Republic of the Philippines

Tarlac State University

College of Business and Accountancy
Lucinda Campus, Tarlac city

CEBU AIR INC.

SUBMITTED BY:
ALMAZAN, CLARISE JOYCE C.
APOLINARIO, MA. CELINE FAITH
AUSTRIA, ALKHRIS M.
ORTIGAS, IVAN
ZULUETA, RENZ
BSHM 1-3

SUBMITTED TO:
ASST. PROF. ISABELITA D. BONDOC
2ND SEMESTER A.Y 2023-2024
 I. The Company: Background and Beginnings

Cebu Air Inc., commonly known as Cebu Pacific, is a Philippine low-cost airline headquartered in
Pasay City, Metro Manila. Founded in 1988, Cebu Pacific has grown to become one of the leading
budget carriers in the Asia-Pacific region, known for its affordable fares, extensive route network,
and modern fleet. Let’s delve into the rich history of Cebu Air Inc., tracing its origins, milestones,
challenges, and successes over the past three decades.

 Early Years (1988-1996)

Cebu Air Inc. was established in August 1988 as a subsidiary of the family-owned company, JG
Summit Holdings. The airline was initially envisioned to cater to the growing demand for air travel
within the Philippines, particularly in the Visayas and Mindanao regions. Cebu Pacific commenced
operations with a fleet of two leased turboprop aircraft flying domestic routes from its base in Cebu
City.
In its formative years, Cebu Pacific faced stiff competition from established carriers like Philippine
Airlines (PAL) and Air Philippines. However, the airline distinguished itself by adopting a low-cost
business model, offering no-frills services, and focusing on operational efficiency to keep fares
affordable for budget-conscious travelers.

 Expansion and Growth (1997-2006)

The late 1990s and early 2000s marked a period of expansion and growth for Cebu Pacific. In 1997,
the airline shifted its main hub from Cebu to Manila, the country’s capital, to tap into the larger
market potential. This strategic move enabled Cebu Pacific to enhance its route network and
frequency of flights, catering to both domestic and international destinations.
One of the key milestones during this period was the airline’s transition from turboprop to jet
operations. In 2005, Cebu Pacific took delivery of its first Airbus A320 aircraft, signaling a shift
towards modernizing its fleet and improving operational efficiency. The introduction of jet aircraft
allowed the airline to offer faster travel times and expand its reach to more distant destinations.
Cebu Pacific’s commitment to innovation and customer service was further demonstrated with the
launch of its online booking platform in 2000. By embracing e-commerce and digital technology, the
airline made it more convenient for passengers to book flights and manage their travel itineraries.

 Challenges and Resilience (2007-2016)

The late 2000s and early 2010s presented several challenges for Cebu Pacific, including rising fuel
prices, economic downturns, and increased competition in the low-cost carrier segment. Despite
these obstacles, the airline remained resilient, implementing cost-saving measures, and exploring
new revenue streams to sustain its operations.
One significant development during this period was the expansion of Cebu Pacific’s international
route network. The airline capitalized on the growing demand for low-cost air travel in the Asia-
Pacific region, adding new destinations such as Singapore, Hong Kong, and South Korea to its roster.
The expansion into international markets helped diversify Cebu Pacific’s revenue sources and
strengthen its position as a regional player.
In 2010, Cebu Pacific made headlines with its historic order of 30 Airbus A321neo aircraft, making
it one of the largest aircraft orders by a Philippine carrier at the time. The move underscored the
airline’s long-term commitment to fleet modernization and fuel efficiency, positioning it for
sustainable growth in the years to come.

 Innovation and Sustainability (2017-Present)

In recent years, Cebu Pacific has continued to innovate and adapt to evolving market dynamics
while prioritizing sustainability and corporate social responsibility. The airline has invested in
initiatives to reduce its environmental footprint, such as fuel-efficient aircraft, carbon offset
programs, and waste management strategies.
Moreover, Cebu Pacific has embraced digital transformation to enhance the passenger experience
and streamline operations. The airline has introduced mobile apps, self-service kiosks, and in-flight
Wi-Fi connectivity to cater to the needs of tech-savvy travelers and improve operational efficiency.
Looking ahead, Cebu Pacific remains focused on expanding its route network, investing in fleet
modernization, and enhancing customer service to maintain its competitive edge in the dynamic
aviation industry. With its pioneering spirit, commitment to innovation, and customer-centric
approach, Cebu Air Inc. is poised to continue shaping the future of air travel in the Philippines and
beyond.
 II. Current Operations

