Cebu Pacific to lay off workers as travel demand nosedives due to COVID-19

Art Fuentes, ABS-CBN News

Posted at Jun 24 2020 06:41 PM

Cebu Pacific airplanes at the Ninoy Aquino International Airport Terminal 3. Gigie Cruz, ABS-CBN News file photo

MANILA - Cebu Pacific, the country’s largest airline, confirmed on Wednesday that it would be implementing job cuts in the next two to three months as the COVID-19 pandemic has caused travel demand to plunge. 

Airline spokesperson Charo Logarta Lagamon said they still don’t know how many workers will be affected as the company is “still in the process of going through the review of the transformation.”

Lagamon, however, confirmed that the job cuts will be across the board, affecting everyone in the organization. 

“Kasi it’s really right-sizing the organization, so it’s really looking at the role, the functions and the departments,” Lagamon said. 

Cebu Pacific has tried to avoid laying off workers despite flights being grounded for two and a half months, Lagamon said. She noted that in March, the airline’s managers even took pay cuts so that other employees could be retained.

But the company could no longer sustain this, she said, as the company’s flights have been reduced to just 10 to 15 percent of its pre-pandemic levels while their expenses for aircraft maintenance, overhead and payments to suppliers remained the same. 

No new money is coming in either as most of the passengers on the airline’s flights are those who rebooked their tickets, or those who were stranded in the past two months as the coronavirus halted travel in many parts of the world. 

“Unfortunately it’s come to a point na talagang we really need to take a look at the business conditions, environment and see how to move forwards from this,” Lagamon said. 

There is also a lot of uncertainty on whether travel demand will recover in the next few months as COVID-19 remains a major concern, she said. 

Earlier this year, Philippine Airlines cut 300 jobs, while AirAsia also announced layoffs in the Philippines. 

The Air Carriers Association of the Philippines (ACAP), which counts Cebu Pacific, PAL, and AirAsia among its members, has said that COVID-19, as well as the measures implemented to control it, had a "catastrophic" impact on the aviation industry. 

ACAP has appealed for long-term credit facility, working capital credit lines, credit guarantee arrangements, and temporary relief from navigational and airport charges, to support the airline industry.