Still reeling from low passenger volumes due to the pandemic, Cebu Air Inc., operator of Cebu Pacific (CEB), bled P21.99 billion in the first nine months of the year, 49.8 percent higher than the losses it incurred in the same period in 2020.
Airline revenues plummeted 52.7 percent to P9.15 billion from January to September, 2021, versus last year’s P19.34 billion.
While commercial passenger operations for domestic flights, restarted last June 3, 2020, it was in a limited capacity.
And even after CEB gradually resumed more regular services, including international flights, it still lagged behind its pre-pandemic activity level due to ongoing flight restrictions and weak demand for travel.
As passenger volumes plunged 60 percent from 4.7 million to 1.9 million in the comparative period, passenger revenues fell 71.9 percent to P3.34 billion.
In addition, average fares went down 30.4 percent to P1,764 pulling down revenues more.
However, as more destinations opened and restrictions eased in the third quarter, flights increased 69 percent to 7,271 and CEB's revenues improved 62 percent to P3.25 billion.
Passenger revenues surged to P1.31 billion, 246 percent higher year-on-year.
This was on the back of a low base in third quarter 2020 when CEB restarted its operations after an air travel suspension which lasted for most of the second quarter, 2020.
Cargo operations continued to supplement CEB's business, contributing P1.45 billion in revenues which rose 9percent while ancillary revenues grew 63 percent year-on-year at P484 million.
Despite the increase in flights, CEB operating expenses for the third quarter grew only 7 percent at P9.4 billion, narrowing CEB’s operating loss to P6.15 billion from P6.74 billion in the same period last year.
“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,” according to Andrew Huang, CEB Chief Finance Officer.
CEB incurred P1.77 billion foreign exchange losses in the third quarter versus a P963 million gain in 2020, primarily from the higher peso translation of its US dollar denominated liabilities this year.
This deepened the company’s net loss to P8.20 billion, versus a P5.54 billion net loss incurred in the same period.
Similar to the second quarter, the National Capital Region (NCR) and several provinces continued to implement various travel restrictions as COVID cases increased together with the overall risk aversion to the Delta variant.
NCR and nearby provinces (NCR+) were placed on Enhanced Community Quarantine (ECQ) lockdown until mid-August, then on Modified ECQ until midSeptember, before relaxing to a GCQ Alert level 4.
Despite these extended restrictions, CEB flew 704,000 passengers in the third quarter, 10% higher than the second quarter.
More recently, with COVID case counts and positivity rates decreasing to levels seen in February 2021, Metro Manila recently de-escalated to Alert level 2, setting the stage for a stronger demand recovery.
CEB has flown nearly two million passengers from January to September on 21,549 flights.
Its domestic network covers 33 destinations, on top of its 10 international destinations.
CEB ended the third quarter with a 73-strong fleet, one of the youngest in the world, which includes two dedicated ATR freighters and one A330 freighter.