage of shark fin is not aligned with CEB’s position on sustainable development. We have been working closely with the World Wide Fund for Nature (WWF) in our efforts to address some of the most pressing environmental concerns including climate change and marine life preservation,” said Atty. Jorenz Tanada, CEB Vice President for Corporate Affairs.

“WWF welcomes this development,” said WWF-Philippines Vice-chair and CEO Jose Ma. Lorenzo Tan. “For several years now, Cebu Pacific passengers have helped fund WWF’s conservation efforts in our two great Philippine reefs - Tubbataha in Palawan and Apo in Mindoro. Cebu Pacific’s decision to make this new counterpart gesture in support of the conservation of Philippine sharks will most certainly help disrupt the transport chains that fuel this highly destructive trade. WWF lauds this decision as a manifestation of Cebu Pacific’s continuing commitment to conserve marine biodiversity and promote sustainable fisheries, here in the Philippines. As we face a climate-defined future, it is the right thing to do.”

WWF estimates 73 million sharks are killed yearly for their fins and flesh. Sharks are apex or top-level predators that keep the stocks of other fish in check. Halting the trade in shark fins can boost the productivity of oceans.

Since 2008, Cebu Pacific had been implementing the Bright Skies for Every Juan program in partnership with the World Wide Fund for Nature (WWF-Philippines). The program allows Cebu Pacific passengers to make donations while booking their flights online. CEB’s website estimates carbon emissions based on air travel duration and guests can opt to donate a small amount based on that estimate, to effectively offset carbon emissions.

Proceeds support community-based climate adaptation projects for Apo Reef and the municipalities of Sablayan, in Occidental Mindoro and Cagayancillo in Palawan. Two of the biggest coral reefs in the country – Apo Reef and Tubbataha Reefs – have now received stronger conservation and rehabilitation efforts, as the program has generated over P25 million since the program started.

Cebu Pacific bans Shark Fin carriageENVIRONMENT

“We have been working closely with the World Wide Fund for Nature (WWF) in our efforts to address some of the most pressing environmental concerns.”

FINANCIALSTATEMENTS

INDEPENDENT AUDITORS’ REPORT

The Stockholders and the Board of DirectorsCebu Air, Inc.2nd Floor, Doña Juanita Marquez Lim BuildingOsmeña Boulevard, Cebu City

We have audited the accompanying consolidated financial statements of Cebu Air, Inc. and itsSubsidiaries, which comprise the consolidated statements of financial position as at December 31,2014 and 2013, and the consolidated statements of comprehensive income, statements of changes inequity and statements of cash flows for each of the three years in the period ended December 31, 2014,and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financialstatements in accordance with Philippine Financial Reporting Standards, and for such internal controlas management determines is necessary to enable the preparation of consolidated financial statementsthat are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on ouraudits. We conducted our audits in accordance with Philippine Standards on Auditing. Thosestandards require that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the consolidated financial statements. The procedures selected depend on the auditor’s judgment,including the assessment of the risks of material misstatement of the consolidated financial statements,whether due to fraud or error. In making those risk assessments, the auditor considers internal controlrelevant to the entity’s preparation and fair presentation of the consolidated financial statements inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the entity’s internal control. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by management, as well as evaluating the overall presentation of the consolidatedfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

SyCip Gorres Velayo & Co.6760 Ayala Avenue1226 Makati CityPhilippines

Tel: (632) 891 0307Fax: (632) 819 0872ey.com/ph

BOA/PRC Reg. No. 0001, December 28, 2012, valid until December 31, 2015SEC Accreditation No. 0012-FR-3 (Group A), November 15, 2012, valid until November 16, 2015

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of Cebu Air, Inc. and its Subsidiaries as at December 31, 2014 and 2013, and theirfinancial performance and their cash flows for each of the three years in the period endedDecember 31, 2014 in accordance with Philippine Financial Reporting Standards.

SYCIP GORRES VELAYO & CO.

Michael C. SabadoPartnerCPA Certificate No. 89336SEC Accreditation No. 0664-AR-2 (Group A), March 26, 2014, valid until March 25, 2017Tax Identification No. 160-302-865BIR Accreditation No. 08-001998-73-2012, April 11, 2012, valid until April 10, 2015PTR No. 4751320, January 5, 2015, Makati City

March 24, 2015

CEBU AIR, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL POSITION

December 312014 2013

ASSETS

Current AssetsCash and cash equivalents (Note 8) P=3,963,912,683 P=6,056,111,803Financial assets at fair value through profit or loss (Note 9) – 166,456,897Receivables (Notes 7 and 10) 1,862,718,419 1,817,816,603Expendable parts, fuel, materials and supplies (Note 11) 679,315,070 711,175,860Other current assets (Note 12) 2,020,471,923 1,281,546,400

