Cebu Air net loss hits over P5 billion on low passenger traffic

CEBU AIR, Inc., the listed operator of budget carrier Cebu Pacific, said Wednesday that its net loss for the third quarter of the year widened to P5.54 billion from the P375.67 million loss it had incurred a year earlier, mainly as a result of the continued low passenger traffic amid a global health crisis.

In a disclosure to the stock exchange, Cebu Air said its total revenues for the third quarter dropped 89.4% to P2.01 billion.

Cebu Air’s third-quarter passenger revenues dropped 97.1% to P379.19 million.

The company saw a decrease of nearly 10% to P1.33 billion in its cargo revenues. Ancillary revenues also dropped 92.9% to P296.28 million.

These brought Cebu Air to a net loss of P14.69 billion for the first nine months of the year from the P6.77 billion profit it generated in the same period last year.

The company’s nine-month total revenues declined 69.6% to P19.34 billion.

“The group saw a 71.9% decline in passenger traffic from 16.7 million to 4.7 million driven by lesser number of flights by 66.3% coupled with a 8.7 percentage points decrease in seat load factor from 87% to 79%,” Cebu Air said.

“Lower average fares by 9.2% to P2,537 for the nine months ended September 30, 2020 from P2,794 for the same period last year also contributed to the reduction of revenues,” it added.

The company’s total assets as of Sept. 30 decreased 15.10% to P133.91 billion from its reported total assets of P157.73 billion as of Dec. 31 last year. Its total liabilities declined 11.4% to P37.81 billion.

The company attributed the decrease in its consolidated assets to the “reduced cash balance and the depreciation recognized for its aircraft during the period.”

Cebu Air’s total equity also dropped 33.6% to P29.81 billion as of Sept. 30, from the total equity of P44.90 billion as of Dec. 31, 2019.

Shares in Cebu Air closed 1.68% lower at P44 apiece on Wednesday. — Arjay L. Balinbin