MANILA - Cebu Pacific said it is using several strategies to sustain long-term operations, with air travel unlikely to recover until next year.
The airline said it is raising funds via stock rights offer, commercial borrowing, as well as fleet-replacement for long-term cost efficiency, as the pandemic drags on.
Cebu Pacific vice president for Marketing and Customer Experience Candice Iyog said recovery is unlikely for 2021 but operations are ready to adjust once restrictions are lifted.
The earliest possible recovery is "probably in 2022," Iyog said in an online briefing.
The country's largest carrier announced the start of its stock rights offer for 328,947,368 convertible preferred shares for P38 per entitlement right, to raise up to P12.5 billion.
It is also eyeing some P12.5 to P16 billion through debt capital raising or loans via commercial banks, Cebu Pacific finance director Trina Asuncion told reporters in a virtual briefing.
"This has been our latest initiative amidst all the difficulties of course with our financials, in line with the COVID situation. We need to have a lot of fundraising programs," Asuncion said.
"We have one of the most prudent balance sheets. Our net debt-to-equity ratio is quite low," she added.
Cebu Pacific is replacing existing aircraft with more fuel-efficient units to lower the airline's cost per seat, Iyog said.
At least 14 units were flown to Australia and are currently parked for safekeeping. The airline is operating 50 percent of its 73-aircraft fleet, she said.
Operations are now at 23 percent of the airline's pre-COVID network with continued efforts to stimulate demand including its P1 seat sale and the removal of its change fees, she said.
"We haven't really looked at a single solution for the recapitalization effort. There's really multiple, it's because we've looked internally, last year we have to do some difficult decisions... and then now all of this cash-raising, and then there's the stimulating, all of these efforts happening in step when the market is ready," Iyog said.
The government has eased restrictions for travel with COVID-19 tests and quarantine no longer mandatory for domestic travel.
Iyog said according to one study, at least 76 percent of passengers said they plan to travel again this year.
Air travel is "strongly correlated" to increasing economic activity and is crucial in reinvigorating transport and domestic tourism, she said.