Low-cost Philippine airline Cebu Pacific has announced that it has estimated the financial impact the rapidly spreading Coronavirus will have on its business to be up to Ps4 billion ($79 million).
In the event that the virus outbreak continues unabated over the next six months, the result will be a “a Ps3-4 billion swing on profit”, according to the carrier.
It makes this estimate based on 2003’s Severe Acute Respiratory Syndrome (SARS) outbreak, which curtailed demand for air travel for six months.
The carrier has cancelled flights to China until 29 March, while reducing frequencies to Hong Kong and Macau. Meanwhile, compatriot Philippine Airlines and Philippines AirAsia have suspended flights to China, Hong Kong and Macau.
Cebu Pacific stressed that the Ps4 billion figure is provided against “the context of its 2020 profit outlook,” especially since it posted operating profit of Ps8.9 billion in the first half of 2019.
In its statement to the Philippines Stock Exchange, it confirmed remarks by its chief executive Lance Gokongwei that the impact of the coronavirus remains difficult to forecast as “the situation continues to evolve.”
“We can’t forecast because the situation is escalating so fast,” Gokongwei was quoted as saying in a 2 February report on The Philippine Star.
“We just had an update regarding [the eruption of] Taal volcano three weeks ago and then now, there’s a change in forecast. People don’t want to travel.”