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Why is Cebu Pacific Such a Horrible Airline?

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We’ve all heard our fair share of Cebu Pacific horror stories. I’ve experienced my own too, from a faulty website to delayed flights. But they weren’t anything that I haven’t encountered at Delta, PAL, or even Singapore Airlines.

That was until the Great Cebu Pacific Christmapocalypse of 2014. While I’m still compiling a lengthy account of that experience (complete with photos + videos of stranded children, crying women, and censorship attempts by security), I couldn’t help but take a deeper look into the company and uncover some interesting facts why it’s such a shitty airline.

I’m no expert in the airline business, but I’d like to believe I know a thing or two about how companies work. In this case, I’m looking at Cebu Pacific with the following context in mind:

  • The airline industry is a tough business. In the US, the average airfare each way is $178 and the airlines would only make 37 cents per passenger trip on average.
  • Cebu Pac is a growing business. 2014 revenues are up 25% year-to-date.
  • The industry is becoming more competitive, with a resurgent PAL, a dominant low-cost competitor in Air Asia, and the desire of foreign airlines to enter the Philippine market.
  • Filipinos are demanding better service, yet are also more docile consumers on average.

This is just the tip of the iceberg. I only spent two hours going through publicly available information in its annual report, quarterly disclosures, and analyst presentations, and I already uncovered lots of reasons why it’s a horribly run airline. I just wrote this today, and this is by no means a definitive analysis.

Place Cebu Pacific under the close, investigative scrutiny of a Patricia Evangelista, Natashya Gutierrez, or Bianca Consunji, and I bet we’ll uncover way more.

Four things stick out:

1. The Board of Directors is stacked with family members and insiders.

No surprise here. This is the Philippines, after all.

For comparison, let’s look at Air Asia’s board of directors, followed by their ages:

  • Datuk Kamarudin bin Meranun (52), Non-Independent Executive Chairman
  • Tan Sri Dr. Tony Fernandes (50), Non-Independent Executive Director and Group Chief Executive Officer
  • Aireen Omar (40), Executive Director and Chief Executive Officer
  • Abdul Aziz bin Abu Bakar (61), Non-Independent Non-Executive Director
  • Fam Lee Ee (53), Independent Non-Executive Director
  • Robert A Milton (53), Independent Non-Executive Director
  • Amit Bhatia, Independent Non-Executive Director
  • Uthaya Kumar A/L K Vivekananda (60), Independent Non-Executive Director

Here’s Cebu Pacific’s Board of Directors:

  • Ricardo J. Romulo (80 yrs old), Chairman
  • John L. Gokongwei, Jr (87)., Director
  • James L. Go (74), Director
  • Lance Y. Gokongwei (47), Director
  • Robina Gokongwei-Pe (52), Director
  • Frederick D. Go (45), Director
  • Jose Buenaventura (79), Director
  • Antonio L. Go (73), Independent Director
  • Wee Khoon Oh (55), Independent Director

Why is this important? Because the board is the highest governing body of a corporation. If customer service is so bad, then either the Board a.) refuses to do something about it (prioritizing fleet expansion instead, for instance), or b.) is incapable of doing so.

Let’s look at the Board one by one.

Ricardo Romulo is the senior partner of law firm Romulo Mabanta. No airline experience.

Gokongwei patriarch John is unlikely to be closely involved in the airline’s operations given his age.

James Go is John’s brother. No airline experience.

John’s son Lance, is CEO of Cebu Pacific. No extensive airline experience before Cebu Pacific. More troubling, Lance also serves as CEO of Robinson’s Land. Oh wait, he is also CEO of Universal Robina.

I’m sure Lance is brilliant. But I am doubly sure airlines, real estate, and food & beverage are incredibly tough businesses on their own. How can he be CEO of all three? The inescapable conclusion is that Lance is Cebu Pacific CEO in name only.

Robina is Lance’s sister. No airline experience.

Frederick Go runs Robinson’s Land as COO. No airline experience. Which begs the question: if we measure Frederick’s and Lance’s performance, do they spend more time in the airline business or in the real estate business?

Jose Buenaventura is a lawyer (and a partner at Romulo Mabanta). No airline experience.

Antonio L. Go is a banker. No airline experience.

The only board director with significant airline experience is Wee Khoon Oh, who used to be with SIA Engineering Co. SIAEC also happens to be the aircraft maintenance contractor of Cebu Pacific. Even so, Wee Khoon’s experience is in aircraft engineering, not customer service or flight operations.

