Cebu Pacific Air: (A Case Study in TQM)

CEBU PACIFIC AIR
(A Case Study in TQM)
In partial fulfillment
of the requirements in
GSTQM
Submitted to
Dr. Brian C. Gozun

Professor
Submitted By
Ernesto M. Santos
MBM Student
May 14, 2011
CEBU PACIFIC AIR

A Case Study on Quality Management
COMPANY BACKGROUND
Founded on 1996 as Cebu Air, Cebu Pacific offers scheduled flights to 33 domestic
destinations, and to 16 international destinations in 10 countries. It is currently
the country's leading domestic carrier, serving the most domestic destinations
with the largest number flights and routes, and equipped with the youngest fleet.
Its main base is Ninoy Aquino International Airport, Manila, with other hubs at
Mactan-Cebu International Airport, Francisco Bangoy International Airport and
Diosdado Macapagal International Airport. The airline is a subsidiary of JG Summit
Holdings, controlled by the Gokongwei family - one of the richest Filipino-Chinese
families based in the Philippines. Cebu Pacific is currently headed by President
and CEO Lance Gokongwei, presumptive heir of John Gokongwei, the chairman
emeritus of JG Summit.
With a company slogan, “It’s time every Juan flies” Cebu Pacific entered the
market with a promise to give "low fare, great value" to every Filipino who
wanted to fly. It operates a fleet of 25 Airbus (10 A319 and 15 A320) and 8 ATR
72-500 aircraft, the youngest fleet in the Philippines. Cebu Pacific remains to be
the pioneer in creative pricing strategies as it manages to offer the lowest fare in
every route it operates.
VMG in Relation to Quality Management
The mission of Cebu Pacific is to bring people together through an affordable,

reliable mode of travel that is delivered with good customer service, and to
enhance the quality of life of the communities and to be an active partner in the
nation's progress. While its vision, is to become the most successful low-cost
carrier in the Asia-Pacific region; to be the best domestic airline and the Filipino
travelers' first choice, recognized with unparalleled genuine, warm and caring
service; to become the pioneer in innovation and commitment to excellence. To
achieve its vision, their goal is to become the employer of choice by providing
many opportunities for professional and personal growth in learning, egalitarian
and non-bureaucratic workplace; by employing quality people and by adopting
state of the art equipment, facilities and systems to ensure consistent highly
efficient levels of operation.
There is commonality and direct relationship in definition. In an airline industry,

the things that the air-traveling public has come to expect are about on-time
performance, schedule reliability and a smooth, comfortable flight. Quality is
defined as the ability of a product or service to consistently meet or exceed
customer expectations.
By emphasizing the importance of customer service, social responsibility, value
for teamwork, care for people, innovation and technology, as core values, there is
adherence to quality.
Several Key Dimensions of service quality which are stated and/or implied in the
previous statements include understanding customers’ needs and wants, access,
communication, security, reliability, responsiveness, and tangibles which are very
important while there is continuous improvement, employee empowerment,
benchmarking, and knowledge of analytical tools in Total Quality Management as
what is implicit.
How Quality is Managed
Cebu Pacific entered the market with a promise to give "low fares, great value
services". They pioneer in creative pricing strategies to manage lowest fare in
every route it operates.
There is re-fleeting program so as to double its capacity. Cebu Pacific is the only
airline in the Philippines operating a 100% brand-new fleet with 24 Airbus (10
A319 and 14 A320) and 8 ATR 72-500 aircraft.
It is the first local airline to introduce e-ticketing, prepaid excess baggage and
seat selection in the country.
Cebu Pacific has partnered with various destination hotels, car rental service,
travel insurance and entertainment ticketing service to provide its guests a more
convenient travel experience. It became the first airline in the Philippines to use
social media, through its Twitter Account.
It uses forecasting. The airline targets to reach the 100 million passengers mark
in 2015. It had more than 1 million passengers in the month of April 2011, a
record for the rapidly growing airline.
Problems Related to Quality
In an airline industry, most of the problems related to quality are sometimes

subjective as in the case of complaints which are sometimes judged against
customer expectations, or emotions or even objective when it comes to talk about
tangibles which are important component in a service industry. Also, there are
external factors we call “force majeure” or “acts of god” which threatens
operations.
For example, in its Clause 8 - General Terms and Conditions of Carriage of

