Cebu Air to raise $500m, reduce fleet and network
Philippine budget carrier Cebu Air plans to raise $500m by selling preferred stock and bonds, joining airlines worldwide in trying to increase capital to help cope with the pandemic. The proceeds from the $250m convertible preference share issue and $250m private placement of convertible bonds will be used to strengthen the carrier’s balance sheet, it said in a statement. First-half revenue at the airline controlled by the family of John Gokongwei plunged 61% from a year earlier to 17.3b pesos ($358m) and the company said it is operating only about 15% of flights compared with pre-Covid. Cebu Air is undertaking a business transformation that involves trimming down its fleet and network while improving operations as an abrupt drop in passenger traffic “casts uncertainty over the near term prospects of the company,” it said, without providing more details of its downsizing plan. Airlines in the Philippines have suffered a shaky restart amid one of the world’s longest and strictest lockdowns, with lingering concerns over the virus and stringent movement restrictions damping demand for travel. Cebu Air in August dismissed more than 800 of its about 4,000 employees.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-10-08/unaligned/cebu-air-to-raise-500m-reduce-fleet-and-network
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Cebu Air to raise $500m, reduce fleet and network
Philippine budget carrier Cebu Air plans to raise $500m by selling preferred stock and bonds, joining airlines worldwide in trying to increase capital to help cope with the pandemic. The proceeds from the $250m convertible preference share issue and $250m private placement of convertible bonds will be used to strengthen the carrier’s balance sheet, it said in a statement. First-half revenue at the airline controlled by the family of John Gokongwei plunged 61% from a year earlier to 17.3b pesos ($358m) and the company said it is operating only about 15% of flights compared with pre-Covid. Cebu Air is undertaking a business transformation that involves trimming down its fleet and network while improving operations as an abrupt drop in passenger traffic “casts uncertainty over the near term prospects of the company,” it said, without providing more details of its downsizing plan. Airlines in the Philippines have suffered a shaky restart amid one of the world’s longest and strictest lockdowns, with lingering concerns over the virus and stringent movement restrictions damping demand for travel. Cebu Air in August dismissed more than 800 of its about 4,000 employees.<br/>