In short, this is a board stacked with lawyers, family members, and insiders. It’s a board designed to preserve control and mitigate risk, rather than to strive for operational excellence and competitiveness.

It’s also a board filled with old people. The average age of the Cebu Pacific Board is 65 (and that is helped by Lance and Frederick. 5 out of 9 Directors – a majority! – are above 73 years old).

The average age of the Air Asia board is 53.

There is a very real possibility that the Cebu Pacific Directors themselves are not aware of the on-the-ground reality because they are unlikely to browse through Facebook, Twitter,  or this blog.

I am sure they are outstanding professionals in their fields. But their skill set does not belong in today’s airline business.

I can end this blog post on this point. But let’s go on.

2. Senior management is no longer the right team for the job.

The role of the Board of Director’s is to be the overall governing body of a corporation by setting strategy, selecting senior management, and deciding on things like acquisitions, capital raising, and management remuneration. Operations is the responsibility of the senior management team, which reports to the board.

If the main issues are a.) delayed and cancelled flights; and b.) poor customer experience (in terms of ground staff operations, check-ins, gate crews, refunds and rebookings), then we should be looking for managers who are in charge of operations and customer service.

We’ve established Lance is CEO in name only. Who’s really in charge at Cebu Pacific?

That would be Garry Kingshott, Chief Executive Adviser. We all know the “Adviser” title is a smokescreen in Philippine business given that public utilities cannot have foreigner CEOs. But with Lance’s multiple roles, it’s reasonable to believe that Garry is calling the shots.

Judging by his LinkedIn profile, Garry is a sales & marketing guy. Cebu Pacific’s focus on growing ancillary revenue (revenue from baggage fees, rebooking fees, etc – which by the way is worth P6 billion) is likely his strategy, given his past experience at Jet Lit India.  He seems to be more preoccupied with international expansion rather than getting down and dirty with local flight operations.

Who runs ground operations? Let’s look at the Cebu Pacific Annual Report.

Capt. Jim Sydiongco? Nah, he’s responsible for flight operations, pilot training, and safety. With a growing fleet and a pilot shortage, his main focus (rightly so) is for the planes to stay in the air. (Remember the Davao crash landing last year?). Rosita Menchaca? Nope. She runs in-flight services.

The most likely candidate is Michael Shau, Vice President of Ground Operations. But this year, he was moved to run the TigerAir division. And even if he is in charge of customer experience, Michael was also running cargo & fuel, catering, facilities, and procurement! He looks stretched.

In fact, looking at Cebu Pacific’s organizational chart, it’s impossible to see who’s in charge of ground operations and customer experience. There’s Benito Cosep, who runs integrated operations control (including flight dispatch and fleet control), and Rosario Santos who runs quality assurance, but they seem too far down the organizational chart to have significant power to influence outcomes.

Contrast this to Air Asia’s senior management featured in their annual report. They have a tough looking guy named Patrick Fennel heading the operations control centre. There’s a head of guest services – Francis Loh, who’s the single accountable person for customer service. Then there’s Terri Chin, group head of quality and assurance. All three seem like they have considerable power.

In Air Asia, there is one person in charge of finance in senior management: Andrew Littledale, the CFO.

In Cebu Pacific’s senior management, there are three: Jaime Cabangis (CFO), Jeanette Yu (VP Treasury), and Robin Cui (Comptroller).

Strategic priorities are allocated with resources, people, and power. Guess where Cebu Pacific’s priorities lie?

The lack of accountability culture at Cebu Pacific is in full force at the front lines. Ground staff were completely afraid to offer explanations for fear that might say the wrong thing.

“CEB personnel did not explain the long lines, saying they were not authorized by their management to give statements to the press,” says an Inquirer report. I saw this myself. When I asked one supervisor at  counter C27 to explain to the 150+ cancelled passengers what our next steps are, he resisted, saying that it wasn’t his job to process cancellations. After 2 minutes arguing, he agreed to send one of his lackeys to speak on his behalf.

3. Investments in human capital have severely lagged passenger growth.

A frequent complaint heard last December 24 and 25 was that Cebu Pacific was severely undermanned. There were not enough people at the check-in counter. My boarding gate didn’t have an agent for two whole hours. And when I finally was given a hotel room, the guy who coordinated the transfer and hotel booking told me there were only three of them that night who handled thousands of irate rebooked customers.

Contrary to what they want you to believe in the press, this wasn’t just a one-time incident over a busy holiday. It’s a structural problem.

The proof, again, is in the annual report. But you need to dig deep into the notes section.