Passengers and Baggage, regarding the schedules, cancellations, delays and
diversions of flights, it says there that, the Airline may cancel, terminate or delay
any flight, or suspend the operation of a flight route at any time after a
reservation has been made only when justified by circumstances beyond the
Airline’s control.
On the other hand, complaints on the tangibles are noted like on issues about
credit card payment facility, on-line check in facility, seat comfort, prices of food
and beverages, food selection, and others.
Best Practices Related to Quality
On-time performance. In Accordance with industry standards, an 'on-time'

departure is one that departs from the designated bay no more than 15 minutes
from the scheduled departure time. Cebu Pacific had an average of flight with on-
time performance, 79.12% in 2009, and 85.10% in 2010. The airline wants to
improve this rating for the next 4 years as paralleled to their targets of 100
million guests passengers on record from its first flight.
Cebu Pacific (CEB) gained an International Organization for Standardization (ISO)

9001:2008 Certificate recently.
This is an upgrade of CEB’s ISO 9001:2000 Certificate obtained in February 2003.

The ISO 9001:2008 certificate guarantees that CEB has consistent business
procedures covering all key processes in the airline. This includes effective
monitoring processes, adequate records for all transactions, and mechanisms for
continuous improvement.
CEB also made history with its original ISO 9002 Certificate and Aviation
Quality and Safety (AQS) 9000/121 Certificate in 1999, when it was given
the distinction of being the first airline in the world with system-wide certifications
from both ISO and AQS. Other airlines are ISO-certified for certain divisions only,
not as an entire organization.
Cebu Pacific is meticulous as an airline. It wants to assure every passenger that

they have world-class safety and quality management systems modeled on the
latest best industry practices. Its rigid maintenance programs and comprehensive
training programs for pilots, cabin crew, engineers and maintenance personnel
have allowed the airline to pass the Civil Aviation Authority of the Philippines’
(CAAP) stringent audits every year, and every other audits conducted by other
regulatory bodies.
Cebu Pacific acquired the following awards that will affirm its commitment to
providing quality service and to protecting the environment;
2010 WWF Partner of the Year Award given by the WWF-Philippines for the
company that has made the most difference in saving the environment. Besting
other WWF-Philippines’ partners like Coca-Cola, Smart, BPI and HSBC, it was
identified as making the greatest impact on the lives of Filipinos.
Gold Award for the Best Established Service Brand Campaign. Marketing
Communication Effectiveness Awards 2005 awarded by the University of Asia and
the Pacific to recognize the most effective brand campaigns across different
industries.
Domestic Airline of the Year, The Kalakbay Awards 2004, considered one of
the most prestigious awards in the Philippine Travel Industry
Gold Award for Best Marketing Program, Air Carrier Domestic Category
Pacific Asia Travel Association 2004, an international award.

Cebu Pacific Air: (A Case Study in TQM)

Uploaded by

Copyright:

Available Formats

Cebu Pacific Air: (A Case Study in TQM)

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Cebu Pacific Air: (A Case Study in TQM)

Uploaded by

Copyright:

Available Formats

CEBU PACIFIC AIR

(A Case Study in TQM)

Dr. Brian C. Gozun

May 14, 2011

CEBU PACIFIC AIR

VMG in Relation to Quality Management

The mission of Cebu Pacific is to bring people together through an affordable,

There is commonality and direct relationship in definition. In an airline industry,

How Quality is Managed

Problems Related to Quality

In an airline industry, most of the problems related to quality are sometimes

For example, in its Clause 8 - General Terms and Conditions of Carriage of

Best Practices Related to Quality

On-time performance. In Accordance with industry standards, an 'on-time'

Cebu Pacific (CEB) gained an International Organization for Standardization (ISO)

This is an upgrade of CEB’s ISO 9001:2000 Certificate obtained in February 2003.

Cebu Pacific is meticulous as an airline. It wants to assure every passenger that

You might also like