Cebu Air Inc., the operator of Cebu Pacific (CEB), significantly widened its net loss in the first quarter due to the adverse effects of the Covid-19 pandemic.
Based on a disclosure to the stock exchange, Cebu Air posted a net loss of P7.3 billion in the first three months of the year, 516.9 percent higher than the P1.18-billion net loss sustained the year prior.
Its revenues dropped by 83 percent to P2.71 billion from P15.91 billion, as it had to cancel most of its flights due to commercial travel restrictions, while operating expenses stood at P9.49 billion, which is 42.8-percent lower than the P16.61 billion the year prior.
“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 in early 2020 due to the imposition of travel restrictions,” the disclosure read.
Passenger revenues nosedived by 92.2 percent to P887.447 million from P11.39 billion, as passenger volume for the quarter dropped to 500,000 from 4.4 million. Cebu Pacific had to cut the number of its flights by 75.8 percent and reduce its fares by 37.5 percent.
Its ancillary revenues also declined by 85.7 percent to P501.72 million from P3.51 billion due to the drop in passenger volume and flight activity.
Cargo revenues, meanwhile, rose by 30.3 percent to P1.32 billion from P1.01 billion as it offered more chartered cargo services in the first quarter.
Cebu Pacific officials have said that the group is optimistic in its recovery, implementing several capital-raising measures to “provide the company with a longer liquidity runway to help it withstand the effects of the pandemic.”
It recently received a $250-million investment in the form of convertible bonds from IFC, the IFC Emerging Asia Fund, a private equity fund managed by the IFC Asset Management Company, and Indigo Partners, a private equity firm focused on worldwide investments in air transportation.
“We view Indigo, IFC, and IFC Emerging Asia Fund not only as capital providers but also long-term partners in driving improvements in the business, as well as accelerating our sustainability agenda,” said Lance Gokongwei, President and Chief Executive of CEB. “This will further strengthen CEB as we recover, so we may continue fulfilling our commitment to improve the lives of people in the communities we serve for a long time to come.”
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