Cebu Pacific saw its third-quarter loss narrowing slightly as surging passenger revenue and a higher number of flights operated helped the Philippine low-cost carrier. Operating loss for the quarter ended 30 September came in at PHP 6.15 billion, an 8.7 percent year-on-year improvement as compared to the PHP 6.74 billion loss for the same quarter in 2020. Total revenues jumped 61.7 percent to PHP 3.25 billion.
In a press release issued to the Philippine Stock Exchange, Cebu Pacific says the passenger segment revenue was the biggest contributor to the jump, followed by increases from the ancillary and cargo segments respectively. The number of flights operated rose 69 percent as compared to the third quarter of 2020.
Despite the improved operating loss, Cebu Pacific saw its quarterly net loss swelling to PHP 8.2 billion, as compared to PHP 5.54 billion last year. The carrier attributed the higher loss to “the higher peso translation of its US dollar-denominated liabilities this year”.
Cebu Pacific’s chief financial officer Andrew Huang is expecting headwinds from higher fuel prices and a depreciation of the Philippine peso. “We continuously pursue higher aircraft utilization and implement various cost reduction initiatives to ensure we maintain the lowest possible cost amidst an environment of higher fuel prices and peso depreciation,” says Huang.
Nine-month loss at Cebu Pacific grows
On a nine-month basis, the carrier’s operating loss grew 37.3 percent to PHP 18.8 billion. Total revenue for the period fell 52.7 percent year-on-year to PHP 9.15 billion, and that net loss was up 49.8 percent to nearly PHP 22 billion.
Cebu Pacific noted the rising number of COVID-19 cases in the Manila metropolitan region and other provinces earlier this year has led to the implementation of travel restrictions. But with a declining number of reported cases in recent months, it expects a strong recovery in demand.
Cebu Pacific’s cash and cash equivalents as of 30 September 2021 amounted to PHP 11.3 billion, up from the PHP 3.6 billion figure it had on the same date in 2020. The increase in cash amount was from the issuance of $250 million in convertible bonds in May 2021 to private equity firm Indigo Partners, the International Finance Corporation, and its affiliate IFC Emerging Asia Fund.
As of 30 September 2021, Cebu Pacific has a fleet of 73 aircraft, a net reduction of one aircraft as compared to the same date in 2020. It took delivery of two Airbus A321neos and removed three A320ceos. The airline ordered 31 aircraft at the 2019 Paris Airshow.
