POLITICAL ECONOMIC

P1 - Terrorism: Aircraft Hijacking E1 - Increase in fuel price

P2 - ICAO Annex 8 (Airworthiness of
Aircraft)
P3 - Air Passenger Bill of Right
P4 - Railway Labor Act
P5 - Air Carrier Access Act
P6 - Freedom of the Air
P7 - Pilot Strike
P8- R.A. 9479 (Civil Aviation Authority
Act of 2008)
P9 - Hong Kong Airport Protest
P10 - National Transportation Safety
Board Act
E2 - Low interest rate
E3 - Demand Shortage for Pilot
E4 - 4.6 Growth in Air Travel
Expenditure
E5 - Increase in Consumer Price Index
(CPI)
E6 - US Scheduled Passenger
E7 - Scarce of Seating Capacity in
Aircraft/Airport
E8 - Air transport as a major employer

SOCIAL
S1 – Environmental Tax Fee Effect
S2 – Climate Change Endangering Air
Travel
S3 – ‘Tanim-bala’ Sowing Fear among
Tourists
S4 – Growing Market of Solo Travelers
S5 – Air Passengers Demand
Actionable Information
S6 – Propensity to Travel
S7 – Millenials as The Largest Travel
Group
S8 – Personalized Travel
S9 – Sustainable Aviation: Boosting
Biofuel Use
S10 – Consumer perceptions to in-
flight catering
TECHNOLOGICAL
T1 - Emergence of Mobile Devices
T2 - Development of Hassle-free
Online Transactions
T3 - Usage of Data Analytics
T4 - In-flight Entertainment
T5 - Better Security on Airlines
T6 - New Technology Cut Fuel Cost
T7 - Development of Aircrafts
Produces Less Noise In-flight
T8 - Improved Systems for Airline
Punctuality
T9 - Usage of Modern Feedback
Technologies
T10 - Aircraft Health Management
and Technology

Political Factors
P1 - Terrorism: Aircraft Hijacking

It is forcing the plane to go in other directions, and causing other problems by

going into the air space of another country without a permit, and committing
acts to hinder passengers and to rob by threatening the crew using force and
threats or other illegal acts. One of the popular hijacking incident was 9/11
an American Airlines Boeing 767 loaded with 20,000 gallons of jet fuel
crashed into the north tower of the World Trade Center in New York City.
(Mustafa Emre Civelek, 2018)
P2- ICAO Annex 8- Airworthiness of Aircraft

In the interest of safety, an aircraft must be designed, constructed and

operated in compliance with the appropriate airworthiness requirements of the
State of Registry of the aircraft. Consequently, the aircraft is issued with a
Certificate of Airworthiness declaring that the aircraft is fit to fly. (International
Civil Aviation Organization, 2001)
P3- Air Passenger Bill of Right
Under Air Passenger Bill of Right consumers has the right to be informed of the
complete terms and conditions of the contract of carriage. Air carriers are
required to disclose all other mandatory fees and charges, including
government taxes and fuel surcharges, in their fare advertisements. If
overbooking occur, air carrier may not bump off passengers without their
consent. Air carriers are responsible to bear any expenses to the passengers who
will be affected by overbooking. In case of cancellation of a passenger’s flight,
the airlines are obligated to provide sufficient refreshments, hotel
accommodation, transportation from airport to the hotel, free phone calls, texts
or emails and first aid, if necessary. In addition, the passenger must be
reimbursed of the value of the fare, including taxes and surcharges, or endorsed
to another air carrier or rebooked to the next flight available without additional
charge. (Department of Transportation, 2012)
P4- Railway Labor Act

It shall be the duty of all carriers, their officers, agents, and employees to exert
every reasonable effort to make and maintain agreements concerning rates of
pay, rules, and working conditions, and to settle all disputes, whether arising out
of the application of such agreements or otherwise, in order to avoid any
interruption to commerce or to the operation of any carrier growing out of any
dispute between the carrier and the employees thereof: All disputes between a
carrier or carriers and its or their employees shall be considered, and, if possible,
decided, with all expedition, in conference between representatives
designated and authorized so to confer, respectively, by the carrier or carriers
and by the employees thereof interested in the dispute. (Paul, 2005)
P5- Air Carrier Access Act