Total Current Assets 8,526,418,095 10,033,107,563

Noncurrent AssetsProperty and equipment (Notes 13, 17, 29 and 30) 65,227,125,368 56,412,466,284Investments in joint ventures (Notes 14) 591,339,486 578,824,453Goodwill (Notes 7 and 15) 566,781,533 –Deferred tax assets - net (Note 25) – 112,156,602Other noncurrent assets (Notes 7 and 16) 1,150,594,326 390,636,394

Total Noncurrent Assets 67,535,840,713 57,494,083,733P=76,062,258,808 P=67,527,191,296

LIABILITIES AND EQUITY

Current LiabilitiesAccounts payable and other accrued liabilities (Notes 7 and 17) P=10,668,437,651 P=9,188,899,505Unearned transportation revenue (Notes 4 and 5) 6,373,744,740 5,338,917,236Current portion of long-term debt (Notes 13 and 18) 4,712,465,291 3,755,141,710Financial liabilities at fair value through profit or loss (Note 9) 2,260,559,896 –Due to related parties (Note 27) 39,909,503 44,653,215Income tax payable 5,831,638 10,587,869

Total Current Liabilities 24,060,948,719 18,338,199,535

Noncurrent LiabilitiesLong-term debt - net of current portion (Notes 13 and 18) 29,137,197,374 25,651,323,962Deferred tax liabilities - net (Notes 7 and 25) 129,160,379 –Other noncurrent liabilities (Notes 19 and 24) 1,196,148,149 2,456,090,484

Total Noncurrent Liabilities 30,462,505,902 28,107,414,446Total Liabilities 54,523,454,621 46,445,613,981

Equity (Note 20)Common stock 613,236,550 613,236,550Capital paid in excess of par value 8,405,568,120 8,405,568,120Treasury stock (529,319,321) (529,319,321)Other comprehensive loss (Notes 9 and 24) (131,968,292) (341,650,278)Retained earnings 13,181,287,130 12,933,742,244

Total Equity 21,538,804,187 21,081,577,315P=76,062,258,808 P=67,527,191,296

See accompanying Notes to Consolidated Financial Statements.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of Cebu Air, Inc. and its Subsidiaries as at December 31, 2014 and 2013, and theirfinancial performance and their cash flows for each of the three years in the period endedDecember 31, 2014 in accordance with Philippine Financial Reporting Standards.

March 24, 2015

CEBU AIR, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL POSITION

ASSETS

Current AssetsCash and cash equivalents (Note 8) P=3,963,912,683 P=6,056,111,803Financial assets at fair value through profit or loss (Note 9) – 166,456,897Receivables (Notes 7 and 10) 1,862,718,419 1,817,816,603Expendable parts, fuel, materials and supplies (Note 11) 679,315,070 711,175,860Other current assets (Note 12) 2,020,471,923 1,281,546,400

Total Current Assets 8,526,418,095 10,033,107,563

Noncurrent AssetsProperty and equipment (Notes 13, 17, 29 and 30) 65,227,125,368 56,412,466,284Investments in joint ventures (Notes 14) 591,339,486 578,824,453Goodwill (Notes 7 and 15) 566,781,533 –Deferred tax assets - net (Note 25) – 112,156,602Other noncurrent assets (Notes 7 and 16) 1,150,594,326 390,636,394

Total Noncurrent Assets 67,535,840,713 57,494,083,733P=76,062,258,808 P=67,527,191,296

LIABILITIES AND EQUITY

Current LiabilitiesAccounts payable and other accrued liabilities (Notes 7 and 17) P=10,668,437,651 P=9,188,899,505Unearned transportation revenue (Notes 4 and 5) 6,373,744,740 5,338,917,236Current portion of long-term debt (Notes 13 and 18) 4,712,465,291 3,755,141,710Financial liabilities at fair value through profit or loss (Note 9) 2,260,559,896 –Due to related parties (Note 27) 39,909,503 44,653,215Income tax payable 5,831,638 10,587,869

Total Current Liabilities 24,060,948,719 18,338,199,535

Noncurrent LiabilitiesLong-term debt - net of current portion (Notes 13 and 18) 29,137,197,374 25,651,323,962Deferred tax liabilities - net (Notes 7 and 25) 129,160,379 –Other noncurrent liabilities (Notes 19 and 24) 1,196,148,149 2,456,090,484

Total Noncurrent Liabilities 30,462,505,902 28,107,414,446Total Liabilities 54,523,454,621 46,445,613,981

