BIZ BUZZ: Cebu Pacific braces for tough Q3

Gokongwei-led Cebu Pacific is bracing itself for a tougher-than-usual third quarter this year on the lingering impact of the surge in jet fuel prices brought on by the latest turmoil in the Middle East.

As such, it has decided to take the prudent route following an already challenging second quarter and cut as much expenses as possible.

The budget airline aims to conserve cash while continuing to invest in long-term projects that will better prepare it for the inevitable upturn.

But in the meantime, bringing down expenses means taking the rare step of Cebu Pacific management and staff members being asked to consider going on either unpaid leave for anywhere from two weeks to 45 days or taking a temporary pay cut.

“We’ll do cash preservation, which starts at the top. So you’ll see executives of Cebu Pacific taking pay cuts” of as big as 50 percent that could last until November this year, said Cebu Pacific CEO Michael Szucs.

The temporary measure was announced to the Cebu Pacific family just last week, and Szucs stressed that it was entirely voluntary and not exactly unprecedented, as the company also employed the scheme during the COVID-19 pandemic.

He also stressed that while expenses on some items will be cut, the investments in the long-term improvements in areas such as customer service and airport operations will continue as scheduled.

As Cebu Pacific president and chief commercial officer Alexander Lao stressed, the Philippine growth story remains intact despite the high inflation, slow growth and geopolitical tensions, thus the continuing investments by the country’s largest airline.