Cebu Pacific’s Revenue Passenger Kilometer (RPK) grew 12.1% in 2013. RPK is the number of paying passengers on an airline multiplied by the distance traveled. If an airline were a factory, RPK is the measure of an airline’s production output.

Yet, despite the growth, note 21 in the annual report indicates that staff cost only grew 2% in 2013 (P339.7 million in 2013 vs P332.9 million in 2012). Output grew 6x faster than the growth in staffing. No wonder the ground crew felt swamped.

Now, under note 20, the accounts “Flying Operations” and “Aircraft and Traffic Servicing” both contain sub-accounts called “Others”. In the note, “Others” is said to pertain to “staff expenses incurred by the Group such as basic pay, employee training cost, and allowance“. It doesn’t exactly say if staffing cost is the ONLY item under that account. There could be others.

But let’s give them the benefit of the doubt and assume that that it’s all staffing costs. Note 20 + note 21 then implies that total people costs amounted to P921.9 million.  This is equivalent to 2.2% of Cebu Pacific’s 2013 revenues of P 41 billion.

But if you look at Air Asia, which did RM 5.11 billion in revenue in 2013, staff costs were RM 610.9 million, or 12% of revenues! Now, even the higher wage levels in Malaysia vs the Philippines wouldn’t be able to entirely account why Air Asia spends 6x more on people than Cebu Pacific.

The whole “we didn’t anticipate the Christmas surge” reason doesn’t fly. This is an airline that obviously tracks RPK, and thus would have month-on-month information on passenger volume.

4. Finally, there are the rumors that Cebu Pacific is being window-dressed for a sale. Nope, not the “piso-fare” kind of sale, but a divestiture of the company to a strategic buyer. After all, the Gokongweis might be starting to realize that it is hard pressed to compete in an open skies environment across Southeast Asia, and would thus be willing to consolidate rather than compete. The group showed its willingness to do something similar in the Sun Cellular sale to PLDT.

Basically, a push for a sale encourages Cebu Pacific to prop up its bottom-line to maximize its market capitalization (and a larger return to the group if a sale occurs). And because profits tanked in 2013 (net income declined 86% from P3.6 billion in 2012 to P512 million in 2013), there is a strong reason for the company to scrimp on expenses in 2014.

In summary, it’s really hard to say what’s going on. All of the above is based on publicly available data. If you know something, get in touch.

My theory: Cebu Pacific is run by a Board that is designed to retain control of the Company rather than to embrace outsiders with the expertise and experience to run a growing low cost airline in a challenging competitive environment. This may have been an adequate Board 10 years ago, but not today. Its senior management is poorly structured, and there is no accountability for key passenger requirements, namely for excellent customer service. It’s underinvesting in human capital. While it’s also pursuing international expansion, management is also considering a sale of the company, and is thus incentivized to prop up the bottom line at the expense of making the investments that lead to operational excellence.

Stay tuned for my next post on how Cebu Pacific stole Christmas Eve.

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159 thoughts on “Why is Cebu Pacific Such a Horrible Airline?

  1. ANONYMOUS says:

    Why is this Article Shitty?

    1.) facts are gathered from non reliable sources.

    2.) he pertained to Davao incident as a “Crash”… How stupid can a person be to compare overshooting from a crash? Even my 5 year old nephew would know, dipshit.

    3.) comparing Air Asia to Cebu Pacific? A closing airline to a continously expanding one? Yes, Air Asia Philippines in going bankrupt, asshole, hows the “board” doing now, ASSHOLE?

  2. Allen says:

    There is no such a perfect Company or a Perfect management… we are all humans and regardless we are expert or not we do still make mistakes… For me Top management pays to decide to their company for the better we might not know what is the real reason but I do sure that is their best solution….

  3. darkman says:

    I was there on the 24th… to be told (after waiting 6 hours) by the only 2 people at the cebu check in desk that the plane has finally arruved but now there were inexplicably NO MORE CREW is plain ridiculous. We are not talking about a fast food chain here people… Ow and yeah, those 2 people were juniors who were confused and scared shitless who also told the angry passengers that they couldn’t find their manager anymore. If it were an issue of french fries and burgers I would’ve understood but…

  4. Carl says:

    When you pay less dnt expect to have quality service or goods.. Cebu pacific is owned by the Filipino-chinese . They thrive on quantity rather than quality.. Have you tried chinese made sneakers? They tear down before you reach your home from the store..lol

  5. Clearly they missed the very fundamentals of Volume (work) vs Resource staffing . So basic yet so dangerous in any line of business that deals with people transiting.

