Budget airline Cebu Pacific expects to weather the impact of the COVID-19 pandemic despite suffering a major financial loss in the first six months of 2020.
In a stock exchange filing on Wednesday (Aug. 12), listed operator Cebu Air Inc. said it has the means to raise cash to keep its business afloat “even if there were unprecedented losses incurred as a result of an expected slow recovery from this crisis.”
“The group believes that it remains a resilient airline despite the adverse impact of the COVID-19 outbreak,” Cebu Air said, citing a strong balance sheet and equity position during the first semester.
This comes as Cebu Air reported a P9.1 billion loss in the first half of 2020, which included those incurred during the almost three-month lockdown of major cites across the Philippines.
The loss reverses a P7.14 billion profit in the January to June period of 2019.
“While some sporadic arrangements for sweeper flights to assist with stranded tourists did occur, for the most part, the group’s operations were virtually nil until April,” Cebu Air said, citing the start of cargo flights overseas.
“Commercial passenger operations restarted only last June 3 for domestic flights, but in a limited capacity,” it added.
Cebu Air said passenger revenues during the period dropped 65.5 percent to P11.5 billion as passenger traffic fell from 11.2 million last year to 4.5 million in the first semester of 2020.
Average fares also dropped by 13.6 percent as demand vanished.
Cebu Air said cargo and ancillary revenues fell 21.7 percent and 57.7 percent due to the lockdown. Total expenses likewise declined 32.2 percent.
Given reduced demand, Cebu Pacific has cut about 25 percent of its workforce and made a decision last month to send aircraft to the Asia Pacific Aircraft Storage facility in Alice Springs, Australia for long-term storage.
Cebu Pacific has so far stored all seven of its newer A321ceo jets, an A320ceo, two A330s, and four ATR 72-600 aircraft in Australia. It may send more aircraft to Alice Springs “depending on the situation and market demand”, a spokesman earlier said.
Along with other major carriers in the Philippines, Cebu Pacific is seeking the government’s support through loan guarantees and emergency credit lines to help it survive the global coronavirus-induced economic pandemonium.
The International Air Transport Association earlier said it could take another two to three years for the global aviation sector to fully recover from the impact of the COVID-19 pandemic.