Cebu Pacific on Tuesday reported a P22.2 billion net loss last year from P9.12 billion income in 2019 due to the heavy impact of the unprecedented COVID-19 crisis.
“With health and safety concerns resulting in the decrease of passenger confidence and heightened travel restrictions, CEB’s operational and financial performance were severely affected,” the airline said.
The Gokongwei-led airline posted a total revenue of P22.6 billion last year, 73 percent lower than 2019.
Cargo operations contributed P5.4 billion, or 24 percent of CEB’s total revenues in 2020, as cargo freighter and charter flights contributed to higher yield.
For 2020, Cebu Pacific flew five million passengers, 78 percent lower than 2019; and a total of 41,804 flights, 71 percent lower than 2019.
When the country was placed in Enhanced Community Quarantine (ECQ) in March 19, 2020, the airline’s commercial operations were grounded.
Commercial operations resumed on June, 3 albeit gradually, with most of the Philippines still in General Community Quarantine (GCQ). This resulted in various requirements and processes from local government units, which continue to be a challenge not only for CEB and other airlines, but for the traveling public as well.
Pre-COVID, CEB flew about 400 flights a day. It flew an average of 47 flights a day in the third quarter, to
76 flights a day by December, about 20 percent of pre-Covid levels. This growth was primarily domestic-driven and supplemented by cargo operations, which performed better than expected.
Total operating expenses reduced by 40 percent to P43.4B. Fuel showed the steepest decline, as less flights were coupled with lower fuel cost. Other operating expenses likewise reduced as Cebu Pacific continues its rigorous cost reduction initiatives, including the right-sizing of its network, fleet, and manpower, while improving operational efficiencies through various digitalization efforts.
Amidst severe losses incurred in 2020, the airline raised P12.5 billion through issuance of convertible preferred shares.
In addition, last March 5, the airline signed a P16 billion, ten-year term loan facility with a syndicate of domestic banks, including the Development Bank of the Philippines, Land Bank of the Philippines, Asia United Bank Corporation, Bank of the Philippine Islands, Metropolitan Bank & Trust Company, and Union Bank of the Philippines.
These fundraising initiatives not only provide Cebu Pacific with a cash runway of up to P28.5 billion, but also represent the confidence of its shareholders and these banking institutions in Cebu Pacific playing a vital role in the recovery of the travel industry, and the Philippine economy as a whole