IFC and Indigo Partners support low-cost carrier Cebu Pacific in recovery from Covid-19

IFC and Indigo Partners support low-cost carrier Cebu Pacific in recovery from Covid-19

The Philippines’ leading airline, Cebu Air Inc. (Cebu Pacific, PSE: CEB), has taken another big step towards securing its future as a key low-cost provider of domestic and international travel after raising fresh funds from the International Finance Corporation (IFC), the IFC Emerging Asia Fund, and Indigo Philippines LLC, an affiliate of Indigo Partners LLC.

IFC, the IFC Emerging Asia Fund, a private equity fund managed by the IFC Asset Management Company, and Indigo Partners, a private equity firm focused on worldwide investments in air transportation, have invested US$250 million in CEB in the form of convertible bonds.

The investment will provide CEB with a longer liquidity runway to help the company withstand the effects of the pandemic until economic activity and travel demand recovers. It will also help maintain trade and the competitiveness required to provide affordable transportation in an island nation where maritime transport alone cannot address the connectivity needs of people, goods, and services. 

“We view Indigo, IFC, and IFC Emerging Asia Fund not only as capital providers but also long-term partners in driving improvements in the business, as well as accelerating our sustainability agenda,” said Lance Gokongwei, President and Chief Executive of CEB. “This will further strengthen CEB as we recover, so we may continue fulfilling our commitment to improve the lives of people in the communities we serve for a long time to come.” 

As an archipelago of over 7,600 islands and a major tourist destination, the Philippines relies heavily on air travel. Tourism generated 12.7 per cent of the country’s gross domestic product in 2019, while remittances, which depend on the movement of Filipino workers abroad, generated a further 8.9 per cent. As the largest domestic airline in the Philippines and one of its leading international carriers, CEB will play a critical role in the country’s recovery post-Covid-19.

Air travel is an important contributor to the global economy. Air transport supported 87.7 million jobs worldwide prior to the pandemic, including 11.3 million direct jobs and 44.8 million tourism-related jobs, according to a report by the Air Transport Action Group. It contributed $3.5 trillion to the world economy in 2018, while air freight carries 35 per cent of global trade by value. However, Covid-19 has had a devastating impact on the sector, resulting in grounded fleets, significant financial losses and a loss of customer confidence. This makes long-term and experienced partners critical to helping airlines get back on track. 

“We are delighted to partner with CEB, a market-leading carrier and one the region’s best-performing airlines,” said Jean-Marc Arbogast, Country Manager for the Philippines at IFC. “Maintaining low-cost travel services is essential in an island nation like the Philippines, and airlines will play a critical role in driving the country’s economic recovery. CEB will play a leading role in that recovery, providing connectivity and jobs, preventing disruptions in supply chains, and supporting the tourism sector at a time when it’s needed most.”

“Indigo is excited to invest in CEB, and work with their team to take advantage of the many growth opportunities ahead as travel demand increases post-pandemic,” said Bill Franke, Managing Partner of Indigo Partners. “We have a great deal of respect for what the Gokongwei family has achieved with the airline, and we look forward to a strong partnership.”  

IFC has been an active investor in private-sector airlines in emerging markets around the world, with 19 investments since 2000. Projects with low-cost carriers include supporting the expansion of Brazil’s GOL Airlines and helping to launch Mexico’s Volaris.

Indigo Partners specializes in investing in the aviation sector. Its current airline investments include Frontier Airlines in the United States, Volaris in Mexico, Wizz Air in Europe, and JetSMART in Chile.

About Cebu Air, Inc. (Cebu Pacific, PSE: CEB)

CEB entered the Philippine aviation industry 25 years ago and is now the largest airline in the country with its “low fare, great value” strategy. It offers the widest network in the Philippines, with flights spanning Asia and the Middle East. One of the youngest fleets in the world, its 74-strong aircraft fleet is composed of Airbus and ATR aircraft, which includes its two ATR freighters and one A330 freighter. For more information, visit www.cebupacificair.com.

About IFC

IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.

About IFC Asset Management Company

IFC Asset Management Company (AMC), a division of IFC, mobilizes and manages capital to invest in businesses in developing and frontier markets. Created in 2009, AMC provides leading institutional investors with unique access to IFC‘s emerging markets investment pipeline and investment expertise, while providing positive development impact in the countries in which it invests. Investors in AMC managed funds include sovereign wealth funds, pension funds, and development-finance institutions. It has raised over $10 billion across 13investment funds covering equity, debt, and fund of-funds products. For more information, visit www.ifcamc.org

About the IFC Emerging Asia Fund

The $693 million IFC Emerging Asia Fund, launched in 2016, makes equity and equity-like investments across all sectors in emerging markets in Asia. For more information, visit www.ifcamc.org/funds/ifc-emerging-asia-fund

About Indigo Partners

Indigo Partners is a private equity firm established by W. A. Franke in 2003 to pursue acquisitions and strategic investments in the air transportation and related industries. The firm was a lead investor in Tiger Airways based in Singapore and Spirit Airlines based in Ft. Lauderdale, Florida, and maintains lead investments in Wizz Air Holdings, Plc, a ULCC with multiple bases in Central and Eastern Europe; Frontier Airlines, a ULCC based in Denver; Volaris Airlines, a ULCC based in Mexico City; and JetSMART, a ULCC based in Chile. Indigo is headquartered in Phoenix, Arizona.

Cebu Pacific

Michelle Rose F. Lim

+63 998 8404989



Alec Macfarlane

+852 9199 1720


Indigo Partners

Jennifer Hurson
+1 845 507 0571


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