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Cebu Pacific mother unit Cebu Air Inc approved a restructuring plan that would clear the airline’s deficit
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The plan calls for use of part of the company’s P20.66 paid-up capital to erase a P16.27-billion deficit
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Once the deficit is cleared, the corporation’s additional paid-in capital will be reduced to P4.4 billion
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Earlier this month, Cebu Pacific announced its purchase of 151 A321neo planes from Airbus
Cebu Pacific mother unit Cebu Air, Inc has approved a restructuring plan that would clear the airline’s P16.27-billion deficit.
In its filing with the Philippine Stock Exchange this week, Cebu Air said its board of directors green lit the restructuring plan to use part of its P20.66 paid-in capital to erase the deficit.
Once the Gokongwei-controlled airline clears its deficit, its remaining paid-in capital will be P4.39 billion.
The restructuring will make space for the company’s massive P1.4 trillion ($24 billion) purchase of new aircraft.
Earlier this month, Cebu Pacific announced its purchase of 151 A321neo planes from European manufacturer Airbus. The deal worth P1.4 trillion is the single biggest aircraft purchase in Philippine aviation history, coming in the middle of a travel boom.
Lance Gokongwei, Cebu Air chairman, said the company chose Airbus over Boeing following what he called an intensive selection process. The company will resort to debt and equity to fund the purchase.
The first batch of planes will arrive in 2028, with the new aircraft adding to Cebu Pacific’s current fleet of eight Airbus 330s, 37 Airbus 320s, 22 Airbus 321s, and 15 ATR turboprop planes.
Two weeks ago, the airline received another A321neo, its seventh delivery for 2024. This year’s P60-billion budget will mostly be spent on aircraft.
With more people traveling for business and pleasure, the country’s second flag carrier’s first quarter earnings were pegged at P2.24 billion. During the period, volume grew by 14 percent to 5.5 million passengers.
Cebu Pacific presently serves 35 domestic and 24 global destinations.
