Cebu Pacific restructuring plan OK'd ahead of P1.4-T aircraft acquisition

Cebu Air Inc., which operates budget carrier Cebu Pacific, said Wednesday that its board approved a restructuring plan as the firm is set to purchase over 150 aircraft for up to $24 billion or P1.4 trillion.

In a regulatory filing, Cebu Air said its board of directors approved the restructuring plan to use its P20.658-billion paid-in capital, as shown in its audited financial statements as of Dec. 31, 2023, to eliminate the P16.269-billion retained earnings deficit.

Upon the elimination of the deficit, the company's paid-in capital as of end-2023 will be reduced to P4.389 billion.

Cebu Pacific earlier this month said it inked a memorandum of understanding (MOU) with Airbus that covers firm orders for up to 102 A321neo and 50 A320nwo Family purchase rights, which will be powered by Pratt & Whitney GTF engines.

"The order is designed to provide Cebu Pacific with maximum flexibility to adapt fleet growth to market conditions, with the ability to switch between the A321neo and A320neo," Cebu Pacific chief executive officer Michael Szucs said.

"When finalized, the deal will be a significant milestone for the local airline industry and a testament to CEB’s unwavering commitment to support the Philippine growth story," he added.

The company earlier this year said it expects to close the year with 95 aircraft, which will boost its full-year 2024 seat capacity by 12% to 15% compared with 2023.

The 95 aircraft targeted to be held by the end of the year will be made up of 16 ATRs, 51 Airbus NEOs, and 28 Airbus CEOs.

The carrier ended the first quarter of the year with a P2.24-billion net earnings, doubling the P1.08 billion the same period last year as total revenues jumped by 21% to P25.3 billion. — VDV, GMA Integrated News