The budget carrier intends to reduce its employees once more.
CEBU Air, Inc., the mentioned operator of budget carrier Cebu Pacific, recorded sharply higher losses for the first three months of the year on Monday, as the coronavirus pandemic continues to wreak havoc on the aviation industry.
Cebu Air announced a first-quarter net loss attributable to equity investors of P7.30 billion in a statement filed with the stock exchange, more than six times the P1.18 billion reported in the same timeframe in 2020.
Total revenues fell 83 percent to P2.71 billion from P15.91 billion previously, with passenger revenue falling to P887.45 million from P11.39 billion and freight revenue marginally rising to P1.32 billion from P1.01 billion, owing to higher yield from chartered cargo services.
“The net sales loss was caused by the effects of the COVID-19 (coronavirus disease 2019) outbreak,” the firm explained in its filing.
Expenses dropped 43 percent to P4.49 billion in the first year, down from P16.61 billion the previous year.
“This was mostly motivated by the group’s activities being halted owing to the COVID-19 global pandemic, since a significant portion of its costs are dependent on flights and flight hours,” the organization said.
Despite the ongoing global health issue, the company’s arrangements relating to its re-fleeting and growth programs stayed in place as of March 31, this year.
It stated that its capital spending commitments are primarily for the purchase of aircraft fleets totaling P160.25 billion and P154.14 billion, respectively, as of March 31, 2021 and December 31, 2020.
“The company is aggressively preparing and implementing numerous steps to minimize the effect of the COVID-19 global pandemic on its business activities. Negotiations with main vendors on capital spending obligations and associated cash flows, as well as with other suppliers and stakeholders that have an effect on the group’s cash flows, are part of this,” Cebu Air said.
“It is also involved in the preparation [of] workers right-sizing, as well as more workflow transformation and digitalization.”
On Monday, the firm also announced a $250 million convertible bond investment from International Finance Corp., IFC Emerging Asia Fund, and Indigo Philippines LLC.
“The expenditure would provide [Cebu Air] with a longer liquidity runway to support the business survive the impact of the pandemic before economic growth and travel demand recover,” the company said separately.
“It will also assist in maintaining commerce and the competition needed to provide inexpensive transportation in an island nation where maritime transport alone cannot meet the communication needs of individuals, products, and services,” Cebu Air said.