The Air Carrier Access Act prohibits discrimination on the basis of disability in air
travel. The Department of Transportation has a rule defining the rights of
passengers and the obligations of airlines under this law. This rule applies to all
flights of U.S. airlines, and to flights to or from the United States by foreign airlines.
(US Departmet of Transportation, 2015)
P6- Freedom of the Air

The first freedom allows a state’s aircraft (A) to fly over another state’s airspace
(B) while the aircraft is on its way to another destination (C). The second
freedom is very similar however, it allows state A’s aircraft to land in state B while
on its way to state C for noncommercial purposes, such as refueling or technical
stops. The third freedom allows state A’s airline to carry passengers from state A
to state B, while the fourth freedom allows the return from state B back to state
A. Fourth ensures that an airline does not have to make the return journey with
an empty plane. Fifth freedom allows a plane from state A traveling to state B
under the third freedom, to embark passengers and cargo in state B and fly
them to state C. This freedom allows airlines to build their networks even when
demand between state A and B are relatively weak. The addition of demand
between states A and C and B and C to the A to B demand makes the route
worthwhile for the airline. (Hayden-Lefebvre, Simple Flying, 2019)
P7- Pilot Strike

Pilot strike is basically pilots who is having a union towards the airline or related to
the government. There was a 10-days Pilot Strike incident happened on 2015
involving TAP Air Portugal over the government’s plans to privatize the struggling
airline. Unions accused the government of failing to honor a 1999 agreement
which would have set aside a significant percentage of the company for
employee’s ownership should the state-owned airline be privatized. Pilots also
sought the payment of seniority bonuses which had been frozen since 2011.
(Hayden-Lefebvre, Simple Flying , 2019)
P8- R.A. 9479 Civil Aviation Authority Act of 2008

To provide safe and efficient air transport and regulatory services in the
Philippines by providing for the creation of a civil aviation authority with
jurisdiction over the restructuring of the civil aviation system, the promotion,
development and regulation of the technical, operational, safety, and aviation
security functions under the civil aviation authority. (Senate of the Philippines,
2008)
P9- Hong Kong Airport Protest

Hong Kong has been colonized by Britain for more than 150 years until the British
handed it back over to China in 1997 with a condition of “one country, two-
system” policy. It guarantees freedoms that are unavailable to Chinese
mainlanders, such as the right to protest, the right to a free press and freedom of
speech for 50 years after the handover. But many residents say mainland China
is already starting to encroach on those rights. The airport emerged as a key
protest target as anti-government demonstrators looked to take their message
directly to the international community. Protestors view Hong Kong's
International Airport as something of a safe protest space away from the streets,
where clashes between demonstrators and police have become
commonplace. (Federal Aviation Administration, 2019)
P10- National Transportation Safety Board Act

To promote safety in the transportation of people and goods through cost-

effective measures that either prevent, remedy or mitigate crashes, accidents
and serious incidents involving any mode of transport, including pipelines and
conveyors. (Senate of the Philippines, 2018)

Economic Factors
E1- Increase in fuel price

According to International Air Transport Association (IATA), jet fuel price average
has increased above the feared $80 per barrel. Last 2018, fuel bill of the global
airline industry is expected to be $39.9 billion. (Factors that cause effects on the
airline industry, 2018) (Burbaitė, 2018)
E2- Low interest rate

According to Tom Woods, partner of Klynveld Peat Marwick Goerdeler (KPMG)

Ireland, the aviation industry has been thoroughly enjoying an extended bull run
for the past decade. Airlines have had access to cheap finance as tough
competition pushed down lease rates and debt costs. Lessors, while grappling
with a very competitive marketplace with many new entrants, have also been
capitalizing on the availability of cheap finance and the demand for additional
lift as passenger numbers continue to grow. Banks too are busy funding
deliveries, and despite depressed margins and fierce competition, continue to
find innovative ways to add value. (Woods, 2019)
E3- Demand Shortage for Pilot

