INTRODUCTION

Cebu Pacific Air is the leading low-cost carrier in the Philippines, it

pioneered the low fare, great value strategy in the local aviation industry.
Cebu pacific Air adopted the low-cost carrier business model. The core
element of the Low Cost-Carrier (LCC) strategy is to offer affordable air
service to passenger. The group operates with a fleet of 52 aircraft with
extensive route serving 59 domestic routes and 36 international routes. The
Group has 3 principal distribution channels: Online booking; direct sales
through booking sales offices and call center and government / corporate
clients accounts; and third party sales outlets.

SWOT ANALYSIS

STRENGTH
WEAKNESSES
Cebu Pacific Air has the most Additional costs that are being
aircraft for a low cost carrier in
paid by their passenger due to
the country.
website administration fee.
Healthy balance sheet support Cebu Pacific Airs property and
business growth
equipment amounted to PHP
Cebu Pacific Air operates one of
47.73 billion.
the youngest fleets in the world. There is no airbus of Cebu Pacific
Air has reached Europe.
OPPORTUNITIES

The significant safety concern of

the ICA have been lifted.
Cebu Pacific Air made a strategic
alliance with TigerAir Group
European Commission lifts ban on
Cebu Pacific Air.

THREATS
Upcoming typhoons in the
Philippines.
The Value of Philippine Peso
diminishes against US Dollar is a
factor on fuel expenses.
Work schedule might be an issue
when Cebu Pacific Air starts its
operation in Europe and America.

Recommendation / Case Study / Scenario

Cebu Pacific Air mission statement include that they provide opportunities for
professional growth to their employees and they provide safe and reliable trips to
their passenger. In line with this, we recommend that Cebu Pacific Air should impose
strict training to their pilots, and it includes training for flight operations and aircraft
inspection. Their mission statement will only be fulfilled once they das undergone
strict training and they will feel safer. Aside from this reason, Cebu Pacific Air pilot
will also become more efficient and effective. It is like a return on Investment for the
invested trainings of Cebu Pacific Air.

Extremely Sensitive to Changes in the Foreign Exchange Market.

Initiate coverage with a BUY rating. The lifting of the ban in the European
Union will be a very good opportunity for the firm. The lease of addition
aircrafts will also boast the capacity of Cebu Pacific Air. This will further
improve the revenues of the firm. Cebu Pacific Air will also the opening its
door to America. The company will be scheduling flights in the USA at the end
of 2014.
The company incurred huge amounts of losses when the Philippines Peso
depreciated against other currencies. The passenger carried by Cebu Pacific
Air increased this year as opposed to 2012 nut the net income massively
dropped. This is mainly due to the depreciation of the Philippine Peso which
causes the company to recognized losses in their foreign exchange
investment.
Depreciation of the Philippine Peso Against other currencies. The company
has a lot of investment in foreign exchange. The past year, it incurred a
whopping PHP 2, 063, 007,996 loss in foreign exchange. It affected the
companys bottom line severely. The income for the year 2013 dropped
massively. The company reported a net income of PHP 511, 946, 229 for the
year 2013 and its a great decline from the last year net income which was
PHP 3, 572, 014, 263.