Republic of the Philippines

Mindanao State University of General Santos City

Barangay Fatima, 9500, General Santos City, Philippines

BUSINESS ETHICS AND SOCIAL RESPONSIBILITY IN THE PHILIPPINE AIRLINE

INDUSTRY: A COMPARATIVE CASE STUDY OF PHILIPPINE AIRLINES, CEBU
PACIFIC AIR AND AIRASIA PHILIPPINES

A Case Study Presented to

Abdul Mahatma Silongan

By Proponents:

MOLINOS, JHANNE DREWZEL P.

TABANAO, MARK VINCE T.
JOAQUIN, JASON LLOYD P.
INOCELDA, KYLE NEO M.
MISSION, TERENCE JAY P.
SARIP, ABDUL BARRY A.
RADI, KHALID U.

May 2023
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 EXECUTIVE SUMMARY

This case study examines the business ethics and social responsibility practices of three
prominent airlines in the Philippine aviation industry: Philippine Airlines (PAL), Cebu Pacific
Air, and AirAsia Philippines. The study provides a comparative analysis of their approaches to
business ethics and social responsibility, shedding light on their commitment to sustainable and
ethical practices.

In terms of business ethics, all three airlines prioritize integrity, transparency, and
accountability in their operations. PAL, as a leading national carrier, has implemented strict
compliance programs, anti-corruption policies, and whistleblower protection mechanisms. Cebu
Pacific Air, a low-cost carrier, emphasizes customer satisfaction, safety, and operational
excellence, guided by a comprehensive Code of Ethics and Conduct. AirAsia Philippines, a
subsidiary of the AirAsia Group, upholds integrity, accountability, and transparency,
accompanied by comprehensive policies and procedures.

Regarding social responsibility, PAL, Cebu Pacific Air, and AirAsia Philippines actively
engage in CSR initiatives. PAL supports various social causes and environmental conservation
efforts, focusing on education, healthcare, poverty alleviation, disaster response, and community
development. Cebu Pacific Air contributes to community development, disaster response, and
environmental conservation through educational sponsorships, disaster relief operations, and
environmental campaigns. AirAsia Philippines supports community development, education
programs, and environmental conservation through scholarships, local entrepreneurship support,
and sustainability projects.

While each airline has its unique approach to business ethics and social responsibility,
they collectively demonstrate a commitment to ethical conduct and societal well-being. By
aligning their business practices with ethical standards and actively participating in CSR
initiatives, these airlines contribute to the sustainable development of the Philippine aviation
industry and make positive impacts on local communities.

This case study provides valuable insights into the business ethics and social
responsibility practices of PAL, Cebu Pacific Air, and AirAsia Philippines, serving as a basis for
understanding their commitment to sustainable and responsible operations in the Philippine
aviation industry.

Keywords: Business ethics, Social responsibility, Philippine aviation industry, Comparative

analysis, Sustainable practices, Ethical conduct, Integrity, Transparency, Accountability,
Compliance programs, Anti-corruption policies, Whistleblower protection, Code of Ethics and
Conduct, Customer satisfaction, Operational excellence, Low-cost carrier, Community
development, Disaster response, Environmental conservation, CSR initiatives

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 INTRODUCTION

The Philippine aviation industry plays a vital role in the economic growth and
development of the country, contributing significantly to its tourism sector. In this case study, we
delve into the business ethics and social responsibility practices of three prominent airlines in the
Philippines: Philippine Airlines (PAL), Cebu Pacific Air, and AirAsia Philippines. By comparing
and contrasting their approaches to business ethics and social responsibility, we aim to gain
insights into their commitment to sustainable and ethical practices in the highly competitive
aviation industry.

The aviation industry is not only responsible for ensuring the safety and comfort of
passengers but also for adhering to ethical standards in its operations. Business ethics encompass
a wide range of principles, including integrity, transparency, and accountability. Understanding
how these airlines prioritize and implement business ethics is crucial to evaluate their
trustworthiness and reliability.

Moreover, in today's rapidly changing world, social responsibility has become an

essential aspect of corporate conduct. Airlines are expected to be socially responsible by actively
engaging in initiatives that contribute to the well-being of society, including community
development, environmental sustainability, and philanthropic endeavors. Evaluating the social
responsibility practices of these airlines provides valuable insights into their efforts to address
societal challenges and make a positive impact on the communities they serve.

