Airline CEO Michael Szucs said they’re reviving pandemic-era austerity measures as Cebu Pacific braces for a brutal third quarter — traditionally the airline’s lean season, now made worse by soaring fuel costs hitting both demand and profitability.
“We’re not after any medals for this,” Szucs told editors and reporters on Monday. “We’re asking other people to volunteer and help us out so we need to do our bit as well as the leaders".
The cuts could reach as much as 50 percent for senior management and company directors and may run through November this year.
Cash defense
Cebu Pacific is also offering voluntary unpaid leave to employees, including pilots, cabin crew and frontliners, as the Gokongwei-led carrier races to preserve cash amid mounting industry pressures.
These leaves could range from two weeks to as many as 45 days.
“We’re not enforcing anything,” Szucs explained.
Cebu Pacific swung to a P400-million first-quarter net loss from a P466-million profit a year earlier on higher costs and foreign exchange losses.
Cebu Pacific lowers 2026 target
Earlier this month, management announced listed parent Cebu Air Inc. (CEB) will suspend all dividend payments this year, including preferred shares and potential payouts for common shareholders.
The airline was also targeting to grow passenger volume by as much as 15 percent this year but is now cutting back targets to about 10 percent.
CEB shares jumped 3.3 percent to P31.30 each on Monday, paring losses this year to about 2.8 percent.
Keeping services stable, losses minimized
“I think what’s important for us, given the structural advantages that we have, is can we operate a network that provides a positive contribution,” Xander Lao, Cebu Pacific president and chief commercial officer, said during the same interview.
“It’s all about trying to minimize the losses that we have today and making sure that we offer a stable service,” he added.
Lao said their younger, more fuel-efficient Airbus NEO fleet, dominant domestic network and strong liquidity buffer leave it better positioned than rivals to weather the fuel shock despite mounting pressure on profitability.
Riding out the crisis
Meanwhile, the busy summer travel season offered little protection because a large portion of tickets had already been sold months earlier at lower assumed fuel costs, leaving airlines like Cebu Pacific unable to fully pass on the spike to passengers.
Still, Szucs remains confident they can ride out the pressure given its robust liquidity and dominant market position.
“This is nowhere near as bad as the pandemic, [but] this is a situation that clearly is going to hurt us. It’s going to hurt the balance sheet, but we will last this very easily,” he said.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
