Cebu Pacific loses P1.18 billion in Q1

MANILA, Philippines — The country’s largest budget carrier Cebu Pacific incurred a P1.18- billion net loss in the first quarter as travel restrictions brought about by the coronavirus disease 2019 or COVID-19 pandemic started taking its toll on its operations.

Cebu Pacific’s first quarter net loss was a 135.2-percent plunge from the P3.36 billion net income it recorded in the same period last year, listed Cebu Air Inc. said in a stock exchange filing yesterday.

Revenues of the group fell by 25 percent during the three-month period to P15.91 billion from P21.18 billion in the first quarter of 2019.

“The overall decline in revenues was brought about by the impact of the COVID-19 outbreak which started with cancellation of flights to China, Hong Kong, Macau and South Korea in varying periods during the quarter due to the imposition of travel restrictions,” Cebu Air said.

“With the rapid escalation of the situation surrounding COVID-19, the government implemented an enhanced community quarantine over the entire Luzon, which then prompted the group to suspend all its scheduled flights beginning March 19,” Cebu Pacific’s operator said.

Cebu Pacific saw a 16.5 percent year-on-year drop in passenger traffic to 4.4 million, driven by lesser number of flights coupled with a decrease in seat load factor to 81.3 percent.

These resulted in a 27.4-percent decline in passenger revenues in the first quarter to P11.39 billion from last year’s P15.68 billion.

Cebu Pacific said lower average fares of P2,580 during the period also contributed to the reduction of passenger revenues.

For its cargo operations, Cebu Pacific’s revenues likewise went down by 30 percent year-on-year to P1.01 billion following a 20 percent decrease in cargo volume transported with reduced flight operations and a lower cargo yield.

Cebu Pacific has implemented austerity measures which include delaying non-critical projects and programs, a hiring freeze, deferment of some training programs, cancellation of non-essential activities, and restricting overtime to lessen the impact of COVID-19 pandemic on the company.

Cebu Pacific senior management officials have also agreed to take pay cuts to avoid cutting its workforce, but was eventually forced to let go over 150 newly hired cabin crew last March.