By Arjay L. Balinbin, Reporter
Struggling budget carrier Cebu Pacific announced on Friday that it had sent nine of its aircraft to Australia for “indefinite storage” as part of its cost-cutting measures amid the pandemic crisis.
In a virtual media briefing, Candice A. Iyog, Cebu Pacific vice president for marketing and customer service, said the aircraft, which consist of seven Airbus A321CEOs and two A330s, are now at the Asia Pacific Aircraft Storage in Alice Springs, Australia.
She said Cebu Pacific is looking to put more aircraft on indefinite storage. “But it’s still under study given the volatility of market demand and travel restrictions.”
Cebu Pacific, operated by publicly listed Cebu Air, Inc., is currently utilizing about 50% of its fleet on a rotational basis to serve between 40 to 50 flights daily, representing 10% of its pre-pandemic network, which peaked at approximately 420 flights per day, Ms. Iyog said.
The budget airline has a total of 75 aircraft, including those parked in Australia.
Avelino D.L. Zapanta, a Philippine aviation industry expert, has said the low-cost business model is one of the biggest victims of the pandemic.
“The ability to offer low fares was based on reduced operating costs, sustained by huge demand generated by low fares. Without the demand, the low-cost carrier (LCC) equation is drastically skewed. The LCC cannot sustain low fares without low operating costs. Absence of demand makes low fares unsustainable,” he said in a recent e-mail interview.
The budget carrier is set to cut over 800 jobs next month, as it expects travel recovery to happen over a longer period, with the pandemic “negatively impacting” the entire aviation sector.
In March, the company decided to let go of its 150 newly hired flight attendants as reduced flights entail “less opportunity for them to gain in-flight experience.”
The budget airline reported a net profit of P9.12 billion in 2019, sharply higher than the 2018 level, mainly driven by the passenger business, which accounted for revenue of P61.68 billion, up 13.7%.
The company registered a net loss of P1.18 billion in the first quarter of 2020.
On Friday, shares in Cebu Air slipped 0.52% to close at P38.40 each.