Cacific Air Inc Case Study

Cebu Air Inc. (Cebu Pacific Air) is a low-cost airline company based in the Philippines. It offers both domestic and international flights to its passengers. The company’s headquarters is located in the Ninoy International Airport (NAIA). The company was founded on August, 26 1988 and it is currently being managed by Lance Gokongwei, the heir of John Gokongwei and also the director of Cebu Air, Inc. The current chairman of the company is Ricardo J. Romulo. As of January 2013, it has 3297 permanent employees. Among the 3297 employees, 2565 are from the operations department, 429 from commercial departments, and 303 from support departments (Interaksyon.com). At present, it currently operates 55 aircrafts with 56 domestic routes and 41 international

(Cebu Pacific Air) was founded or established on August 26, 1988, but the company started operating eight years later on March 8, 1996. It was later bought by JG Summit Holdings, which is owned by John Gokongwei. At first, the airline company operated only 24 domestic flights, but by the end of 2001, it had already 80 flights daily to 18 domestic destinations. Cebu Air, Inc. was the one who started the “low fare, best value” strategy amongst local airline companies in the Philippines. The company utilized the low-cost carrier (LCC) model in the year 2005. The low-cost carrier model is a business strategy used by airline companies to bring in more customers. The company used a “quantity over price” method to gain more revenue. Other airline companies have used this method in order to increase the total revenue earned by the company. Based on an article from the May 2008 issue of the Airline Business Magazine, Cebu Pacific Air was recognized as the world’s number one most rapid growing airline company. It also ranked fifth for Budget Airline passengers in Asia, while ranking 23rd around the world. By June 2010, the airline company had already become the largest airline company based on the total number of passengers flown on both domestic and international flights in the Philippines (Seatmaestro.com). The company had a domestic market share of 50% in the year 2009 and further increased as the years pass by (Centreforaviation.com). In February 2014, Tiger Air

These concepts can be seen in the annual reports that Cebu Air, Inc. presents to the government. In Cebu Air, Inc.’s case, the total revenues made by the company increased by 8.7% from the years 2014 to 2015. The company used the concept of percent in order to show how much their total revenues increased within a year. Another concept that can be seen in the report is that there is an increase of 1333/1000 in the operating income of the company. This data utilized the concept of fractions to represent how much the operating income increased within a year. The last concept which was about decimals was also exhibited by computing the basic/ diluted earnings per share (Php) of the company. The table showed that in the year 2015, the company had a total of 7.24 basic/diluted earnings per share. All of the data presented above were all in terms of Php