Equity (Note 20)Common stock 613,236,550 613,236,550Capital paid in excess of par value 8,405,568,120 8,405,568,120Treasury stock (529,319,321) (529,319,321)Other comprehensive loss (Notes 9 and 24) (131,968,292) (341,650,278)Retained earnings 13,181,287,130 12,933,742,244

Total Equity 21,538,804,187 21,081,577,315P=76,062,258,808 P=67,527,191,296

CEBU AIR, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years Ended December 312014 2013 2012

REVENUESale of air transportation services (Note 4) Passenger P=40,188,445,623 P=31,662,949,847 P=29,579,485,272 Cargo 3,146,083,310 2,609,444,919 2,380,938,624Ancillary revenues (Note 21) 8,665,489,377 6,731,701,515 5,944,029,727

52,000,018,310 41,004,096,281 37,904,453,623

EXPENSESFlying operations (Note 22) 26,152,476,007 21,720,929,565 20,017,352,847Aircraft and traffic servicing (Note 22) 4,805,212,489 3,602,807,012 3,433,012,286Repairs and maintenance (Notes 19 and 22) 4,432,437,982 3,825,982,774 3,461,697,220Depreciation and amortization (Note 13) 4,281,525,018 3,454,641,115 2,767,863,860Aircraft and engine lease (Note 30) 3,503,484,521 2,314,859,021 2,033,953,783Reservation and sales 2,153,987,158 1,662,461,815 1,626,314,775General and administrative (Note 23) 1,296,817,694 1,111,945,434 1,075,369,382Passenger service 1,216,740,451 906,057,635 825,480,234

47,842,681,320 38,599,684,371 35,241,044,387

4,157,336,990 2,404,411,910 2,663,409,236

OTHER INCOME (EXPENSE)Equity in net income of joint ventures (Note 14) 96,326,091 119,360,469 54,384,007Interest income (Note 8) 79,927,272 219,619,475 415,770,873Gain on sale on financial assets designated at fair value

through profit or loss and available for salefinancial assets – – 5,764,090

Foreign exchange gains (losses) (127,471,032) (2,063,007,996) 1,205,149,590Interest expense (Note 18) (1,013,241,353) (865,501,445) (732,591,508)Hedging gains (losses) (Note 9) (2,314,241,984) 290,325,093 258,543,810

(3,278,701,006) (2,299,204,404) 1,207,020,862

INCOME BEFORE INCOME TAX 878,635,984 105,207,506 3,870,430,098

PROVISION FOR (BENEFIT FROM)INCOME TAX (Note 25) 25,137,768 (406,738,723) 298,415,835

NET INCOME 853,498,216 511,946,229 3,572,014,263Other comprehensive income (loss) to be reclassified to

profit or loss in subsequent periods:Actuarial gains (losses) on pension liability (Note 24) 301,535,342 (365,149,270) (69,258,478)Provision for (benefit from income tax)

(Notes 24 and 25) 91,853,356 (109,544,781) (20,777,544)

OTHER COMPREHENSIVE INCOME (LOSS),NET OF TAX 209,681,986 (255,604,489) (48,480,934)

TOTAL COMPREHENSIVE INCOME P=1,063,180,202 P=256,341,740 P=3,523,533,329

Basic/Diluted Earnings Per Share (Note 26) P=1.41 P=0.84 P=5.89

CEBU AIR, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

REVENUESale of air transportation services (Note 4) Passenger P=40,188,445,623 P=31,662,949,847 P=29,579,485,272 Cargo 3,146,083,310 2,609,444,919 2,380,938,624Ancillary revenues (Note 21) 8,665,489,377 6,731,701,515 5,944,029,727

52,000,018,310 41,004,096,281 37,904,453,623

EXPENSESFlying operations (Note 22) 26,152,476,007 21,720,929,565 20,017,352,847Aircraft and traffic servicing (Note 22) 4,805,212,489 3,602,807,012 3,433,012,286Repairs and maintenance (Notes 19 and 22) 4,432,437,982 3,825,982,774 3,461,697,220Depreciation and amortization (Note 13) 4,281,525,018 3,454,641,115 2,767,863,860Aircraft and engine lease (Note 30) 3,503,484,521 2,314,859,021 2,033,953,783Reservation and sales 2,153,987,158 1,662,461,815 1,626,314,775General and administrative (Note 23) 1,296,817,694 1,111,945,434 1,075,369,382Passenger service 1,216,740,451 906,057,635 825,480,234

