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Cebu Pacific bleeding P1.5B per month: Gokongwei drowns in red ink during peak travel season

It was supposed to be the peak travel season for Filipino travelers but the Gokongweis’ budget airline went through a nightmarish first half in 2020 due to the coronavirus lockdowns and panicking consumers.

In a report by Cebu Air Inc., the operator of Cebu Pacific and Cebgo, the 31-year old low-cost carrier reported a net loss of P9.14 billion in the first six months of 2020, which more than wiped out the P7.14 billion profits it made during the same period in 2019.

“The COVID-19 outbreak in January 2020 prompted the Group to suspend its flights to and from China, Hong Kong, Macau and South Korea in varying periods between February and April 2020. As the virus continue to spread, by March 19, 2020, all of the Group’s commercial operations have been grounded due to a government-declared community quarantine,” said Cebu Pacific president and CEO Lance Gokongwei.

Cebu Pacific generally records higher revenues in January, March, April, May and December as most of the country’s festivals and school holidays get filled up during these months.

As of June 30, he said the airline’s operations have been limited to 25 domestic routes (from 78 before the COVID outbreak) and zero international routes (from 25) with weekly flights crash landing to 290 from 2,717 pre-COVID.

Passenger revenues dropped by 65.5 percent to P11.50 billion from P33.352 billion earned in the six months ended June 30, 2019.

Passenger traffic plunged 60.1 percent to 4.5 million this year from 11.2 million a year ago with number of flights down by 55.6 percent and seat load off by 7.3 percentage points to 80.8 percent. Average fares fell 13.6 percent to P2,571 in 2020 from P2,974 a year ago.

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