Although Cebu Pacific planned a much more conservative expansion strategy for its fleet, the airline said Thursday it will continue to review its long-term fleet plan as air travel may not return to pre-COVID-19 levels in the next few years.
During the 2020 Annual Stockholders Meeting, Cebu Pacific Chief Executive Officer Lance Gokongwei said: "We're undertaking an overall review of our long-term fleet plan. Notwithstanding, this is already a very conservative growth plan compared to our LCCs..."
Cebu Pacific has begun discussions with suppliers to "establish flexibility and adapt to current events." At this moment, new aircraft may not be beneficial for the airline with air passenger volume at its lowest.
From 2020 up until 2026, the low-cost airline has booked 61 deliveries to replace at least 43 aircraft in the future. Cebu Pacific expects to receive three ATRs until 2022, 27 Airbus A321neo until 2023, five Airbus A320neo starting 2020, 16 Airbus A330neo starting 2021, and 10 Airbus A321XLR from 2025.
"For now, we began the second quarter with 76 aircraft: 21 ATRs and 55 Airbus... And the total remaining order book of 61 aircraft, 56 are to be delivered from 2020 to 2025 to replace 43 existing aircraft — bringing us to 88 aircraft by end-2024."
Meanwhile, Gokongwei mapped out the airline's corporate plans while the pandemic paralyzes its operations. Part of the plans are stringent company cost-saving measures while making sure passenger safety remains paramount.
Furthermore, the airline's chief said the airline is now in talks with its aircraft lessors, equipment manufacturers, among others, for potential commercial concessions and payment deferrals. A reduction of aircraft maintenance capital expenditures was eyed due to lower aircraft utilization rates.
"With this, we estimate our 2020 CAPEX to reduce from the previously budgeted P23.8 billion to now approximately P13 billion," he said.
Cebu Pacific, a member of the Air Carriers Association of the Philippines (ACAP), is now in discussions with the Philippine government for possible support through grants and loans. In a Senate hearing on public transportation, ACAP said the local airline industry needs an P8.6 billion monthly stimulus to survive.
"Somehow, we remain confident that this crisis too shall pass. Together we will get through this, and we will emerge as a better and even stronger company. Maraming salamat, everyJuan. Until our next Cebu Pacific flight," an optimistic company CEO said in his closing statement.