47,842,681,320 38,599,684,371 35,241,044,387

4,157,336,990 2,404,411,910 2,663,409,236

OTHER INCOME (EXPENSE)Equity in net income of joint ventures (Note 14) 96,326,091 119,360,469 54,384,007Interest income (Note 8) 79,927,272 219,619,475 415,770,873Gain on sale on financial assets designated at fair value

through profit or loss and available for salefinancial assets – – 5,764,090

Foreign exchange gains (losses) (127,471,032) (2,063,007,996) 1,205,149,590Interest expense (Note 18) (1,013,241,353) (865,501,445) (732,591,508)Hedging gains (losses) (Note 9) (2,314,241,984) 290,325,093 258,543,810

(3,278,701,006) (2,299,204,404) 1,207,020,862

INCOME BEFORE INCOME TAX 878,635,984 105,207,506 3,870,430,098

PROVISION FOR (BENEFIT FROM)INCOME TAX (Note 25) 25,137,768 (406,738,723) 298,415,835

NET INCOME 853,498,216 511,946,229 3,572,014,263Other comprehensive income (loss) to be reclassified to

profit or loss in subsequent periods:Actuarial gains (losses) on pension liability (Note 24) 301,535,342 (365,149,270) (69,258,478)Provision for (benefit from income tax)

(Notes 24 and 25) 91,853,356 (109,544,781) (20,777,544)

OTHER COMPREHENSIVE INCOME (LOSS),NET OF TAX 209,681,986 (255,604,489) (48,480,934)

TOTAL COMPREHENSIVE INCOME P=1,063,180,202 P=256,341,740 P=3,523,533,329

Basic/Diluted Earnings Per Share (Note 26) P=1.41 P=0.84 P=5.89

ital P

––

ital P

––

ital P

––

CEBU AIR, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIESIncome before income tax P=878,635,984 P=105,207,506 P=3,870,430,098Adjustments for:

Depreciation and amortization (Note 13) 4,281,525,018 3,454,641,115 2,767,863,860Hedging losses (gains) (Note 9) 2,314,241,984 (290,325,093) (258,543,810)Interest expense (Note 18) 1,013,241,353 865,501,445 732,591,508Provision for return cost (Note 19) 476,017,529 590,638,099 577,510,459Unrealized foreign exchange losses (gains) 164,383,293 1,899,060,619 (1,150,415,449)Loss (gain) on disposal of property and equipment

(Note 13) 27,734,209 3,347,242 (413,540)Gain on sale of available for sale financial assets – – (5,764,090)Equity in net income of joint ventures (Note 14) (96,326,091) (119,360,469) (54,384,007)Interest income (Note 8) (79,927,272) (219,619,475) (415,770,873)

Operating income before working capital changes 8,979,526,007 6,289,090,989 6,063,104,156Decrease (increase) in:

Receivables 405,357,069 (444,359,508) (301,781,692)Financial assets at fair value through profit or

loss (derivatives) (Note 9) 112,774,809 226,550,958 111,883,670Expendable parts, fuel, materials and supplies 31,860,790 (270,324,909) (24,648,166)Other current assets (729,957,322) (422,305,919) (599,172,793)

Increase (decrease) in:Unearned transportation revenue 873,405,279 (642,278,678) 727,762,570Accounts payable and other accrued liabilities 325,208,227 737,857,551 1,548,968,993Amounts of due to related parties (4,743,714) (949,100) 9,300,141Noncurrent liabilities (1,452,075,289) (676,902,820) (1,195,414,782)

Net cash generated from operations 8,541,355,856 4,796,378,564 6,340,002,097Interest paid (1,004,857,514) (771,690,630) (729,842,736)Income tax paid (45,043,718) (34,600,186) –Interest received 83,919,430 226,352,282 550,377,733Net cash provided by operating activities 7,575,374,054 4,216,440,030 6,160,537,094

CASH FLOWS FROM INVESTING ACTIVITIESAcquisitions of property and equipment

(Notes 13 and 31) (13,316,719,856) (12,179,883,734) (10,421,612,444)Proceeds from sale (disposals) of:

Other noncurrent assets 115,781,781 1,778,103 1,521,751Property and equipment 338,060 – –Financial assets at FVPL (Note 9) – – 3,258,002,595Available-for sale investments (Note 9) – – 110,369,718

Dividends received from a joint venture (Note 14) 83,811,058 52,292,889 53,229,016Decrease (increase) in other noncurrent assets – (170,123,133) 170,556,445Acquisition of investments:

Investments in joint ventures (Note 14) – – (101,123,645)Payment to acquire a subsidiary (Notes 7 and 31) (488,559,147) – –

Net cash used in investing activities (13,605,348,104) (12,295,935,875) (6,929,056,564)

(Forward)