Cebu Pacific said Monday the suspension of domestic and some international flights amid the coronavirus disease 2019 outbreak will have a significant impact on its revenue.
The Gokongwei-led airline said it anticipated “significant revenue” impact during the 30-day quarantine period with the suspension of domestic and some international flights.
The airline said 90 percent of its capacity was affected by the suspension of all Manila-based domestic flights and flights to and from China, Hong Kong and South Korea.
“CEB will continue with flights to and from Cebu and other hubs, to maintain overall connectivity via air transport where operationally feasible,” the airline said.
The airline said it was expecting expenses to be reduced significantly.
“This includes lower fuel consumption, landing, take off and air navigation fees and flight-based repair and maintenance expenses. Lower fuel price adds a cost benefit with lower fuel consumption, but Cebu Pacific also faces increase in refund and rebooking requests,” Cebu Pacific said.
Cebu Pacific said that given the volatile nature of the situation and the uncertainty as to when operating and demand conditions would improve, it would be premature to provide any guidance on full-year impact.
“But in line with its financial framework, Cebu Pacific remains in a very strong position, ending 2019 with a liquid position of over P18 billion in cash and cash equivalents,” it said.
“It also has a conservative net debt to equity level of 1.25x, with long maturity profile, giving it access to short and long term funding. With strong relationship with key suppliers, together with various measures it has undertaken to mitigate risks, CEB believes that it remains a strong and resilient airline despite the adverse impact of COVID-19 outbreak,” Cebu Pacific said.
Harbor Star Shipping Services Inc., meanwhile said, the company reduced fixed costs by 5 percent to 15 percent as internal cost saving measures as it projects a reduced revenue in its harbor assist business.
“We however remain optimistic that the volumes will return since China appears to have controlled the spread of the virus and business will return to normal in the coming months, if not increase to make up for the previous lag in production,” Harbor Star said.
Meanwhile, International Container Terminal Services Inc. said the immediate risks of COVID-19 to its business would come in the form of suspected virus spread.
“Thus, there would be temporary isolation of certain pieces of equipment, a shut-down of the billing areas or other commercial areas, and temporary stoppages of operations to isolate facilities and ensure a safe environment for the continued flow of goods. Macro risks include a reduction in volume at certain facilities due to a general slowdown in trade,” ICTSI said.
ICTSI said the impact of volume slowdowns would be regional in nature and would depend on how global supply chains continued to be affected by COVID-19.
“Our operations in the Philippines and other terminals around the world remain fully operational with no operational disruptions recorded to date. At our flagship facility in Manila, movement to and from the National Capital Region remains unimpeded based on the recently issued regulations by the national government,” ICTSI said.