    How do you miss the “surge” when:

    1. You have an online booking system which..
    2. Gives you an IMMEDIATE forecast of what volume you will be facing on a VERY SPECIFIC TIME OF THE DAY (in lieu of timing+ day+ booking confirmation).

    With this rich historical data they have, they can:

    1. Tie the above information to their work force management group(if they even know what this is) and do a resource forecast requirement and schedule.

    Geez .. they can actually go to the granular level of BY THE HOUR.

    2. Create a bullet proof contract to ensure staffs comes to work on critical periods.
    3. To endear the staffs, INVEST ON PEOPLE REMUNERATION PROPERLY.

    This is corporate governance 101: Bottom line grows when you do a bit of investment on people resource (this covers all avenues from training to scheduling to proper incentives).

    I am not even going to talk about the customer service aspect of this line of work.
    Common Cebu Pacific Board of directors, give the work to people who REALLY knows how to run the business.

    There.. Pro Bono consultancy.

  6. my sister in law has a bad experienced cebu pacific international airline.from Saudi Arabia Riyadh to Manila. they have been waiting 6 hrs delay in the airport,before boarding,

    they pay money for the food.the first time I heard about this…

  7. Glen Oban says:

    My good friend reached out to Goks (that’s Lance’s nickname) to relay a problem a passenger had. Goks asked who the person was. When it was revealed that he was a well-to-do businessman, the reply was “well, he’s not really our market”.

  8. Overgeneralizer says:

    Nagkaoperations problem lang, top management problem na agad-agad yung main culprit?

    Hindi pwedeng natanga yung operations at hindi nakapaghanda?

    Yung edad agad ni JG yung may kasalanan?

    Tanga mo rin eh noh, patalino ka rin eh no ungas

  9. I have been flying Cebu Pacific at least quarterly for the past 15 years. I never experienced any major delay or cancellation. The staff at the counters were always courteous and efficient. Was I one of the lucky ones? I am sure that the company will address the problems that were encountered on December 24 and 25.

  10. MATTHEW HALOS says:

    I saw a very big advantage during this event. If a certain flight is overbook, and you have been denied to board, you will be given an option to rebook to the next available flight to your destination, and, here is the great part, you will be given a FREE ROUNDTRIP TICKET! This freebie also applied to flights that were delayed an hour or more.

  11. Simon says:

    Well.. First of all. The board of directors is just a name in the corporation.

    In a business.. You hire professionals to work for you.
    You are the boss. You manage the right people to run the business. In return you compensate them.

    I believe There are professionals behind cebu pac. Even if their names are not in the corporation. Even if they have sloppy customer service. The main thing here is that they earn money. And that is the single most important reason to run a business.

    Look at lucio tan. He is the perfect example of jack of all trades. None of his business hits number 1. But they are all pretty much successfull. And he earns sh!t loads of money.

    If you dont like them. Thats fine. There are other competitors out there. But to judge the board is so wrong.

    You know in business. The gauge in being successful is earning money. Thats just it. Plain and simple. Whats the point in having the perfect customer service if you are not earning.??

  12. Great in-depth article but isnt this expected in high-peak season? Especially, this is the Philippines…lol. No other airline can beat Cebu-air prices, period! Less than 2000p to have round trip flight anywhere in the country? Who can beat that?

    I can understand the under staffing issue and that is the RISK they are taking to keep rates incredibly low. As long as the planes dont fall out the sky..haha. Hell, even the planes they are flying us in are made for cattle and chickens! LOL!

    I go to the Philippines every year and i’ve never had a problem traveling with Cebu Air except for maybe being delayed 30-45 mins. I always travel NON-PEAK season. I was booking flights 7 days-5 days prior to my destinations and even then everything went smoothly.

    Advise here is DONT fly during peak season!

    It more fun in the Philippines!

  13. Mickey Lim says:

    Good article. You did a decent analysis despite the time and resource constraints. Kudos! As a operations consultant, I would just like to build that it’s likely that there is no direction by CEB to improve its systems and structures. Has there been any industrial engineering study of operations or structure? Probably not because as you said, the top management lacks the expertise or familiarity to do such a thing.

  14. I came to the Philippines for the first time three years ago to use it as a transport hub for the six months a year I spend in Asia.

    Cebupacific have been essential to my travel economics with flights to Taiwan, HK, Malaysia and others a fraction of the cost of an Australian city to city flight.

    I’d average 6 return fights a year … Total 12 flights.

    I’m happy to swap to other airlines if they have lower prices (rare).

    Haven’t had a whisper of a problem.

    Interesting that other foreigners above seem to reflect my fairly positive experience.

