Cebu Pacific recorded a net loss of P7.298 billion in the first quarter of 2021, 516.9% higher from the same period last year
Cebu Pacific flights “still far behind” normal levels due to restrictions and weak travel demand
Revenues declined 83%, with passenger and ancillary services revenues posting 92.2% and 85.7% decreases, respectively
Cargo revenues rose 30.3% in the first quarter
Cebu Pacific has raised fresh funds of US$250 million from private investors to jumpstart its recovery
Low-cost carrier Cebu Pacific recorded a net loss of P7.298 billion in the first quarter of 2021, which is 516.9% higher than the P1.183 billion net loss sustained for the same period last year, amid ongoing flight restrictions and weak demand for travel.
Revenues from January to March 2021 amounted to P2.709 billion, 83% lower than the P15.914 billion revenues generated in the same period last year.
In a regulatory disclosure, Cebu Pacific said currently, flights are “still far behind its normal activity level due to ongoing flight restrictions and weak demand for travel.”
Passenger revenues in the first quarter of 2020 went down 92.2% to P887.447 million from P11.388 billion earned in the same quarter in 2020.
Cebu Pacific said this was mainly attributable to the 87.5% decrease in passenger volume from 4.4 million to 0.5 million, brought about by lesser number of flights by 75.8% together with a 28.2 percentage points decline in seat load factor from 81.3% to 53.2%. Reduced average fares by 37.5% also contributed to lower revenues.
Cargo revenues, on the other hand, increased by 30.3% to P1.320 billion from P1.013 billion primarily driven by higher yield from chartered cargo services.
Ancillary revenues, meanwhile, dropped 85.7% to P501.719 million from P3.512 billion largely due to lesser passenger volume and flight activity during the first quarter of this year.
Operating expenses were 42.8% lower to P9.493 billion from P16.607 billion last year, mostly driven by the suspension of the group’s operations due to the COVID-19 global pandemic since a material portion of its expenses are based on flights and flight hours.
Cebu Pacific said it has undertaken various measures, including implementing a comprehensive business transformation program, to address the impact of the COVID-19 pandemic on its operational and financial performance.
In a statement on May 10, Cebu Pacific said it has raised fresh funds of US$250 million in the form of convertible bonds from the International Finance Corporation (IFC), IFC Emerging Asia Fund, and Indigo Philippines LLC.
The investment will provide Cebu Pacific with a longer liquidity runway to help the company withstand the effects of the pandemic until economic activity and travel demand recovers. It will also help maintain trade and the competitiveness required to provide affordable transportation in an island nation where maritime transport alone cannot address the connectivity needs of people, goods, and services.
Cebu Pacific president and chief executive officer Lance Gokongwei said the investment will further strengthen the group as it recovers.
The $250 million convertible bonds are part of the $500 million fundraising plan—called the Business Transformation Fundraising Plan—that Cebu Pacific announced last year.
The plan had also included raising additional capital by issuing up to $250 million in new convertible preferred shares. Last March, the airline’s convertible preferred shares were successfully listed on the Philippine Stock Exchange, providing Cebu Pacific with P12.5 billion in fresh capital.
The fundraising aims to enable Cebu Pacific to “navigate the current environment and thrive in the new normal.”
As of March 31, 2021, the group operates a fleet of 74 aircraft in a route network serving 55 domestic routes and nine international routes with a total of 578 scheduled weekly flights. Cebu Pacific gradually recommenced operations last June 3, 2020 when quarantine restrictions were eased. It said it will continue to expand its operations as more local and foreign governments welcome flights into their cities.