MANILA, Philippines — Cebu Pacific, the country’s largest budget carrier, incurred a P9.14 billion net loss in the first half, a sharp reversal of the P7.15 billion net income in the same period last year as revenues were cut by more than half due to travel restrictions brought about by the global pandemic.
“The disruption in the group’s operations due to the repercussions brought about by the COVID-19 crisis had a negative impact on its financial condition and results of operations during the period,” corporate vehicle Cebu Air Inc. said in a stock exchange filing yesterday.
Cebu Pacific reported a 61.2 percent drop in revenues in the first semester to P17.33 billion from P44.7 billion last year.
“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 due to the imposition of travel restrictions,” Cebu Air said.
“With the rapid escalation of the situation surrounding COVID-19, the
Philippine government implemented a community quarantine which then prompted the group to suspend all its scheduled flights beginning March 19,” it said.
The Gokongwei-owned carrier said its operations were virtually zero until April when some cargo flights within the Philippines and eventually to countries like Japan, Thailand, China and Hong Kong restarted.
It said commercial passenger operations restarted only on June 3 for domestic flights, but in a limited capacity.
As a result, passenger revenues of the airline in the first half plummeted by 65.5 percent year-on-year to P11.51 billion as passenger traffic fell from 11.2 million to 4.5 million.
Cargo revenues also declined by nearly 22 percent year-on-year to P2.22 billion, mainly attributable to the decrease in volume transported.
Cebu Air, however, believes it remains a resilient airline despite the adverse impact of the global pandemic.
It is also confident about its ability to raise cash for liquidity needs despite the unprecedented losses incurred as a result of an expected slow recovery from this crisis.
Cebu Pacific is actively engaged in planning and executing various measures to mitigate the impact of the pandemic on its business operations, which include negotiations with key suppliers on capital expenditure commitments and related cash flows, as well as with other suppliers and stakeholders.
The group is further engaged in the planning staff right-sizing in addition to further optimization and digitalization of processes.
“As of June 30, the group also anticipates that the COVID-19 crisis would have a material impact on its net sales, revenues, income from operations and future performance,” Cebu Air said.