1. Products or Services

 Flight Services
At the core of Cebu Pacific’s offerings are its flight services, which encompass both domestic and
international routes. The airline operates a modern fleet of Airbus A320, A321neo, and A330
aircraft, equipped with state-of-the-art amenities to ensure passenger comfort and safety. With its
extensive

route network, Cebu Pacific connects major cities and tourist destinations across the Philippines,
Southeast Asia, East Asia, Australia, and the Middle East.
One of the key features of Cebu Pacific’s flight services is its commitment to affordability. The
airline employs a low-cost business model, allowing it to offer competitive fares and promotional
deals to budget-conscious travelers. By minimizing operating costs and maximizing efficiency, Cebu
Pacific passes on savings to its customers, making air travel accessible to a wider audience.
In addition to its standard economy class, Cebu Pacific offers several fare options to cater to
different preferences and travel needs. This includes “Lite Fare,” which provides a no-frills, budget-
friendly option for travelers seeking the lowest possible fares. For passengers looking for added
comfort and convenience, Cebu Pacific offers “Standard Fare” and “Plus Fare,” which include
benefits such as seat selection, free baggage allowance, and priority check-in.

 In-Flight Amenities
Despite being a low-cost carrier, Cebu Pacific strives to enhance the in-flight experience for its
passengers through a range of amenities and services. Onboard its aircraft, passengers can enjoy
comfortable seating, ample legroom, and complimentary refreshments. Cebu Pacific also offers a
selection of in-flight entertainment options, including movies, TV shows, and music, accessible
through personal devices via the airline’s Wi-Fi entertainment portal.
For passengers traveling on long-haul flights, Cebu Pacific provides additional amenities to ensure a
comfortable journey. This includes blankets, pillows, and amenity kits containing essential
toiletries. The airline also offers a selection of hot meals and snacks available for purchase, catering
to different dietary preferences and tastes.
Moreover, Cebu Pacific prioritizes safety and security by adhering to stringent aviation standards
and implementing comprehensive safety protocols. The airline’s well-trained cabin crew undergo
regular training and certification to ensure they can respond effectively to any emergency and
provide assistance to passengers as needed.
  Booking and Reservation
Cebu Pacific offers multiple channels for booking and managing flight reservations, providing
customers with flexibility and convenience. Passengers can book flights online through the airline’s
official website or mobile app, which features a user-friendly interface and secure payment options.
Additionally, Cebu Pacific operates a network of ticket offices and authorized travel agents,
allowing customers to make reservations in person or over the phone.
Through its online booking platform, Cebu Pacific offers a range of services to enhance the booking
experience. This includes the ability to search for flights based on specific criteria such as
destination, travel dates, and fare preferences. Customers can also avail of special promotions,
discounts, and travel packages, helping them save money on their airfare and related expenses.
Furthermore, Cebu Pacific offers flexible booking options, allowing passengers to modify or cancel
their reservations as needed. The airline provides a hassle-free process for managing bookings,
including online changes, rebooking, and refund requests, subject to applicable terms and
conditions.

 Customer Service and Support

Central to Cebu Pacific’s business philosophy is its commitment to delivering excellent customer
service and support. The airline employs a dedicated team of customer service agents who are
available to assist passengers with inquiries, reservations, and other travel-related matters.
Whether through phone, email, or social media channels, Cebu Pacific strives to provide timely and
personalized assistance to ensure a positive customer experience.
In addition to its responsive customer service, Cebu Pacific offers a range of support services to
meet the needs of diverse travelers. This includes assistance for passengers with special
requirements, such as unaccompanied minors, senior citizens, persons with disabilities, and those
traveling with infants or pets. The airline also provides pre-flight information and travel tips to help
passengers prepare for their journey and make the most of their travel experience.
Moreover, Cebu Pacific values customer feedback and actively solicits input from passengers to
continually improve its products and services. The airline conducts regular surveys, solicits
reviews, and monitors social media channels to gather insights and identify areas for enhancement.
By listening to customer feedback and acting upon it, Cebu Pacific demonstrates its commitment to
putting the needs of its passengers first.

