Budget carrier plans cutting workforce anew
CEBU Air, Inc., the listed operator of budget carrier Cebu Pacific, disclosed on Monday significantly bigger losses for the first three months, as the coronavirus pandemic continues to wreak havoc on the aviation sector.
In a statement filed with the stock exchange, Cebu Air reported P7.30 billion in first-quarter net loss attributable to equity holders — at least six times more than the P1.18 billion in the same period in 2020.
Total revenues dropped 83% to P2.71 billion from P15.91 billion previously, with passenger revenue plunging to P887.45 million from P11.39 billion and cargo revenue slightly improving at P1.32 billion from P1.01 billion, which was primarily driven by higher yield from chartered cargo services.
“The overall decline in revenues was brought about by the impact of the COVID-19 (coronavirus disease 2019) outbreak,” the company said in its disclosure.
Expenses fell 43% to P4.49 billion in the first quarter from P16.61 billion in the same period a year ago.
“This was mostly driven by the suspension of the group’s operations due to the COVID-19 global pandemic since a material portion of its expenses are based on flights and flight hours,” the company noted.
The company’s agreements related to its re-fleeting and expansion programs remained in effect as of March 31 this year despite the continuing global health crisis.
It said its capital expenditure commitments relate principally to the acquisition of aircraft fleet aggregating to P160.25 billion and P154.14 billion as of March 31, 2021 and Dec. 31, 2020, respectively.
“The group is actively engaged in planning and executing various measures to mitigate the impact of the COVID-19 global pandemic on its business operations. These include negotiations with key suppliers on capital expenditure commitments and related cash flows, as well as with other suppliers and stakeholders as they impact the group’s cash flows,” Cebu Air said.
“It is further engaged in the planning [of] staff right-sizing in addition to further optimization and digitalization of processes.”
The company also reported on Monday that it had secured a $250-million investment in the form of convertible bonds from International Finance Corp., IFC Emerging Asia Fund, and Indigo Philippines LLC.
“The investment will provide [Cebu Air] with a longer liquidity runway to help the company withstand the effects of the pandemic until economic activity and travel demand recovers,” it said in a separate statement.
“It will also help maintain trade and the competitiveness required to provide affordable transportation in an island nation where maritime transport alone cannot address the connectivity needs of people, goods, and services,” Cebu Air added.
Cebu Air shares closed 1.14% higher at P48.80 apiece on Monday. — Arjay L. Balinbin