IndiGo, which is India’s largest passenger airline, grounded 10 Airbus A320-neo

aircraft and cancels 30 flights per day due to several reasons including pilot
shortage. In addition to this, the number of cancelled domestic flights in
Australia reached 10,808 last year. Flybe, European regional airline based in
England, cancelled 10 flights at the beginning of April. Therefore, at the same
time low-cost airline Ryanair, which operates over 1,800 routes and owns a fleet
of 400 Boeing 737-800, reduced numerous flights among several destinations.
(Pilot-Hungry Airlines Struggle with Global Pilot Shortage, n.d.)
E4- 4.6 Growth in Air Travel Expenditure

According to IATA (or the International Air Transport Association), there has been
a 4.6% growth in spending on air transport, which lead to increase up to $710
billion in 2013 and was driven by a 2.4% growth in world GDP. In 2014, the total
spending on air transport is expected to increase by 5% to $746 billion, or 1% of
GDP. As of 2018, the world GDP growth on the airline industry is 3.4%. Greater
than the 2017 record of 3.2%. (Cederholm, 2014) (Economics, 2018)
E5- Increase in Consumer Price Index (CPI)

CPI includes prices of both scheduled domestic and international flights

excluding business trips in the U.S. An increase in the index indicates that airline
ticket prices are rising, and a decrease indicates a fall in ticket prices. In U.S, the
airline fares index represented 0.742% of all items included in the index
on December 2013. An increase in the index indicates that airline ticket prices
are rising, and a decrease indicates a fall in ticket prices. (Cederholm, 2014)
E6- US Scheduled Passenger

According to the Bureau of Transportation Statistics (BTS) of USA June 2014 was
the seventh consecutive month that recorded a year-over-year growth in
employment by the U.S. scheduled passenger airlines. The number of workers
increased by 1% year-over-year to 385,475 workers. (Cederholm, 2014)
E7- Scarce of Seating Capacity in Aircraft/Airport

More and more people want to use air services to and from the airport, but no
more inbound or outbound flights can be added, as there is not enough airport
capacity to accommodate them. Instead airlines react to the higher demand
by raising prices and allocating aircraft seats to the passengers who pay the
highest prices. This premium that airlines can charge passengers is known as the
‘scarcity rent’ – it is a price passengers are paying which does not correspond to
any underlying cost incurred by the airline. In Europe, these scarcity rents
currently amount to €2.1 billion per annum. In recent years the European
Commission has been looking closely at slot policy more generally, and in 2011
proposed a set of measures to reform current regulatory arrangements –
including proposed legislating to formally allow for secondary airport slot
trading. Of all the proposed measures, secondary slot trading was estimated by
the Commission to have by far the greatest potential overall economic benefits
- at over €3.1 billion each year. (Contemporary Issues Affecting Aviation Industry,
n.d.)
E8- Air transport as a major employer

The air transport industry generates a total of 29 million jobs globally. As a

capital-intensive business, productivity per worker in the air transport industry is
very high, at three and a half times the average for other sectors. (Air Transport
Action Group, n,d)

Social Factors
S1– Environmental Tax Fee Effect

Passengers may choose not to travel as a result of the price increase, may
substitute other means of travel for air travel (i.e., train, automobile, etc.) or may
attempt to divert air travel to a jurisdiction where such a tax has not been
levied, all of which reduces productivity and may result in displacing
environmental problems to other locations. (International Air Transport
Association, n.d.)
S2 – Climate Change Endangering Air Travel

According to a study published on August 8, 2019, which found that climate

change is having a greater impact on the jet stream than previously thought.
Scientists at the University of Reading in the UK have recently discovered that
the jet stream has become 15 per cent more sheared in the upper atmosphere
over the North Atlantic since satellites began observing it in 1979. The study,
which was published in the journal Nature, provides the first observation-based
evidence to support previous research that human-induced climate change will
make severe turbulence up to three times more common by 2050-80. (Millenium
Post, 2019)
S3 – ‘Tanim-bala’ Sowing Fear among Tourists