By examining the business ethics and social responsibility practices of PAL, Cebu Pacific
Air, and AirAsia Philippines, we can gain a comprehensive understanding of their commitment
to responsible business operations and their contributions to the sustainable development of the
Philippine aviation industry. This case study sheds light on the ethical and social dimensions of
these airlines' operations and highlights their role in shaping a responsible and sustainable
aviation sector in the Philippines.

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 METHODOLOGY

This chapter presents the procedures of the entire study. It outlines the particular steps in
conducting the research paper. This chapter includes the research design, data gathering
procedure, and the data analysis.

Research Design

This case study follows a comparative research design to analyze and compare the
business ethics and social responsibility practices of Philippine Airlines (PAL), Cebu Pacific Air,
and AirAsia Philippines in the Philippine aviation industry. The research design involves
collecting and analyzing data from various sources to gain insights into the ethical conduct and
social responsibility initiatives of these airlines.

Data Collection

The data collection process involves utilizing a combination of primary and secondary
sources. Primary sources include official websites, corporate documents, and reports from the
airlines themselves, such as codes of ethics, corporate social responsibility reports, and
sustainability reports. Secondary sources include scholarly articles, industry reports, and
reputable news sources to gather additional information and insights.

Data Analysis

The collected data is analyzed qualitatively. The analysis involves examining and
comparing the business ethics practices of PAL, Cebu Pacific Air, and AirAsia Philippines,
focusing on key areas such as integrity, transparency, accountability, compliance programs, and
anti-corruption policies. The social responsibility practices are evaluated by considering their
initiatives related to community development, disaster response, environmental conservation,
and philanthropy. The analysis highlights similarities, differences, and notable aspects of each
airline's approach to business ethics and social responsibility.

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Comparative Analysis

A comparative approach is used to identify and contrast the business ethics and social
responsibility practices of the three airlines. The findings are presented by examining the unique
characteristics of each airline and highlighting the similarities and differences in their
approaches. This comparative analysis helps understand how these airlines prioritize and
implement ethical conduct and social responsibility initiatives.

Limitations

It is important to acknowledge certain limitations in this study. Firstly, the analysis relies
on publicly available information, which may not capture the complete picture of the airlines'
business ethics and social responsibility practices. Secondly, as an external observer, the
researcher may not have access to internal processes or confidential information that could
provide a more comprehensive understanding. Despite these limitations, this case study aims to
provide valuable insights into the business ethics and social responsibility practices of PAL,
Cebu Pacific Air, and AirAsia Philippines in the Philippine aviation industry.

The combination of qualitative data collection, comparative analysis, and thorough

examination of primary and secondary sources ensures a comprehensive exploration of the
business ethics and social responsibility practices of the three airlines.

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 FINDINGS AND DISCUSSION

BUSINESS ETHICS

Philippine Airlines (PAL)

PAL demonstrates a strong commitment to business ethics through the implementation of

strict compliance programs, anti-corruption policies, and whistleblower protection
mechanisms. The airline emphasizes integrity, transparency, and accountability in its
operations, promoting fair competition practices and adherence to relevant laws and
regulations.

Cebu Pacific Air

Cebu Pacific Air prioritizes customer satisfaction, safety, and operational excellence,
guided by a comprehensive Code of Ethics and Conduct. The airline places a strong
emphasis on ethical behavior, promoting fairness, honesty, and responsible
decision-making. Cebu Pacific Air complies with local and international regulations and
fosters a positive work environment that promotes diversity and inclusion.

AirAsia Philippines

AirAsia Philippines upholds a commitment to business ethics by emphasizing integrity,

accountability, and transparency. The airline has implemented comprehensive policies
and procedures to ensure ethical behavior, including anti-corruption measures and
conflict-of-interest guidelines. AirAsia Philippines actively engages in fair competition
practices and compliance with relevant laws and regulations.

SOCIAL RESPONSIBILITY

Philippine Airlines (PAL)

PAL actively supports various social causes and environmental conservation efforts. The
airline's CSR initiatives focus on education, healthcare, poverty alleviation, disaster
response, and community development. PAL collaborates with local organizations and

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 government agencies to implement impactful initiatives, contributing to the sustainable
development of the Philippines.

Cebu Pacific Air

Cebu Pacific Air demonstrates a strong commitment to social responsibility through its
CSR programs. The airline engages in community development, disaster response, and
environmental conservation efforts. Cebu Pacific Air's initiatives include educational
sponsorships, disaster relief operations, and environmental campaigns. The company
collaborates with non-profit organizations and government agencies to address social
issues and promote sustainable practices.