2. Facilities

 Main Operational Hubs

Cebu Air Inc. operates several hubs across the Philippines, with its primary base located at
Ninoy Aquino International Airport (NAIA) in Manila. NAIA serves as the central hub for the
majority of Cebu Pacific’s domestic and international flights. This strategic location facilitates
seamless connectivity across various destinations, supporting the airline’s extensive network.
Another significant hub is Mactan-Cebu International Airport, which is crucial for Cebu Air Inc.’s

operations in the Visayas and Mindanao regions. This hub allows the airline to serve key tourist
destinations and regional economic centers efficiently. Additionally, Cebu Pacific has secondary
hubs at Clark International Airport and Kalibo International Airport, which cater to the growing
demand for travel to and from these regions.

 Aircraft Fleet
Cebu Air Inc. boasts a modern and diverse fleet, which is pivotal to its operational efficiency and
customer service. The airline operates an all-Airbus fleet, including A320, A321, and A330
aircraft. This standardized fleet offers numerous advantages, such as simplified maintenance,
reduced training costs for pilots and crew, and operational flexibility. The A320 family, known
for its reliability and efficiency, forms the backbone of Cebu Pacific’s fleet. These aircraft are
primarily used for short to medium-haul flights. The A321neo, with its extended range and fuel
efficiency, allows Cebu Pacific to operate longer routes while maintaining lower operational
costs. The A330, a wide-body aircraft, is utilized for high-demand routes and long-haul
international flights, providing increased capacity and improved passenger comfort.

 Maintenance Centers
Maintenance, repair, and overhaul (MRO) operations are critical to Cebu Air Inc.’s commitment
to safety and reliability. The airline operates state-of-the-art maintenance facilities, ensuring its
fleet remains in optimal condition. The primary maintenance facility is located at the Manila
hub, where comprehensive checks and repairs are conducted. Cebu Pacific has partnered with
Lufthansa Technik Philippines, a leading MRO provider, to manage heavy maintenance tasks.
This collaboration ensures that all maintenance activities adhere to international safety
standards and regulations. Additionally, the airline’s in-house team of engineers and
technicians performs routine inspections and minor repairs, ensuring quick turnaround times
and minimizing aircraft downtime.

 Training Facilities
Cebu Air Inc. places significant emphasis on training to maintain high standards of safety and
service quality. The Cebu Pacific Aviation Training Center (CPATC) is a cornerstone of this
commitment. Located in Manila, the CPATC is equipped with advanced training simulators and
classrooms, providing comprehensive training programs for pilots, cabin crew, and ground
staff. The training center includes full-flight simulators for the A320 and A330, which allow
pilots to practice various scenarios and hone their skills in a controlled environment. Cabin
crew training involves extensive safety drills, emergency procedures, and customer service
modules, ensuring that the crew is well-prepared to handle any situation. Ground staff training
focuses on operational efficiency and customer interaction, enhancing the overall travel
experience for passengers.

 Customer Service Operations

Customer service is a key focus area for Cebu Air Inc., and the airline has invested in several
facilities and initiatives to enhance passenger experience. The airline’s call centers, located in
Manila and Cebu, handle reservations, inquiries, and customer feedback. These centers are
staffed with trained agents who provide assistance in multiple languages, catering to the
diverse passenger base. Cebu Pacific’s online platform and mobile app offer a range of services,
including flight booking, check-in, seat selection, and itinerary management. These digital tools
are designed to streamline the travel process, providing passengers with convenience and
flexibility.
Additionally, the airline’s airport lounges at select locations offer comfort and amenities to
premium passengers, enhancing their pre-flight experience.