    Maybe it is good luck, but that’s three years of it.

    Just got a slightly more convenient timed flight with PA Back to OZ and it was a badly handled delay for a late night NAIA flight.

    Points might be good about the board, but remember that Cebu has lifted its safety rating and is now allowed to fly in USA airspace.

    So there are accomplishments there as well.

  15. mgr says:

    hours and hours of delays during the holidays happened to anyone traveling this christmas season may they be flying on cebu pac or pal. we have to admit though the entry of cebu pac has made traveling affordable for everyone. true that they have fouled up last christmas season but really it also happened to air phils before… they have overbooked their flights. anyway, imho, improving customer service, reservations system would help any airline prevent a “christmas” flight chaos to happen again … and most of all, if our airports — naia to be exact — would be equipped with better facility to ease air traffic congestion that would definitely make things better.

  16. marco polo says:

    all.of.this are true enuf. actually peoole doeant have a choice in terms of airline for low cost in the philippines. PAL express is ok but doesnt even give some promotions for domestic or international flights like.piso fare or whatever promotions. Air Asia zest, well yeah but do you even wonder why they dont expand their flights like HK or SG or BANGKOK? ive heard that some politicians are stopping the expansion of Air Asia bec it will be a big competition to Cebu Pacific and they know that if Air Asia will enter fully philippines, Cebu Pacific will have a chance to lose a lot…

  17. ERG says:

    All positive comments made are relatives of the owner and CEO, they are blind and will say anything positive about Cebu Pacific, how pathetic!

  18. Jessica says:

    Are you from Air Asia? Looks like you are.

    In fairness to the company, they apologized for what happened. It is difficult to say that you are wrong in a social media site, right?

    And who are you to judge the board members, the employees or even the passengers? Perfect? Cmon. If you know better, then apply for a job in the airline. Based on your article, it is just pure hate.

    The hassle can happen anywhere and anytime. Not just in CebPac. Everyday is not a happy day, baby. Learn to accept the fact that NAIA airport sucks (for the delays) and shit happens (For your so called “apocalypse”)

  19. krizzydelrosario says:

    Hi first all of all, if you dont want to take Ceb Pac, then dont? Cebu Pacific.is not begging you to take there flights.

    Another thing, if you were complaining delays, then why not complain to the government why is the airport so small, all the bridges are broken, why do they only have 1 run way available for taking off and landing of aircrafts.

    And lastly, do not ever compare 5j’s service to other airlines cause I tell you,

    IN TERMS OF DEDICATION THEY GIVE MORE THAN WHAT THEY DESERVE.

    THEY GIVE YOU 10 TIMES THE SERVICE OF WHAT YOU ONLY PAY.

    AND NEXT TIME YOU IF YOU WILL MAKE ANOTHER BLOG PLEASE MAKE SURE ITS NOT A NON SENSE THING LIKE THIS CRAP. 🙂

  20. Potatomatoes says:

    You’re only as good as our last job – so the say, or as what the public would generally say at first instance for customer service. For whatever plans they have for the Company, well that is their right. Sell it? Go ahead.

    If you don’t like their service then don’t fly.

    But in general, I don’t know where I stand with this, because I also have benefited from the low cost air fare of the airline a few years ago but at the same time had to endure long lines, rebooked flights and delayed and early flights against scheduled time which meant additional expenses for rebooking fees and major overhaul on travel itineraries.

    Anyway has anyone opened the argument that airline operations here in the Philippines should be provided by international carriers other than exclusively by our local airline operators? I’m not sure if I’m right here but I think current laws prevent foreign airlines to operate and open ticketing offices here in the Philippines. It won’t kill the local airline industry it could instead boost competition.

    *lastly, i just have to say this, there is nothing wrong in analyzing a Company’s financial from an annual report. That is exactly the purpose of one.

  21. Pepito says:

    I fail to see what the “badly written article” group of people are talking about. It made a whole lot of sense to me when I was reading it! No one deserves crappy service and I am sure no one wants to provide crappy service either. The airport (or cebupac for that matter) cannot be full of individuals who wake up each morning determined to suck at their jobs. Do you go to work to try to get yourself fired? It really can only mean there is too much work compared to the number of people doing them which resulted in this debacle. I agree with this article.

  22. What I gather is old man John follows a simple business philosophy based on his highly successful junk food/snack ‘Chippy’ — it’s the cheapest snack on the market, but you really don’t want to know what’s in it. Likewise CebuPac, cheap fares, but don’t ask what they do to make it happen.