AirAsia Philippines

AirAsia Philippines actively supports community development initiatives, education

programs, and environmental conservation efforts. The airline's CSR initiatives
encompass education scholarships, support for local entrepreneurship, and environmental
sustainability projects. AirAsia Philippines collaborates with NGOs and government
agencies to drive positive change and contribute to the well-being of local communities.

COMPARATIVE ANALYSIS

The comparative analysis reveals similarities and differences among the three airlines in
terms of their business ethics and social responsibility practices. All three prioritize ethical
conduct and demonstrate a commitment to societal well-being. However, PAL's long-standing
tradition of corporate social responsibility sets it apart, with a comprehensive range of initiatives
addressing various social and environmental challenges. Cebu Pacific Air and AirAsia
Philippines also actively engage in CSR initiatives, contributing to community development and
environmental sustainability.

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IMPLICATIONS

The findings highlight the importance of business ethics and social responsibility in the
Philippine aviation industry. These practices not only contribute to the sustainable development
of the industry but also enhance trust and reputation among stakeholders. The case study
underscores the significance of integrity, transparency, and accountability as foundational
principles in business operations. The social responsibility initiatives of these airlines
demonstrate their commitment to creating positive impacts in society and addressing key societal
challenges.

Overall, the findings indicate that PAL, Cebu Pacific Air, and AirAsia Philippines are
actively striving to uphold business ethics and social responsibility, albeit with variations in their
focus areas and intensity of initiatives. These efforts contribute to the overall positive image of
the Philippine aviation industry and its contribution to sustainable development and societal
well-being.

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 CONCLUSION

This case study provides a comprehensive analysis of the business ethics and social
responsibility practices of three prominent airlines in the Philippine aviation industry: Philippine
Airlines (PAL), Cebu Pacific Air, and AirAsia Philippines. The findings highlight the
commitment of these airlines to ethical conduct and their efforts to contribute to the well-being
of society.

In terms of business ethics, PAL, Cebu Pacific Air, and AirAsia Philippines prioritize
integrity, transparency, and accountability in their operations. They have implemented policies
and procedures to ensure compliance with regulations and promote ethical behavior throughout
their organizations. These airlines actively engage in fair competition practices, anti-corruption
measures, and adherence to relevant laws, establishing themselves as trustworthy and reliable
players in the industry.

Regarding social responsibility, the three airlines actively participate in corporate social
responsibility (CSR) initiatives. PAL, with its longstanding tradition of CSR, supports various
social causes and environmental conservation efforts, focusing on education, healthcare, poverty
alleviation, disaster response, and community development. Cebu Pacific Air and AirAsia
Philippines also contribute to community development, disaster response, and environmental
sustainability through their CSR programs. These initiatives demonstrate their commitment to
addressing societal challenges and making a positive impact on local communities.

The comparative analysis reveals similarities and differences among the airlines, with
PAL standing out for its comprehensive range of CSR initiatives. However, all three airlines
prioritize ethical conduct and actively engage in social responsibility, contributing to the
sustainable development of the Philippine aviation industry and society as a whole.

The findings of this case study have implications for the broader aviation industry,
emphasizing the significance of business ethics and social responsibility in building trust,
maintaining reputation, and fostering sustainable development. By prioritizing ethical conduct,
transparency, and accountability, airlines can enhance their relationships with stakeholders and
contribute to the overall positive image of the industry.

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 In conclusion, PAL, Cebu Pacific Air, and AirAsia Philippines demonstrate a
commitment to responsible business practices and social responsibility. Their efforts not only
contribute to the development of the Philippine aviation industry but also create positive impacts
in local communities. As the industry continues to evolve, the findings of this case study serve as
a valuable reference for stakeholders interested in understanding the ethical and social
dimensions of these airlines' operations and their role in shaping a responsible and sustainable
aviation sector in the Philippines.

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 REFERENCES

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Cebu Pacific Air. (n.d.). Www.cebupacificair.com. Retrieved May 22, 2023, from

https://www.cebupacificair.com/pages/about/campaigns-and-partners/csr?lang=en-PH

Code of Business Conduct and Ethics – PAL Holdings, Inc. (n.d.). Phi.com.ph.

https://phi.com.ph/code-of-business-conduct-and-ethics/

Corporate Governance Manual. (n.d.). Www.cebupacificair.com.

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-manual

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