The chilling effect of the “tanim-bala” (bullet-planting) scandal at the Ninoy

Aquino International Airport (NAIA) terminals has started to manifest among
foreign tourists. While the incidents of “tanim-bala” have yet to make a dent in
the country’s tourist arrivals, the Department of Tourism (DOT) said that its chilling
effect has already affected foreign visitors. It has effect in a sense that there is
now fear. Psychologically, they are wary of the possible impact in their travel not
only to the Philippines but also within the Philippines. (Manila Bulletin, 2015)
S4 – Growing Market of Solo Travelers

A number of recent surveys and the Adventure Travel Trade Association’s (ATTA)
report, 20 Adventure Trends to Watch in 2018, indicate solo travel is on the rise.
Additionally, ATTA members hosting solo travelers confirm this is a trend worth
watching. A May 2018 study by Booking.com of 20,500 global travelers notes 40
percent of Baby Boomers have taken a solo trip in the past year, yet
Under30Experiences, which is Millennial-focused, reports more than 80 percent
of its clients travel on their own, indicating an interest in solo travel across all age
groups. Additionally, a survey conducted by MMGY Global found 25 percent of
respondents plan to travel on their own in 2018. (Haugen, 2018)
S5 – Air Passengers Demand Actionable Information

The International Air Transport Association (IATA) found that 81% of travelers
want the ability to track their bags at any point during their journey, and 93%
want real-time flight status updates. Successful airlines are also providing
location- and context-aware interactions. This means knowing not just where
travelers are, but also what stage of their trip they’re in: before, during, or after.
(Astute, 2016)
S6 – Propensity to Travel

According to the Directorate General of Civil Aviation’s traffic report published

recently, despite the introduction of new airlines like AirAsia India, Air Costa,
Pegasus and Vistara, existing airlines have surpassed their midyear marks set in
2014. One of the major reasons for this turnaround is not just the constant
slashing of fares and flash sales that have become the norm, but also the
increased propensity of the Indian traveller to use air travel as the preferred
option. (Thimmayya, 2015)
S7– Millenials as The Largest Travel Group

According to The World Tourism Organization (UNWTO) forecasts, there will be

370 million youth travellers by 2020, spending over USD 400 billion. Around three-
fifths of the world’s Millennials are from Asia, with a third of these coming from
India and China, while US Millennials are the country’s largest demographic
group. For this generation, sharing snaps of experiences on social media
preserves precious memories as well as nourishing their carefully curated online
identity. Social Media are also becoming key influencers on how and where to
travel. Rather than relying on traditional sources of information, social media is
shaping Millennials’ decision-making process, often led by one question: “how
“Instagrammable” will my holiday be?” (Global Blue, 2018)
S8– Personalized Travel (DIY Travel)

According to Skift and Adobe’s 2018 Digital Transformation Report, digital travel
sales are projected to reach $219 billion by 2021, with nearly half of these
transactions coming from mobile devices. This is hardly surprising, considering the
trend of growing mobile usage among consumers for browsing and transactions
of all kinds. But other digital activities, such as social media usage, may be
contributing to the bump in mobile bookings as well: a surge of attractive travel
blogs, breathtaking Instagrams, and up-to-the-minute vacation updates on
Facebook have heightened wanderlust for recreational travelers and, in turn,
the demand for travel personalization. (Morien, 2018)
S9- Sustainable Aviation: Boosting Biofuel Use

In a May 2018 report, the General Aviation Manufacturers Association (GAMA),

the National Air Transportation Association (NATA) and others explained that to
fall under the definition, the fuel must be sourced in a manner that avoids
depletion of natural resources and mitigates its contribution to climate change.
It must also meet current certification requirements for use in turbine-powered
aircraft engines. SAJF can be derived from various sources, such as cooking oil,
plant oils, municipal waste, industrial off-gas, sugars and agricultural residues,
and be processed in alternative ways, including thermochemical and catalytic
production processes. Five production pathways have currently been certified
by ASTM, an industry body, and several more are pending approval. Burning the
fuel still creates emissions, but the result must be a net reduction in CO2
emissions across its life cycle relative to fossil fuels. (Reid, J., 2019)
S10- Consumer perceptions to in-flight catering