  23. Ghost says:

    As a foreigner who was once employed by CP, this article is a good start. CP has huge problems, bigger than what’s been written here.

    You are correct about Kingshott, he is in fact the CEO of CP. His resume tells the tale, he has put his previous companies into bankruptcy and folding. His focus is money and to hell with everything else. One of his famous quotes “Safety is a waste of money.”

    As long as CP is making money, the shareholders and board members will do nothing. LYG is an absentee owner leaving the day to day operations to Kingshott.

    Deeper down, CP has HUGE problems with their flight operations department. Totally disorganized, run by incompetent individuals who only want titles and don’t understand their positions. Training is abysmal, at best. If this airline was in any other country other than the Philippines it would be shut down on an operational standpoint alone.

    I will not travel on CP, nor will I allow my family to get on these planes. I value my life and my families lives more than a cheap ticket. CP is headed for a major accident.

  24. Thatguy says:

    Cebu Pacific is a horrible airline but it wouldn’t have been so disastrous if we also didn’t have such horrible airports! Seriously this airport(NAIA) was not designed to handle so much passengers and planes. Just look it up, NAIA is handling WAY BEYOND THEIR INTENDED CAPACITY! Not to mention that Terminal 3 is lacking on so lacking on facilities, I should know my father was one of the engineers involved in cost control when it was built and there are too many things that have deviated from the original plans because there was rampant corruption that he had to resign.

    I hate Cebu Pacific, we encountered this situation near Christmas 2 years ago where there were too many damn people. But the bottom line, our airports were not designed to handle this amount of passengers ever. It already exceeds passenger/plane capacities daily and how much more on a Christmas season?
    Also… ALL AIRLINES ARE FUCKING GREEDY! THEY CHARGE WAY MORE IF YOUR BOOK NEARING CHRISTMAS SEASON, TWICE THAN ANY TIME OF THE YEAR! You may say to book in advance but that that is inhuman especially if you are on an emergency!

    Can’t believe how CAAP and other aviation authorities are getting away when they should also be blamed for this. The enemy isn’t just Cebu Pacific, think outside the box people.

    The airline industry is so fucking lax. Government doesn’t have control and can’t provide decent airports for us. No matter how good the people running an airline is, it doesn’t matter shit when we have shitty airports in the first place.

  25. mondo says:

    middle management of ceb are not equipped w/ sound discretion on critical matters pertaining to ground operations.i.e re align flights or extra sections for support, as said that they have ample new planes.Front line supervisors and managers are nominal tiltles only that don’t have powers to decide on amenities for passengers who are affected by flight disruptions.I just wonder , How did they come out w/ a station operations manual? do they have one? All of the above are based on actual scene that ceb staffs are just mechanical workforce focused only on what they are supposed to do.As a customer, you cannot vent your ire on them . As the saying goes ” you pay piso,you get piso service too”.

  26. kinaguapahan says:

    I have been working with the airline industry for the past 12 years and what the issue in here is what other airlines have experienced every year. I am working now with one of the largest airlines in the world with what I call it closest to best service and yet we had the same struggle as staff. Cebu Pacific is far enough to be considered as a horrible airline. You should try other low cost carriers outside Philippines and then you will see. Other low cost carriers will never initiate of giving free tickets not even food to eat and water to drink while on disruption.

  27. Mas says:

    say what you want but nobody can ignore the fact that CebuPac is a game changer and revolutionized the way we travel.
    This to me sounds like a kiss-ass article to Air Asia

  28. Ash Urdaneta says:

    If only CebuPac has a competition in between VisMin routes. Too bad AirPhil/PAL express ceased their operations. Now that CebuPac has monopolized this route, passengers (like me) have no choice but to succumb bad customer service just to get to our destinations. Davao to Cebu or to Manila hub, no prob, I can always choose PAL or AirAsia.

  29. mark flyer says:

    Tip of the Iceberg

    Well written macro perspective from the board. Your insights directly reflects based on my experience flying with Cebu Pacific, here are my reasons why.

    1. We get what we paid for. Response is cheaper for we are paying cheap.

    For the past year, CebPac was able to offer cheaper flights compared to AirAsia. Airasia 2 to 3 years ago, upon resurgent entry to the Philippine market has been very aggressive in pricing against CebPac, but I have noticed upon Air Asia’s acquisition of ZestAir, they have increased their prices higher.

    2. Some Great Staffs with Low Softskills Training.

    Ground Crew
    Based on my experience, CebPac ground crews from Clark are more solution oriented than in Manila. CebPac ground crews in Hong Kong and Singapore generally favors Filipino Tourists from OFW and Domestic Helpers.

