Cebu Pacifics Christmapocalypse meltdown gave competitors a lot of free advertising. An eye-opening article on how Cebu Pacific stole Christmas Eve. Ive always been baffled by this company simply refuses to improve itself. As always, the financials offer the strongest clues. The shoeshine boys at NAIA3 told me that hundreds of passengers were abandoned at gates, waiting for non-existent flights, while check-in agents absolutely refused to inform them that the flights had already been cancelled. When even the shoeshine boys know the inside story, you know its really bad. During the market crash in 2008 the shoeshine boys on Wall Street were already selling before the investors were. My boarding gate didn’t have an agent for two whole hours. The guy told me there were only three of them that night who handled thousands of irate rebooked customers. 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. 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. :looking at Cebu Pacific’s organizational chart, it’s impossible to see who’s in charge of ground operations and customer experience. There are three different executives in operations, Cebu Pacific’s Revenue Passenger Kilometer grew 12.1% in 2013. Yet, despite the growth, staff cost only grew 2% in 2013. [Volume] grew 6x faster than the growth in staffing. No wonder the ground crew felt swamped. Finally, there are the rumors that Cebu Pacific is being window-dressed for a sale. Basically, a push for a sale encourages Cebu Pacific to prop up its bottom-line to maximize 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. As usual, it is the bottom line that reveals the true picture. You run a company with P41 Billion (almost $1 Billion) in revenue but you only make P512 million in profits. Thats a drop from P3.6 Billion in the previous year!! You cant cut costs forever to increase profits. At some point, the company simply runs out of funding for operations and fulfilling product delivery. Then you get a mob out for your neck, and justifiably so. Because you took their money. oliversegovia/2014/12/26/why-is-cebu-pacific-such-a-horrible-airline/
Posted on: Sat, 27 Dec 2014 12:56:46 +0000
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