Tabacchi and Marshall undertook a survey of consumer perceptions of in-flight

services in the USA and found out that 30% of the passengers taking domestic
routes said that cuisine played an important role in choosing which airline to fly
with. (Abhimanyu Awasthi, 2018)
Technological Factors
T1- Emergence of AI Mobile Devices

The heavy use of mobile devices nowadays makes it easier for companies to
get in touch with their passengers and prospective clients. Announcements and
promos can easily reach their target. (Kumar & Zymbler, 2019)
T2- Development of Hassle-free Online Transactions

Online bookings and other transactions produces a great deal of convenience

for passengers making getting a ticket for a flight or rebooking so much easier
and on-the-go. (Kumar & Zymbler, 2019)
T3- Usage of Data Analytics
The online booking system and real-time analytics help the company have a
better grasp on all its processes and take action on real-time situations.
(Zhaobing, Yi, & Shimeng, 2019)
T4- In-flight Entertainment

With the fast-growing pace of technology, we have an enormous amount of

devices to entertain in-flight. (Marketing_strategies_of_full_s.PDF, n.d.)
T5- Better Security on Airlines

The growth of technology has given way to a more diverse and more efficient
devices and machines that can help aid in security and other safety protocols
when entering and leaving for a flight. Better security makes passengers be
more at ease inside the airlines and in-flight. (Hau, 2017)
T6- New Technology Cut Fuel Cost

Modern aircrafts can cut consumption of fuel up to double-digit percentages

compared to old airships. Innovations by adding winglets, applying a flexible
navigation system and continuous climb and descent operations, use of 3D
printing, carbon fiber and shape memory alloys, D8 designs and blended wing
body all contribute to fuel efficiency on aircrafts. (“The Top 6 Technologies for
Improving Aircraft Fuel Efficiency - Prescouter - Custom Intelligence from a
Global Network of Experts,” n.d.)
T7- Development of Aircrafts

Newer versions of aircrafts produce less noise to as much as 30% than older ones
which make passengers feel safer and less bothered during their flights.
(Chandrappa, 2014)
T8- Improved Systems for Airline Punctuality

The Federal Aviation Administration’s Enhanced Management Traffic System

generates real-time weather and flight data to air traffic controllers, allowing
them to anticipate congestions some 12 hours in advance. By using the system,
controllers are able to plan air traffic accurately, thereby reducing flight delays.
(Armbruster, 1993)
T9- Usage of Modern Feedback Technologies

Online feedbacks like emails after flights and social media channels help airline
companies have a better grasp of obtaining quality feedback from passengers
the way they want to and where they want instead of filling up forms in-
flight.(Kumar & Zymbler, 2019)
T10- Aircraft Health Management and Technology

The aircraft health management system can provide timely access to the health
status of the aircraft, and effective management of the health status of the
aircraft throughout its life cycle. Some of these techs are ATG or Satellite
Communication for real-time transmission of massive aircraft operation data
and the Aircraft Communications Addressing and Reporting System (ACARS)
which generates post-flight messages for fault reports and ACMS event and
configuration reports. (Zhaobing et al., 2019)
 STRENGTH
S1- Juan Effect Program
S2- Profitable low-cost carrier
S3- Cebu Pacific income soars 115.7%
in Jan-June 2019
S4- Cebu Pacific Air: Philippines
market leader
S5- Decongesting Manila Flights
S6- Constant Seat Sales and
Promotions
S7- Launching New Aircraft
S8- Achieves Highest Rating in Safety
S9- Cadet Pilot Program
WEAKNESSES
W1- It has Limited Destination
W2- Cancellation of Flights Due to
Operational Issues
W3- Very Narrow Seats
W4- Trade’s error
W5- Poor Treatment of Employees
W6- Poor Customer Service
W7- P52.11 Million fine due to Flight
Delays and Cancellation
W8- 50.6% decline in 2018 net profits
W9- Seeks Fare Hike