    Cebpac Ground Crew in Terminal 3 Manila treats everyone like sh*t. CebPac’s ticketing office customer service provided at T3 varies around 60% hopeless to 40% amazing.
    But why? It’s because an obvious lack of training. And also since passengers buy cheap hence most (but not everyone) have a tendency to act and talk cheap and the undertrained and undermanned CebPac ground Crew are more than willing to reciprocate.
    I have experienced having sex with a ground crew in uniform I met at T3 once.

    FAs are mostly all smiles but I notice that they are really really tired with some of the rowdy passengers. I feel sorry for them

    But lastly, it is about the
    Gokongwei Corporate Values
    You see no pride from employees since Gokongwei are there only for the money afterall it is a business. Let’s see how they have handled their previous and existing businesses:
    Malaya (broadsheet, ceased ownership after publishing a frontpage FLY report that made then President Estrada) – my friend who worked there had been earning a regular pay even for an overtime.

    Sun Cellular (surrendered to PLDT)- Founded the Unli sms and call industry. But after years of VERY LIMITED mobile phone signal and “Tin Can” call voice effect, they gave it up to PLDT.

    Summit Media – FHM. Jobstreet. KMag. Been there, the environment is stiff sometimes discriminating but the pay is way way low.

    Robinsons Land – Complaints on East Of Galleria’s deliveref units made of cheap materoals but priced same with Ayala will surprise you.

    Robinson’s Galleria Mall – Check their mall’s stingy restroom

    Robinson’s Bank Galleria Branch- ultra creepy, very dirty.

    I hope that they won’t crash the plane on my succeeding flights.

  30. the facts speaks for itself. cebu pacific being a family corpiration main purpose is profit. the leadership and governance is severely lagging and lacking in commitment to customer service. the business model of today lacks the initial passion when they started decades ago. the board exemplifies an outmoded mix of “names” that has no credible bearing and pedigree. in commercial aviation. run cebu pacific as a professional customer service organization.

  31. I’d rather fly PAL or Singapore Airlines for most of my travels locally or internationally. It doesn’t hurt that much to pay an extra mileage for better, if not exceptional, service. So far, I have not been failed by both flagship carriers. Just saying.

  32. John says:

    Mind you, the board of directors is accountable to the stockholders of the company. Unfortunately, clients are not stockholders.

  33. lordvito9 says:

    This was a interesting and thank you for writing it. I may disagree on some small points but overall I found it interesting. In the end only competition against cepac can improve cepac. While business in the Philippines can be next to impossible, it will happen. I personally have big plans in this particular space.
    Thank you

  34. Matt M says:

    Actually I think this is an remarkable article as it is attempting to look at an emotive issue from a pragmatic point of view – great work Oliver.

    For large companies with mass markets such as Cebu, in a country desperate for infrastructure improvements and leadership for an ASEAN economy, there needs to be a higher benchmark for performance and ever greater scrutiny of how a business operates. It’s not enough to simply say a business won’t last long, or that it will have to change eventually – with so much depending on a successfully operating Cebu Pacific everyone has a vested interest in seeing the fastest possible improvement – and that can only ever come from sustained, public dialogue. Or a visionary leader with sufficient backing.

  35. If you’ve seen this article, don’t believe it. The author’s points don’t lead to the conclusions he makes. An analogy is ancient Greeks believing lightning came from Zeus, and the proof being the lightning itself.

    Let’s go through his points:

    1. Cebu Pacific is poorly run because the board is older than Air Asia’s board. – Lots of successful companies have boards that are the same age as Cebu Pacific’s.

    2. Board members don’t have airline experience. – A board of directors is dealing with corporate governance, not airline operations. John Scully got hired away from PEPSICO to run APPLE, for Chrissakes. Business management principles apply across industries.

    3. ALL OF SECTION TWO of the article is conjecture, with the author’s qualifications of Air Asia’s ostensibly superior personnel being an air operations person who is “tough looking” and the customer service head and QA head “seem[ing] like they have considerable power.” He goes on to say “In Air Asia, there is one person in charge of finance in senior management: Andrew Littledale, the CFO. In Cebu Pacific’s senior management, there are three: Jaime Cabangis (CFO), Jeanette Yu (VP Treasury), and Robin Cui (Comptroller).” There’s one person in charge of finance at Cebu Pacific too: the CFO. That’s what the “C” is for. HELLO, do you think Air Asia doesn’t have a comptroller too?

