Cebu Pacific Paper
Case Context
Cebu Pacific Air owned by the Gokongwei family and established in 1988, is the provider of most domestic flights in the Philippines. In 2000, Cebu Pacific Air was able to go international and expanded operations to Asia-Pacific countries. It owns 45% of the market share, and is among the top 5 in growth in terms of passengers carried and served. The airline company is known for its promo fares, where one can save around 40% to 50%, if flights are booked early. For the longest time, Philippine Airlines, Cebu Pacific Air's competitor, dominated the local airline industry. Through the liberalization program, the latter was able to enter the market and gain its share of customers and passengers. In response, PAL adjusted its prices to compete with the others, and focused its strategies on cheaper last-minute bookings.
Cebu Pacific Air gives importance to customer value, and addresses it by providing hassle-free online reservations, on-time flights, comfortable flying experience, etc. Named as the "World's Number One Airline" by an e-newsletter, the airline has been growing and has continued to make its mark in the Philippine airline industry. Its emphasis on the importance of the customers has helped Cebu Pacific Air to be successful in proving that it is indeed one of the top airlines in the country.
Macro Environment
Prior to the Philippine aviation industry liberalization in 1995 under Executive Order 219, state-owned Philippine Airlines enjoyed virtual monopoly with the country's adopted policy of 'one country, one airline' imposed during President Marcos’ administration. The industry remained uncontested between 1973 and 1994 compelling the government to regulate fares to prevent PAL from engaging in monopoly pricing. In the years following liberalization, the domestic airline industry has attracted as many as five entrants but this has dwindled to three. Currently, the Philippine aviation market is mainly served by Cebu Pacific Air (CEB),
Cebu Pacific Air owned by the Gokongwei family and established in 1988, is the provider of most domestic flights in the Philippines. In 2000, Cebu Pacific Air was able to go international and expanded operations to Asia-Pacific countries. It owns 45% of the market share, and is among the top 5 in growth in terms of passengers carried and served. The airline company is known for its promo fares, where one can save around 40% to 50%, if flights are booked early. For the longest time, Philippine Airlines, Cebu Pacific Air's competitor, dominated the local airline industry. Through the liberalization program, the latter was able to enter the market and gain its share of customers and passengers. In response, PAL adjusted its prices to compete with the others, and focused its strategies on cheaper last-minute bookings.
Cebu Pacific Air gives importance to customer value, and addresses it by providing hassle-free online reservations, on-time flights, comfortable flying experience, etc. Named as the "World's Number One Airline" by an e-newsletter, the airline has been growing and has continued to make its mark in the Philippine airline industry. Its emphasis on the importance of the customers has helped Cebu Pacific Air to be successful in proving that it is indeed one of the top airlines in the country.
Macro Environment
Prior to the Philippine aviation industry liberalization in 1995 under Executive Order 219, state-owned Philippine Airlines enjoyed virtual monopoly with the country's adopted policy of 'one country, one airline' imposed during President Marcos’ administration. The industry remained uncontested between 1973 and 1994 compelling the government to regulate fares to prevent PAL from engaging in monopoly pricing. In the years following liberalization, the domestic airline industry has attracted as many as five entrants but this has dwindled to three. Currently, the Philippine aviation market is mainly served by Cebu Pacific Air (CEB),
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