 Innovations in Technology
In its pursuit of operational excellence and customer satisfaction, Cebu Air Inc. continuously
integrates innovative technologies into its operations. The adoption of advanced IT systems for
flight operations, maintenance management, and customer service has significantly improved
efficiency and accuracy. One notable innovation is the implementation of the Amadeus Altea
Suite, a comprehensive passenger service system that manages reservations, inventory, and
departure control. This system enhances the airline’s ability to manage bookings, optimize seat
allocation, and streamline check-in processes. Furthermore, Cebu Pacific utilizes real-time data
analytics to monitor flight performance, identify trends, and make data-driven decisions. You
sent Customer Service Operations Customer service is a key focus area for Cebu Air Inc., and the
airline has invested in several facilities and initiatives to enhance passenger experience. The
airline’s call centers, located in Manila and Cebu, handle reservations, inquiries, and customer
feedback. These centers are staffed with trained agents who provide assistance in multiple
languages, catering to the diverse passenger base. Cebu Pacific’s online platform and mobile
app offer a range of services, including flight booking, check-in, seat selection, and itinerary
management. These digital tools are designed to streamline the travel process, providing
passengers with convenience and flexibility. Additionally, the airline’s airport lounges at select
locations offer comfort and amenities to premium passengers, enhancing their pre-flight
experience.
Innovations in Technology In its pursuit of operational excellence and customer satisfaction,
Cebu Air Inc. continuously integrates innovative technologies into its operations. The adoption
of advanced IT systems for flight operations, maintenance management, and customer service
has significantly improved efficiency and accuracy. One notable innovation is the
implementation of the Amadeus Altea Suite, a comprehensive passenger service system that
 manages reservations, inventory, and departure control. This system enhances the airline’s
ability to manage bookings, optimize seat allocation, and streamline check-in processes.
Furthermore, Cebu Pacific utilizes real-time data analytics to monitor flight performance,
identify trends, and make data-driven decisions. The airline has also embraced digital
transformation in customer engagement. The use of artificial intelligence (AI) and chatbots on
its website and mobile app provides passengers with instant assistance, addressing common
queries and

facilitating smooth transactions. This integration of technology not only enhances customer
satisfaction but also reduces the workload on human agents.

 Sustainability Initiatives
Cebu Air Inc. recognizes the importance of sustainability in the aviation industry and has
implemented several initiatives to minimize its environmental impact. The airline’s modern
fleet is designed for fuel efficiency, reducing carbon emissions per passenger. Additionally, Cebu
Pacific participates in carbon offset programs, allowing passengers to offset the environmental
impact of their flights. The airline has also invested in eco-friendly practices within its facilities.
This includes energy-efficient lighting, waste reduction programs, and water conservation
measures at its offices and maintenance centers. Cebu Pacific’s commitment to sustainability
extends to its in-flight services, where efforts are made to reduce plastic use and manage waste
effectively.

3. Organizational Chart: Different Department

Cebu Air Inc. Organizational Chart with Appointed Personnel

1. Board of Directors
 Chairperson: Lance Gokongwei
 Board Members: Various members including representatives from JG Summit Holdings, Inc.

2. Executive Management
 Chief Executive Officer (CEO): Michael Ivan Shau (as of the latest available data)
Responsible for overall leadership and strategic direction of the airline.
 Chief Operating Officer (COO):
Manages daily operations and ensures operational efficiency.
 Chief Financial Officer (CFO): Mark Cezar
Oversees financial planning, budgeting, and reporting.
 Chief Commercial Officer (CCO): Xander Lao
Manages revenue strategies, marketing, and sales operations.
 Chief Information Officer (CIO):
Oversees IT infrastructure and digital initiatives.

 Chief Human Resources Officer (CHRO):

Manages HR functions, including recruitment, training, and employee relations.

 Chief Safety Officer (CSO):
Ensures compliance with safety regulations and oversees safety protocols.

3. Flight Operations Department

 Vice President of Flight Operations:
Oversees flight scheduling, route planning, and crew management.

 Director of Flight Scheduling and Planning:

Manages the planning and scheduling of flights.
 Director of Crew Management:
Oversees the management and training of flight crews.
 Director of Regulatory Compliance:
Ensures adherence to aviation regulations and standards.

4. Maintenance and Engineering Department

 Vice President of Maintenance and Engineering:
Manages aircraft maintenance and engineering support.
 Director of Routine Maintenance:
Oversees daily aircraft inspections and maintenance tasks.
 Director of Engineering Support:
Provides technical support for aircraft modifications and upgrades.
 Director of Heavy Maintenance:
Manages major repairs and overhauls of aircraft.
5. Commercial Department
 Vice President of Commercial:
Oversees sales, marketing, and customer service functions.
 Director of Sales and Distribution:
Manages ticket sales and distribution channels.
 Director of Marketing and Branding:

Develops marketing strategies and brand initiatives.

