Cebu Air, operator of budget airline Cebu Pacific, posted a net loss of P7.3 billion in the 1st quarter of 2021, as the Philippines failed to contain COVID-19 cases.
Cebu Air's net loss is 516% higher than the P1.2-billion net loss it sustained in the same period in 2020.
The passage of the Corporate Recovery and Tax Incentives for Enterprises or CREATE law, which lowered corporate income tax to 25%, somewhat helped the airline, as provision for income tax was cut to P149.4 million.
The airline recorded an 83% drop in revenues to P2.7 billion, with passenger revenues falling 92%.
"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 2020 when some cargo flights within the Philippines and eventually to countries like Japan, Thailand, China, Hong Kong recommenced," Cebu Air said in its quarterly report submitted to the Philippine Stock Exchange on Monday, May 10.
While commercial passenger operations resumed in June 2020, passenger volume is still far below normal levels due to weak demand for travel.
Meanwhile, cargo revenues increased by 30% to P1.3 billion, driven by higher yield from chartered cargo services.
Operating expenses were lower by 42.8% to P9.5 billion, while flying operations expenses dropped by 76.7% to P4.7 billion, as Cebu Pacific suspended most of its flights.
Prior to the suspension of its regular flights due to the COVID-19 outbreak, Cebu Pacific operated 78 domestic routes and 25 international routes with a total of 2,717 scheduled weekly flights.
As of March 31, Cebu Pacific only has 55 domestic routes and 9 international routes with a total of 578 scheduled weekly flights.