Coronavirus turbulence: Cebu Pacific loses P1.18 billion in Q1 2020
MANILA, Philippines – Cebu Air, the operator of budget airline Cebu Pacific, posted a net loss amounting to P1.18 billion in the 1st quarter of 2020, as the coronavirus pandemic restricts domestic and international travel.
In a disclosure to the Philippine Stock Exchange on Wednesday, April 29, Cebu Air said the loss is 135.2% lower than the P3.36-billion net income earned in the same period last year.
Total revenues for the period amounted to P15.9 billion, 24.9% lower than the P21.18 billion generated a year ago. (READ: Airlines ask gov't for lifeline as virus leads them to bankruptcy)
"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 during the quarter due to the imposition of travel restrictions," Cebu Air said.
The Gokongwei-led company said it usually rakes in more cash in January and March, as well as April, May, and December, due to various festivals and school holidays.
Passenger revenues plummeted by 27.4% to P4.3 billion from P15.68 billion year-on-year.
Cebu Air said passenger traffic decreased by 16.5% from 5.3 million to 4.4 million.
Cargo revenues also saw a steep decline by 29.7% to P428.7 million from the P1.4 billion during the same period last year.
Operating expenses in the 1st quarter stood at P16.6 billion, 4.2% lower than a year ago due to the suspension of operations.
Repairs and maintenance expenses rose by 13.9% to P2.3 billion due to higher provisions for return costs and operating leases. This was offset by lower flight-based maintenance costs and strengthening of the Philippine peso.
Aircraft and engine lease expenses also rose by 12.4% to P10.65 billion due to a short-term lease of an engine.
General expenses also grew by 12.2% to P99.2 million, as Cebu Air incurred higher information technology-related expenses and various professional fees in relation to its fleet acquisition projects.
Despite the dismal figures, Cebu Air asserted that its balance sheet remains strong.
"There are no events that will trigger direct or contingent financial obligation that is material to the group, including any default or acceleration of an obligation," it said.
The company admitted it cannot provide full-year earnings projections yet, as the pandemic continues to fuel volatility in the economy. – Rappler.com