CEB Axes 25% of Ground Crews

As Airline Grapples With Empty Seats

18 June 2020

Low Cost Carrier Cebu Pacific (CEB) is letting go of another batch of its ground handling employees as the airline company subsidiary 1Aviation struggles to bounce back from the impact of the coronavirus disease 2019 (COVID-19) pandemic.

The ground handling firm disclosed that it will lay off over 1,000 employees at the end of next month due to contraction of Cebu Pacific flights.

“We are left with no other recourse but to let go of 25% of our total workforce,” 1Aviation Ground handling Services Corp. said in a statement.

Cebu Pacific announced earlier that it will fly only 15% of its flight schedules, traveling to and from 20 domestic destinations by the end of June and plans to increase schedule to at least 50% by December as compared to last year's schedules.

The retrenched workers comprises almost 25% of the company’s almost 5,000-strong workforce that will need to be laid off after trimming over 400 probationary employees months earlier.

“Their last day as employees will be on July 20, 2020,” the company said.

“By the end of the month, we intend to be flying to about 20 domestic cities. We’ll start with that first then we’ll see how demand goes, but right now its not good.” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said.

Currently, Cebu Pacific is reporting only 2% booking out of its seat capacity with most of its passengers coming from repatriation and chartered flights of the government.

Mr Gokongwei said they “have to demonstrate the capability to move with agility and force” to address the changing consumer and channel behaviors caused by the pandemic.

“I do expect that we should begin seeing recovery beginning third and fourth quarter. I don’t expect though [that] we would be back to January 2020 numbers until maybe… 2022,” he said.

“Over the past several months, COVID-19 has caused a decline in demand for travel, and the spread of the disease has prompted the imposition of quarantine and travel restrictions in the Philippines and many other countries worldwide. The travel restrictions in the Philippines caused a virtual halt to all commercial passenger flights for over two months,” 1Aviation said.

Cebu Pacific said their flight schedules remains low and irregular at this time as passenger numbers are still dependent on the capacity of quarantine facilities nationwide.

“We cannot mount the frequency we requested because of that limitation,” says Mr. Gokongwei.

“But even as passenger air travel has resumed with the easing of quarantine and travel restrictions in the country, current operations of all Philippine carriers is a far cry from where it was as of end-2019,” it added.

1Aviation is assuring laid of workers that they will be prioritized for hiring once the situation stabilizes and business picks up again,” the company add.

The ground handling firm was established by Cebu Pacific in 2018 and formed 1Aviation after the Manila International Airport Authority refused to renew the contract of MIASCOR Groundhandling Corp. due to incidents of baggage theft.

CebuPac later sold 60% of 1Aviation to Philippine Airport Ground Support Solutions (PAGSS) of Jefferson Cheng.