OPPORTUNITIES THREATS
O1- Surge Up of Millennial Travelers T1- Fall in Revenue
O2- Air Transport Employment Hike T2- Potential Delays and Cancellation
O3- Personalized Travel at Fingertips of Flights
O4- Convenience of Online T3- Sudden Increase in Fuel Price
Transactions T4- Decrease of Travel Passengers
O5- Efficiency of Mobile Platform T5- Shortage of Pilot Threaten Aviation
O6 Aircraft Modernization Cuts Fuel
Cost
O7- Equal Rights to Travel
O8- Safe & Secured Travel
O9- Airline Financing at Low
O10- Systematic Airline Punctuality
Monitoring

STRENGTHS
S1 – Juan Effect Program (SMM)

As Cebu Pacific (CEB) targets to fly 22 million passengers in 2018, the airline
integrates sustainable tourism program dubbed as Juan Effect advocating for
responsible travel and environmental protection. The campaign, in partnership
with the Department of Tourism (DOT), is a two-pronged program aimed to
“engage travelers and local stakeholders to mitigate the environmental impact
of tourist arrivals.” (Perez, 2018)
S2 – Profitable low-cost carrier (AFM)

ATW’s World Airline Report special feature cited Cebu Pacific as 5th in net profit
and 8th in operating profit in a list of international low-cost carriers including
USA’s Southwest Airlines and Europe’s Ryanair. They based the financial rankings
on data for the most recent fiscal year. A monthly magazine, ATW has been
covering global airline and commercial air transport manufacturing for nearly 48
years. (Sun.Star Cebu, 2011)
S3 – Cebu Pacific income soars 115.7% in Jan-June 2019 (AFM)

The operator of low- cost carrier Cebu Pacific saw its earnings more than double
to P7.139 billion in the first half of the year, driven mainly by higher passenger
revenues. In a disclosure on Tuesday, listed Cebu Air Inc. said the amount was a
115.7-percent increase from P3.309 billion in January to June 2018. The
Gokongweiled airline’s topline also improved by 18.2 percent to P44.703 billion in
the first six months from P37.835 billion year- on- year, with passenger revenues
growing by 17.8 percent to P33.352 billion from P28.303 billion last years. The
increase in average fares, from P2,734 to P2,974, boosted passenger revenues,
according to Cebu Air. Shares of Cebu Pacific slid by 1.62 percent or P1.50 to
finish at P91 apiece on Tuesday. (Esmael, 2019)
S4 - Cebu Pacific Air: Philippines Domestic Market Leader (AFM)

Cebu Pacific started to pursue rapid expansion in 2005 and has since increased
its passenger traffic tenfold from 2 million in 2005 to 20 million in 2017. Cebu
Pacific became the largest airline group in the Philippine domestic market in
2009 and its domestic market share has been more than 50% since 2013. While
Philippine Airlines is still bigger in the international market, Cebu Pacific now has
a significant international presence and has captured over 20% market share
since 2015. Cebu Pacific has been consistently profitable since completing an
IPO in 2010. Cebu Pacific has outperformed PAL in virtually every metric for the
last decade and has become one of the strongest airlines in Asia. (CAPA, 2018)
S5 – Decongesting Manila Flights (POM)

Cebu Pacific plans to stop operating turboprops from Manila, driving further
capacity growth there, as its Manila-based ATR 72-600s are transferred to other
airports. The group had been planning to move its Manila-based turboprops to
the Cebu and Clark bases. The government’s recent decision to open Sangley
Air Base to turboprop services has opened up the opportunity for Cebu
Pacific to move its Manila turboprop services instead to Sangley, which is
approximately 30km by road from central Manila. In this case, flights will be
decongested from Metropolitan leading to convenience due less people traffic.
(CAPA, 2019).
S6 - Constant Seat Sales and Promotions (SMM)

Cebu Pacific in constantly offering a piso fare they refer to the base fare, the
cost of the plane ticket. It can go as low as 1 peso or even 0 at times. There will
be other charges to be added to the fare such as web admin fees and
government taxes. Regardless, this promotion will give huge discounts and will
allow customers to travel cheap. (The Poor Traveler, 2017).
S7 – Launching New Aircrafts (POM)
Cebu Pacific ordered 16 A330neo and 15 A320neo-line jets worth roughly $6.8
billion, to be delivered between 2021 and 2026. These follow the 32 A321neo
aircraft ordered from Airbus back in 2011, with the delivery to be completed in
three years.
S9 - Cadet Pilot Program (HRM)

