Cebu Pacific net loss reached nearly P25 billion in 2021

BUDGET carrier Cebu Pacific (CEB) on Wednesday reported a net loss of P24.9 billion for 2021, widening from a loss of P22.2 billion a year earlier.

The airline “continues to weather through the coronavirus pandemic,” it said in an e-mailed statement.

“CEB generated P15.7 billion in revenues in 2021, 30% below 2020,” it added.

The airline said the decline in revenues was mostly driven by the 50% drop in passenger revenue to P6.3 billion from P12.6 billion in 2020.

“Cargo operations continued to flourish in 2021 as it posted record sales of P6.5 billion, a 20% increase versus 2020,” it noted.

The airline’s total operating expenses fell by 10% to P38.9 billion “despite the higher fuel prices.” It cited the limited flying activities, supported by cost-cutting initiatives such as right-sizing of its network, fleet, and manpower.

“With these, CEB posted an operating loss of P23.2 billion, 12% bigger than the previous year,” the airline noted.

At the same time, the budget carrier incurred non-core losses of P1.12 billion, “driven primarily by higher peso translation of its US dollar debt and mark-to-market losses from the derivative value of its convertible bonds, which were partially offset by P1.4 billion gained from aircraft sale and leaseback transactions.”

The airline said it remained resilient and ensured its long-term sustainability despite the losses.

“Aside from its cost-saving initiatives, [CEB] successfully raised over $1.6 billion from various fund-raising initiatives,” the airline noted.

“This not only allowed for an even longer liquidity runway but also resulted in a stronger balance sheet with cash balance of P19.6 billion, surpassing even the pre-pandemic cash levels.”

The budget carrier sees “strong” domestic demand becoming apparent.

Bookings have been “increasing,” it noted, adding that it anticipates recovery to its pre-COVID domestic capacity levels by the second quarter of the year.

The airline, operated by listed Cebu Air, Inc., said it flew more than 3.4 million passengers last year, 32% lower than the previous year.

“In the first quarter of 2020 alone, before the onset of the air travel lockdown in March 2020, Cebu Pacific flew close to 4.4 million passengers on about 30,000 flights,” it noted.

Cebu Air shares closed 2.60% higher at P43.40 apiece on Wednesday. — Arjay L. Balinbin