CEBU AIR, Inc., the listed operator of budget carrier Cebu Pacific, announced on Tuesday a net loss of P22.2 billion for 2020, mainly due to the “heavy impact” of the global health crisis on its operations.

Cebu Air’s total revenues for 2020 dropped 73% to P22.6 billion, the company told the local bourse.

Its cargo business contributed P5.4 billion or 24% of the total revenues.

The number of passengers it carried last year dropped 78% to five million.

The number of flights was 71% lower at 41,804.

Cebu Air said it closed the year with P20.77-billion operating loss and negative EBITDAR (earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) of P932 million.

The company had total assets of P128.46 billion by end-2020, and its net debt-to-equity ratio was at 3.17x.

Cebu Air’s convertible preferred shares “were successfully listed on the Philippine Stock Exchange on March 29, providing it with P12.5 billion in fresh capital,” it noted.

“In addition, last March 5, the company signed a P16-billion, 10-year term loan facility with a syndicate of domestic banks, including the Development Bank of the Philippines, Land Bank of the Philippines, Asia United Bank Corp., Bank of the Philippine Islands, Metropolitan Bank & Trust Company, and UnionBank of the Philippines,” it also said.

To recall, Cebu Air recorded an income before tax of P10.28 billion for the year ended Dec. 31, 2019, P6.80 billion higher than the P3.48-billion income before tax posted for the year ended Dec. 31, 2018.

Also on Tuesday, Cebu Air announced that its board of directors had approved the company’s employee long-term incentive plan.

Cebu Air would allocate up to a total of 2% of its issued and outstanding common shares to be granted to “eligible employees.”

The purpose of the plan, Cebu Air said, was to create equity interest in the company and foster identification with shareholder interests “toward common goals” by fostering an “ownership culture” in which employees take a “greater interest in the factors driving long-term business success.”

The plan should also increase internal employee retention and improve the total compensation of employees “by allowing eligible employees to build personal wealth through equity value appreciation of the company’s stocks,” it added. — Arjay L. Balinbin