The airline will initially shoulder $25 million to train 250 cadet pilots, who will
become Cebu Pacific First Officers and can pay back the investment through
salary deductions. It seeks to address the airline's expansion requirements over
the next 5 years. The training will be conducted in partnership with Australia's
Flight Training Adelaide (FTA). Cadet pilots will undergo a 56-week program that
features integrated flying training, flight theory, and education courses. After
completion of the program, the cadet pilots will become First Officers at Cebu
Pacific, flying both domestic and international routes. (Schnabel, 2017)

WEAKNESS
W1 – Limited Destination (POM)

Cebu Pacific only has limited destination focusing only in Asia. As of now the
total number of destination 36 domestic and 27 international destinations in 17
countries across Asia and Oceania.
W2 – Cancellation of Flights Due to Operational Issues (POM)

Cebu Pacific has been cancelling “approximately 10 flights a day” for the
month of May, on top of the 23 flights it had already cancelled from April 28 to
30. It said in a disclosure to the stock exchange on Tuesday that it is reducing its
daily operations of 400 flights this month to create space in its schedule for
operational recovery. (Valdez, 2019)
W3 – Very Narrow Seats (POM)

Cebu Pacific has very narrow seats, according to a youtuber gablordtv

entertainment (2018). He said it's very inconvenient to get out of your seat as
you have to ask the two people next to you to move and stand up so you can
go to the comfort room.
W4 – Trade’s Error (AFM)

Cebu Pacific Air (CEB) encountered turbulence on the trading floor as its shares
dropped by a whopping 38% on Tuesday, July 9. From around P90 apiece, CEB's
stock price closed at just P58. Brokerage firm COL Financial addressed queries
and told investors that the large decline may likely have been caused by a
trader's error. (Rivas, 2019)
W5 – Poor Treatment of Employees (HRM)

An expanding network and flight crew transferring to higher-paying airlines have

put a strain on Cebu Pacific's manpower, airline personnel said, as the carrier
pushed through an unprecedented wave of cancellations. Under Philippine
aviation law, cabin crew can work for a maximum of 14 hours, to be followed by
at least 12 hours of rest. They also can't fly for 7 consecutive days. “The
manpower is lacking. They added flights without anticipating the number of
those who will resign or take maternity leaves.” a senior airline personnel told
ABS-CBN News. (Domingo, 2019)
W6 – Poor Customer Service (POM)

The poor services provided by Cebu Pacific have angered their passengers and
they express it through Consumer Affairs, a consumer news and advocacy
organization providing consumer reviews. According to Gina of Brisbane (2018),
she would not recommend Cebu Pacific and rated Cebu Pacific 1 out of 5
because the staff were horrible and rude. She said that her mother was a
wheelchair-bound and the staff ordered her mother to wait for another plane
for 5 hours. She also stated that there was no compensation.
W7 – P52.11 Million fine due to Flight Delays and Cancellation (POM)

Cebu Pacific has been ordered by the government to pay a fine of P52 Million
pesos for a multi-day incident at Manila’s Ninoy Aquino International Airport
Terminal 3 that caused delays and flight cancellations for thousands of
passengers during the peak Christmas period. The fine of P5,000 “for each
violation,” as prescribed under the Civil Aeronautics Act of the Philippines of
1952, was the basis of the penalty. (Camus, 2015)
W8 - 50.6% decline in 2018 net profits (AFM)

Cebu Pacific has seen a dramatic change in its net income where in it decline
for about 50.60% in 2018, from P7.9 billion net income in 2017 down to P3.9 billion.
According to CEB, it is due to the high fuel price, intense interest rates in the
Philippine Peso, increased competition, the 6 month rehabilitation of Boracay,
and operational limitations in the country’s key airports. (Aguilar, 2019)
W9 - Seeks Fare Hike (AFM)

