Burauen Community College

Office of Student Affairs and Services

Burauen Sports Complex, San Diego Poblacion District 9, Burauen, Leyte

“Can I Survive this Pandemic?”: Cebu Pacific Airline`s Strategies

During Global Crisis

I. Rationale
It was year 2020 when the former President of the Philippines,
Rodrigo Duterte officiated the national lockdown due to the extreme
susception of Novel Corona Virus or also known as Covid19 in the
country. This mandatory lockdown, aside from disallowing people to
go outside from their respective houses also made all the business and
other working facilities and establishments to close. Aside from other
famous businesses who were brought down to their knees by the
pandemic such as fast-food restaurants, malls, luxurious clothing lines,
manufacturing firms and the likes, it was also undeniable that one of
the most affected area was the airline transportation.

As noticed, the airline industry stopped their operations because

during the effectivity of the implemented lockdown or community
quarantine, people were prohibited to travel in and out of the country.
One of these airlines is Cebu Pacific (CEB) who is considered as the
country`s leading airline for their so called “low fare, great value”
strategy. However, it seems that even the famous and successful airline
business became heavily affected by the causes brought by the Covid
19 pandemic.

In an interview of Global Leaders Talk, Mr. Xander Lao the

Chief Commercial Officer of CEB, admitted that from the moment
where the national lockdown was officially imposed and publicized,
they expected that the business will only last for three months. But it
seems that the current status and success of CEB is showing the
opposite of what he said during that interview. Hence, this paper will
navigate what kind of strategies CEB formulated and adapted enable
to survive and evade the vulnerability of losing the business during the
turbulent times.

II. Strategies Formulated

Transformational Program
 CEB invested in more fuel-efficient aircraft like Airbus NEOs
which gives them 15-20% savings in terms of fuel efficiency.
After forecasting that the fuel prices would critically rise,
they
 Burauen Community College
Office of Student Affairs and Services
Burauen Sports Complex, San Diego Poblacion District 9, Burauen, Leyte

immediately adapted this strategy. Hence, this investment

was really critical and convenient to them especially during
these times where fuel prices are extremely high. In addition,
it can be noted that during the pandemic- the fuel started to
extremely hiked up which evident up to these days.
Knowing the fact that fuel is the second largest expense for
airlines making up 20-25% of their operating expenses, these
fuel-efficient aircraft allow them to save and lower their
operating expenses. A typical Airbus 320 usually cost $100
million dollars while the Airbus 320 NEO cost $110 million.
For just an extra 10% of the original cost, the Airbus 320 NEO
offers a more fuel-efficient aircraft. Thus, CEB was able to
optimally save.

 CEB also invested in digitalizing their customer service and

trying to push customers to be digitally directed. During
2017, they already own state-of-the-art Customer Command
Center which is manned by an integrated customer care
team who works 24-7. This digital customer service allowed
them to cater and respond customers queries without going
out and be infected by the virus.

 CEB also founded the air cargo as a silver lining- a crucial

alternative source of revenue. During the pandemic, they
optimized their fleet to transport essential goods and
lifesaving across their widest domestic networks.

Group Members BSA 301:

Anota, Syra

Del Pilar, May Ann

Cinco, Jowilyn

Estrabilla, Karen

Garcia, Joyce Mae

Medallada, Karen

Prejula, Richie

Tabayokyok, Venus Charlene

Tolibas, Mary Chris

Tomas, Michelle