Cebu Pacific and its subsidiaries reported a net loss of P9.141 billion for the first six months of 2020 against a P7.145 billion net income in the same period last year.
Revenues reached P17.334 billion, 61.2% lower than the P44.703 billion generated in the same period last year.
The overall decline in revenues started with the cancellation of flights to China, Hong Kong, Macau and South Korea as travel restrictions were imposed to contain the spread of COVID-19, the airline said in regulatory disclosure.
Further, the government-imposed community quarantine last March prompted the group to suspend all its scheduled flights beginning March 19. Previous to this, the airline had operated 78 domestic routes and 25 international routes with a total of 2,717 scheduled weekly flights.
Cebu Pacific said that while sporadic sweeper flights were arranged to assist stranded tourists, the group’s operations were mostly virtually nil until April, when some cargo flights resumed within the Philippines and later to countries like Japan, Thailand, China, Hong Kong.
Commercial passenger operations restarted only last June 3 for domestic flights, and only in a limited capacity.
Passenger revenues dropped 65.5% to P11.507 billion in the first six months of 2020 from P33.352 billion in the same period in 2019.
Cebu Pacific saw a 60.1% decline in passenger traffic from 11.2 million to 4.5 million. This was driven by a 55.6% reduction in flights coupled with a 7.3 percentage points decrease in seat load factor from 87.2% to 80.8%. Lower average fares by 13.6% also contributed to the decline in revenues.
Cargo revenues likewise fell 21.7% to P2.221 billion from P2.836 billion, as volume transported in the first semester of 2020 fell by 52.4%, partially offset by a higher yield from chartered cargo services.
Ancillary revenues decreased 57.7% to P3.606 billion from P8.515 billion due to lower passenger volume and lesser flight activity during the first half of 2020.
Operating expenses in the first six months of the year reached P24.318 billion, lower by 32.2% from the P35.891 billion operating expenses reported year-over-year. This was on the back of suspended operations since a material portion of group expenses is based on flights and flight hours. The appreciation of the Philippine peso and lower fuel prices also contributed to lowering operating expenses.
As of June 30, the group was operating a network serving 25 domestic routes with a total of 290 scheduled weekly flights, as it gradually resumed scheduled services.
Cebu Pacific said it plans to continue to expand its operations as more local governments welcome flights into their cities. It is actively engaged in mitigation measures to cushion the impact of COVID-19 on business operations. These include negotiations with key suppliers and stakeholders on capital expenditure commitments and related cash flows. The airline is also looking into staff right-sizing and further optimization and digitalization of processes.
