king game Cebu Pacific gets majority control of ground handling firm
The operator of Cebu Pacific is set to take majority ownership of 1Aviation Groundhandling Services Corp. (1AV) via P113-million debt-to-equity conversion dealking game, allowing the budget carrier to better integrate its groundhandling and logistical services into its operations.
In a disclosure on Tuesday, Cebu Air Inc. said that its P113-million loans and advances to 1AV would be converted to 1.13 million shares. The debt forms part of the total P150 million lent by Cebu Air to the ground handling company.
READ: Cebu Pacific buys AirSwift for P1.75 billion
Article continues after this advertisementThis transaction, subject to approval by the Securities and Exchange Commission, will increase the Gokongwei-led airline’s stake in 1AV to 60 percent from the current 40 percent.
FEATURED STORIES BUSINESS BCDA still finalizing plans to re-develop Market! Market! BUSINESS Cracking down on cybercrime: Industry collaboration for a secure digital banking ecosystem BUSINESS BIZ BUZZ: Global brainstorming club coming“As a majority owner, CEB [Cebu Pacific] can integrate 1AV’s services more seamlessly with its operations, creating synergies that could reduce operational costs and improve service quality, particularly in ground handling and logistical support,” the airline said.
Other stakeholders, Philippine Airport Ground Support Solutions Inc. and Jefferson Cheng, agreed to convert their loan of P37 million into 370,000 common shares. They have a collective ownership of 40 percent in 1AV.
Article continues after this advertisement1AV, founded on Mar. 1, 2018, operates in 34 airports across the country.
Article continues after this advertisementREAD: Cebu Pacific places P1.4-T order for Airbus jets
Article continues after this advertisementCebu Pacific is set to see better ground handling operations at a time when air travel has been on the rise, especially this holiday season.
In the first half, Cebu Pacific saw its top line rise by 18 percent to P51.44 billion from P43.55 billion a year ago, driven by a robust growth in passenger revenues.
Article continues after this advertisementThis year, the airline targets to fly 24 million passengers, higher than the 20 million it registered in 2023, as it opens more routes here and abroad.
Along with this, Cebu Pacific has earmarked a P60-billion capital expenditure for mostly aircraft-related spending this year. INQ
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