    4. The author says nothing about what actually causes the delays, because he doesn’t know. He’s armed with a bunch of corporate governance info from the annual report and doesn’t know a damn thing about what’s happening on the ground. If he was talking about the fact that Cebu Pacific’s terminal at NAIA is rated for around 60 plane movements per hour and they are doing 180, I’d be less inclined to dismiss him. If he then mentioned that the only way to bring that number down is to buy more slots, which creates more expense, which results in higher ticket prices, then I’d think he really understood Cebu Pacific’s business.

    But this is an amateur who thinks he’s on to something because he read the annual report, which has led him to believe the problem is in governance (which is all the annual report is concerned with).

    Cebu Pacific has service issues, for sure, but this article is titled “Why…” without answering why.

  36. ree says:

    So far, for years of being a CebuPac user/consumer/passenger/ promo abuser or what not, im blessed not to have encountered such hassles during my trips. I guess Im really not expecting much too much world class service from them when I know how much (or little) I paid for… when you know it’s peak season, you need to prepare yourself as well like the apolcalypse-like traffic in Manila, you should make adjustments. Set expectations that there maybe flight hassles and delays… for once I experienced almost an hour of take off delay on the runway…we are all already onboard the plane on the NAIA runway almost ready to lift off but then the plane stopped. Not of any faulty whatevers but what I saw was that CebuPac and airport traffic controllers giving way to landing of 3 different international airlines. I immediately thought of how humble Filipinos could be, patient enough to wait just to make sure we show hospitality to other countries just by letting their planes land even if we know that theirs have been delayed, otherwise we could have lifted off on time…

  37. If there’s no stiff competition, the quality of service will remain a second priority. How I wish international airlines will have domestic flights in the Philippines so Cebu Pac and PAL will be forced to improve their services.

  38. kevin butler says:

    i have travelled with cebu pacific on several occasion no problems they do a great job clean new aircraft polite cabin crew fir fares i will go many places from manila when i am there again for sure good on you cebu pacific i recommend my friends if they are in manila get a cebu pac flight say example hong kong you wont regret it all the best c p hope you could come to aust kevin

  39. Guest says:

    Granting that this is from an outsider’s perspective, it is totally understandable that you view the airline in such way.

    Delays are not just the airlines’ fault but a result of other factors such parking bay availability, weather, and air traffic, the number 1 factor.

  40. Menchu says:

    People really believe that Cebu Pacific is cheap.. If you buy your tickets ahead of time, you can compare PAL and Ceb Pac are the same if not a few pesos difference only. If you buy it when in need, it is even more expensive in Cebu Pac than the other local airlines..
    The real problem in Cebu Pac is the one calling the shots and that is the foreigner who does not know the Filipino culture .. Find out what he did in the Indian airliner and why he is no longer connected with them.
    We have so many qualified Filipinos with enough experience to run the airline, but this colonial mentality still reigns and both Cebu Pac and Pal have foreign consultants calling the shots! Are we so inadequate as a race that we cannot even find one qualified person in this country?
    Front liners , middle management run the daily operation.. The Board simply meets quarterly to “assess” the state of finances and operation.
    I worked in the airline for 35 yrs and I have an idea on what the board does.. The vice presidents , managers are the ones running the show and those foreign consultants who think they know what they are doing!

  41. It seems 5J’s investment in hiring agencies to do their social media sentiment tracking is paying off. Just look at all the shills defending CebPac by attacking the author instead of talking about the issue at hand.

  42. Veen Tega says:

    Based on this article, i can conclude that CebPac is only up for higher revenue without taking equal consideration to its customer service enhancement due to obvious managament composition, motive & competency. Another point here pertains to an alternative airline company which is the Air Asia. Just a question, is Air Asia’s number of flights and destinations equal that of CebPac? If the answer is yes, then let’s give Air Asia a try. On the other hand, i think this actually a way of selling new idea(airline) amid CebPac’s infamous situation. Just my point of view. What a marketing strat. Anyway, both points were obviously unwrapped for the readers.

  43. why are you comparing Air Asia and Cebu Pac? What does the board got to do with it? Crisis happens and companies should learn from mistakes and make their operations more efficient after. Let’s see how these 2 companies, rise up from difficult situations?

  44. Bert says:

    Rumors? Age comparisons? Etc. Are you kidding me? Is that how they teach you to make a case at Harvard MBA? Good point though about bad service dec 24/25.

  45. Bert says:

    Btw, I just googled– the average age of the board of directors in the US is 68. Cebu Pacific is 65 and air asia is 53 (?) and its CEO is 40. Pards, again sloppy analysis.

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