Cebu Pacific’s recovery ‘still has long way to go’

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BUDGET airline Cebu Pacific’s (CEB) recovery path may still take time even as domestic air travel is slowly picking up.

“We think that the company’s recovery still has a long way to go,” stockbrokerage company COL Financial said in an earnings analysis on the Gokongwei-led airline.

Headwinds continue to threaten the recovery of the airline industry, COL said.

“While we are hopeful that more people will travel in the last quarter of the year, additional headwinds are mounting such as rising jet fuel prices, and possible re-imposition of travel restrictions domestically and abroad,” it said.

Earlier, CEB reported that it managed to narrow down its core net loss in the third quarter of 2021 to P6.4 billion from P7 billion in the same period last year as revenues improved.

The improvement was mainly due to higher passenger revenues.

The company’s core net loss in the first nine months of 2021 reached P20.2 billion, much wider compared to the P14.4 billion core net loss in the comparable period last year.

Revenues increase on higher passenger volumes. CEB’s third quarter revenues grew by 61.7 percent to P3.2 billion mainly due to higher passenger volumes.

“We estimate that operations are still at 20 percent of pre-pandemic levels, roughly the same as the first half of the year as flights remain limited during the third quarter. Moving forward, we expect revenues to improve with the further easing of restrictions and as more destinations open up for tourism. Moreover, the ramp-up of vaccinations should improve confidence in travelling. We expect operations to reach 30 percent of pre-pandemic levels by year end,” COL said of its prospects on CEB.

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