Cebu Air Inc., the operator of Cebu Pacific and Cebgo, said Monday net loss widened by 517 percent in the first quarter because of the impact of COVID-19 crisis.
The airline unit of the Gokongwei Group said net loss amounted to P7.29 billion from January to March, up from P1.18 billion in the same period last year.
Revenues fell 83 percent to P2.71 billion in the first quarter from P15.91 billion a year ago.
“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 in early 2020 due to the imposition of travel restrictions,” CEB said in a statement.
“With the rapid escalation of the situation surrounding COVID-19, the Philippine government implemented a community quarantine which then prompted the Group to suspend all its scheduled flights beginning March 19, 2020,” it said.
Passenger revenues fell 92.2 percent to P887.4 billion from P11.38 billion it earned last year. This was due to the 87.5-percent decrease in passenger volume from 4.4 million to 0.5 million on 75.8-percent decrease in flights and the 28.2-percentage-point decline in seat load factor from 81.3 percent to 53.2 percent.
The company incurred operating expenses of P9.493 billion in the three-month period, lower by 42.8 percent compared to the P16.607-billion operating expenses recorded last year.
This was mostly driven by the suspension of the group’s operations due to the global pandemic as a material portion of its expenses were based on flights and flight hours.
Meanwhile, International Finance Corp., the IFC Emerging Asia Fund and Indigo Philippines LLC, an affiliate of Indigo Partners LLC, invested $250 million in CEB in the form of convertible bonds.
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 recover.
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.
“We view Indigo, IFC, and IFC Emerging Asia Fund not only as capital providers but also long-term partners in driving improvements in the business, as well as accelerating our sustainability agenda,” said CEB president and chief executive Lance Gokongwei.
“This will further strengthen CEB as we recover, so we may continue fulfilling our commitment to improve the lives of people in the communities we serve for a long time to come,” he said.