Cebu Air Inc., the operator of the country’s biggest budget carrier, is seeking to
raise air fares on the back of skyrocketing fuel costs and the weakening of the
peso against the dollar. Gokongwei said Cebu Air has applied for fuel
surcharges with the Civil Aeronautics Board amounting to P70 to P250 for
domestic flights. (Gonzales, 2018)

OPPORTUNITIES:
O1- Surge Up of Millennial Travelers

Gone are the days when travelling is just meant for foreign education, business
opportunities, and medical purposes. Today, the list of reasons added for
instagram sake. Thanks to the new breed of travelers - the millennials who
consider traveling as venue for updating their social media posts. (S5)
O2- Air Transport Employment Hike

No industry escalates its success without the massive contribution of its

workforce. Thus, the increasing percentage of air transport employment is a sign
of productivity growth and customer satisfaction which will definitely generate
income. (E8)
O3- Personalized Travel at Fingertips

With everything becoming instant, social media is the way to go. Facebook,
Instagram, Twitter and the like make marketin easy and efficient. Through this
platform, promo updates for potential travelers pop up at their fingertips. (S8)
O4- Convenience of Online Transactions

Who wishes to spend money for fare of even waste time just to book and rebook
airline tickets whether for domestic or international travel? Since the advent of
the internet, transactions fir airline services are already done online. This
absolutely brings convenience to the prospects especially those who travel most
often. (T3)
O5- Efficiency of Mobile Platform

Since having a mobile phone whether smart or android is becoming a basic

necessity, reaching the prospective market of airline industry is getting easier
and of lesser cost. With simple click, promos and freebies both find their way to
the browsing public. (T1)
O6: Aircraft Modernization Cuts Fuel Cost

Airline industry requires large amount of operating cost. With the aircraft
modernization, the budget allocation for fuel will be trimmed down. In effect,
other aspects of operation will then be funded. (T6)
O7- Equal Rights to Travel

Any law that recognizes equal rights such as right to travel brings positive image
to the specific industry. This is proven true by Air Carrier Access Act which
warrants the right of disabled person to travel. This gesture motivates the public
to patronize airline industry due to its sensibility to the needs of specially
challenged travelers. (P5)

O8- Safe & Secured Travel

Every industry that provides services to the public must take precautionary
measures to ensure the safety of its clients. This is enshrined in the National
Transportation Safety Board Act. Through this act, enticing the public to travel
more often will just be a walk in the park. (P10)
O9- Airline Financing at Low

Interest Rate Airline industry literally a high maintenance. It expects immense

funding to suffice its operation cost and capital outlay. Hence, with the help of
banks that offer financing at low interest rate, airline companies can produce
more carriers to meet the demand of the market. (E2)
O10- Systematic Airline Punctuality Monitoring

Traffic congestion is not only experienced by land transportation but also air
transportation specially during peak hours. This causes the delay of flights and
takes-off. Through the improved monitoring system of airline punctuality,
scheduled flights will push through avoiding inconvenience to the travelers. (T8)

THREATS:
T1- Fall in Revenue

Most of the airline who encountered such terrorism reflects on their financial
status. Momentarily decrease in demand will have a great impact in their
revenue. (P1, E3, S3)
T2- Potential Delays and Cancellation of Flights

Constant flight delays and cancellations may likewise have a major effect to
their profit. It tends to be a risk to the carrier supposing delays and cancellation
of flights is unavoidable and because of the law under the Air Passenger Bill of
Right, compensation will be given to the travelers that will add up to their
operational cost. (P3, P7, P9, S2, E4)
T3- Sudden Increase in Fuel Price

As the fuel price increases, the expense of an airline company will also increase.
In the other hand, there is a possibility that they might also increase their airfare
for them to gain their usual revenue. (E1)

T4- Decrease of travel passengers

Tourism plays a big role in the aviation industry, thus decreasing the number of
travelers booking in an airline will lead to low demand. This implies that if the
demand decreases, price, profit, sales and market share also decreases. (S1, P1,
E3, S3)
T5- Pilot Shortage Threatens Aviation

As airlines around the world are expanding their fleets, everyone is looking for
people to do the flying. In addition, it takes a tremendous amount of time and
money to train a pilot. (E3)