 Director of Customer Service:
Enhances customer experience and handles service operations.

6. Finance Department
 Vice President of Finance:
Oversees financial planning, accounting, and budgeting.
 Director of Budgeting and Financial Planning:
Manages financial forecasting and resource allocation.
 Director of Accounting:
Oversees accounting operations and financial reporting.
 Director of Cost Control:
Implements cost-saving measures and monitors expenditures.

7. Human Resources Department

 Vice President of Human Resources:
Manages recruitment, training, and employee relations.
 Director of Recruitment and Hiring:
Oversees hiring processes and onboarding.
 Director of Training and Development:
Manages staff training programs and development initiatives.
 Director of Employee Relations:
Handles employee grievances and promotes workplace culture.

8. Information Technology Department

 Vice President of Information Technology:
Manages IT infrastructure and digital transformation projects.
 Director of System Management:
Oversees IT systems and ensures reliability.
 Director of Cybersecurity:
Implements security measures to protect data and systems.

 Director of Innovation and Development:

Develops new tools and applications for operational efficiency.

9. Safety and Security Department

 Vice President of Safety and Security:
Ensures safety and security of passengers and staff.
 Director of Safety Management:
Oversees safety protocols and risk assessments.
 Director of Security Measures:
Manages security personnel and passenger screening processes.
 Director of Compliance and Training:
Ensures staff compliance with safety and security regulations.

10. Legal and Regulatory Affairs Department

 Vice President of Legal and Regulatory Affairs:
Manages legal compliance and regulatory issues.
 Director of Legal Compliance:
Ensures adherence to legal standards and regulations.
 Director of Contract Management:
Manages contracts with suppliers and partners.
 Director of Dispute Resolution:
Handles legal disputes and represents the airline in legal proceedings.
III. The Company’s Report of Performance (Year 2023)
A. Company’s Balance Sheet
B. Company’s Income Statement
IV. The Company’s Annual Report: Overall Performance
 Cebu Air Inc. Annual Report: Overall Performance in 2023
Cebu Air Inc., operating under the brand Cebu Pacific, showed a remarkable turnaround in its
financial performance for 2023. After facing substantial losses in 2022, the company
successfully navigated a recovery phase, reflecting a robust resurgence in passenger demand
and strategic financial management.

 Financial Performance
In 2023, Cebu Air Inc. recorded a net income of PHP 7.9 billion, a significant rebound from the
net loss of PHP 13.98 billion in 2022. The operating income reached PHP 8.6 billion, and
EBITDA soared to PHP 21.8 billion, a stark increase from PHP 664 million in the previous year.
The company's total revenue increased by 60% to PHP 90.6 billion, driven by a 78% rise in
passenger revenue to PHP 62.5 billion (PSE EDGE) (Business World Online).

 Passenger and Operational Metrics

Cebu Air transported over 20 million passengers in 2023, marking a 41% increase from the
previous year. The number of flights also rose by 30% to over 140,000, reflecting the easing of
travel restrictions and a strong rebound in both domestic and international travel demand. The
seat load factor, which measures the percentage of available seating capacity filled, improved to
84% (AviationSource News) (BusinessMirror).

 Challenges and Strategic Initiatives

Despite facing increased operating expenses due to higher fuel prices and fleet-related costs,
the company managed to maintain positive growth. Cebu Air received 18 new aircraft deliveries
in 2023, bolstering its fleet to enhance operational resiliency and support capacity growth. The
company also invested in digitalization efforts to improve customer service (Business World
Online).

 Outlook and Future Prospects

Cebu Air Inc. is optimistic about sustaining its financial recovery into 2024. The company plans
to leverage the strong travel demand and favorable macroeconomic conditions to further
improve its profitability. The strategic initiatives implemented in 2023, including fleet
expansion and operational enhancements, are expected to support continued growth and
stability in the coming years

V. Group Members

Almazan, Clarise Joyce C.

-Overall Performance
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Apolinario, Ma. Celine Faith

-Company background
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Alkhris Austria
-Report of Performance
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Ivan Ortigas
-Current operations
-Research
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Renz Zulueta
-Current operations
-Research
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