CEBU Air, Inc., the listed operator of budget carrier Cebu Pacific, may further reduce its work force as part of efforts to mitigate the impact of the global health crisis on its operations.
“The group believes that it remains a resilient airline despite the adverse impact” of the coronavirus pandemic,” Cebu Air said in its second-quarter report released on Wednesday.
“It is further engaged in the planning [of] staff right-sizing in addition to further optimization and digitalization of processes,” the company added.
Candice A. Iyog, Cebu Pacific vice-president for marketing and customer service, said in March that the budget carrier laid off 30%, or “around 1,300,” of its total work force last year.
The low-cost carrier operator reported P6.5 billion in second-quarter net loss attributable to parent firm equity holders, compared with a net loss of P8 billion in the same period a year earlier.
Total revenues for the quarter surged 128.6% to P3.2 billion from P1.4 billion previously.
Broken down, second-quarter passenger revenue jumped 862% to P1.1 billion, while cargo revenue rose 25% to P1.5 billion. Ancillary revenue surged 495.8% to P557.1 million.
The attributable net loss for the first half of the year was P13.8 billion, compared with a net loss of P9.1 billion in the same period in 2020.
First-half revenues dropped 65.9% to P5.9 billion from P17.3 billion previously.
Passenger revenue for the first six months decreased 82.6% to P2 billion, while revenue from the cargo segment grew 27.3% to P2.8 billion. Ancillary revenue for the period declined 69.4% to P1.1 billion.
Cebu Air expects that the public health crisis would have a “material impact” on its net sales, revenues, income from operations and future performance.
“Given the volatile nature of this situation and the uncertainty as to when operating and demand conditions will improve, it will be premature to provide any guidance with respect to expected impact in succeeding periods,” it noted.
The company’s options to mitigate the impact of the crisis include “negotiations with key suppliers on its capital expenditure commitments and related cash flows.”
“The group’s capital expenditure commitments relate principally to the acquisition of aircraft fleet, aggregating to P162.5 billion and P154.1 billion as of June 30, 2021, and Dec. 31, 2020, respectively,” it said.
Cebu Air is set to take delivery of 16 A330 NEO aircraft, 12 A321 NEO aircraft, 16 A320 NEO aircraft, 10 A321XLR aircraft, and three ATR 72-600 aircraft until 2027.
Cebu Air shares closed 0.44% lower at P45.30 apiece on Wednesday. — Arjay L. Balinbin