Philippines Civil Aeronautics Board ordered Cebu Pacific to suspend the implementation of its new “business rules”, which were launched in Dec-2009, as it considers complaints filed by passengers related to the rules (Philippine Daily Inquirer, 17-Mar-2010). The rules involve stricter procedures on late arrivals and changes on flight plans by passengers. The most common complaint related to the policy of the LCC not to accept passengers who arrive 30 minutes before a flight leaves and to forfeit the tickets of passengers who miss their flights. Cebu Pacific stated that if it is required to remove its business rule, the same should also be applied to other LCCs operating in the Phillipines, particularly Tiger Airways and Air Asia.
Cebu Pacific required to suspend new business rules following customer complaints
You may also be interested in the following articles...
Southeast Asia: A dismal 2014 was followed by a much better 2016
Southeast Asian airlines experienced a significant improvement in profitability in 2015 as fuel prices dropped and market conditions became more favourable after a dismal 2014. However, Southeast Asia’s airline sector continues to underperform compared to other regions in Asia Pacific and particularly to Europe and North America.
Monarch Airlines: group receives new cash from Greybull Capital but profit outlook is down
The latest investment in the Monarch Group by its majority shareholder Greybull Capital avoided the loss of its ATOL licences and the possible suspension of operations. Moreover, it has given Monarch the opportunity to bridge the gap between now and the planned delivery of the first of its new 30 Boeing 737MAX aircraft in 2018.
Nevertheless, Monarch continues to face significant challenges. Europe's short/medium-haul markets are feeling significant downward pressure on unit revenue – particularly in the leisure markets that Monarch serves. This is due to overcapacity and concerns about terrorism in key Monarch markets. Brexit and the sharp devaluation of GBP (it has fallen by 30% against the EUR over the past 12 months) are further challenges for the LCC.
Although Monarch quickly quashed rumours of its financial difficulties in late Sep-2016 and then secured new funds, its commentary indicated that its profit for the year to Oct-2016 would be lower than in the previous year. It has an uneven track record of profitability and has often flown with close to empty cash reserves. Those reserves have been partially replenished, but only sustainable improvements in profitability will avoid the need for further cash calls in the future.