Cebu Pacific SWOT Analysis

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 client’s accounts; and third party sales outlets.

SWOT ANALYSIS

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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 Air’s 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

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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.

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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 company’s 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 it’s a great decline from the last year net income which was PHP 3, 572, 014, 263.