CEBU Air Inc. (CEB) is reviewing its long-term fleet plan taking into account the impact of the new coronavirus disease 2019 (COVID-19) pandemic to its overall operations as well as future travel demand.
In a statement, CEB said it has begun discussions with suppliers on this overall fleet plan and schedule, to establish flexibility to adapt to current events.
From 2020 to 2026, CEB is set to take delivery of 62 aircraft comprised of 27 Airbus A321 NEO, three ATR 72-600, one ATR 72-500 freighter, 16 A330 NEOs and 15 A320NEO family aircraft.
“CEB is also undertaking an overall review of our long-term fleet plan, notwithstanding that CEB already has a very conservative fleet growth plan compared to other low-cost carriers in the industry, with a five-year estimated growth of only 8-9 percent,” the airline said.
For this year, the airline said it remains focused on reducing costs and preserving cash liquidity and flexibility.
Efforts include deferral of previously planned aircraft capital expenditures which goes in line with lower anticipated aircraft utilization, as well as special selection and prioritization of non-aircraft capex, reducing capex budget targets from P28 billion to P13 billion.
“We have likewise started discussions with government, seeking support through grants and loans alongside fee waivers and regulatory relief,” said Lance Gokongwei, CEB president and chief executive officer.
CEB said the first quarter 2020 ended differently, due mainly to the challenges brought by COVID-19.
The airline said quarantine and travel restrictions within the Philippines, as well as in some of its international destinations, prompted the CEB management team to make the difficult decision to suspend all passenger flights in mid-March.
As of May 2020, CEB had canceled over 26,400 flights due to the COVID-19 pandemic.
In the first quarter of 2020, total flights flown was 15 percent lower versus comparable period in 2019, while passengers flown declined 17 percent year-on-year to 4.4 million. This has caused a 25 percent reduction in revenues to P15.9 billion and a net loss of P1.18 billion in the first quarter, a 135 percent negative turnaround from the same period last year, CEB said.
As of April 19, 2020, forward bookings for the next five months showed 14 percent of seats sold, versus 28 percent of seats sold in same period last year, driven by CEB’s upcoming flight cancellations together with likely decline in overall travel demand.
Prior to the suspension of all its scheduled flights beginning March 19, 2020, when
the Philippine government implemented an enhanced community quarantine over the entire Luzon and other areas in the Philippines in line with the COVID-19 outbreak, the group operated 2,717 scheduled weekly flights.
CEB reported a net loss of P1.183 billion in the first quarter, compared with P3.356 billion net income earned in the same period last year, due to the impact of the COVID-19.
CEB’s revenues declined by 24.9 percent to P15.9 billion in the first quarter, from P21.1 billion last year, which it attributed to the drop in revenues in passenger, cargo and ancillary business.
The airline operates a fleet of 76 aircraft, with average aircraft age of approximately 5.18 years as of end March this year.
