MANILA (3rd UPDATE) – Cebu Pacific chief executive and president Lance Gokongwei on Wednesday apologized to passengers of the budget airline who were affected by delays and cancellation of flights during the holiday peak season.
During the hearing of the transportation committee at the House of Representatives, Gokongwei said sorry for “failing” its millions of passengers.
“Today, 6 of 10 Filipinos choose to fly with Cebu Pacific when they travel within the Philippines. In 2014, we carried almost 17 million passengers to, from, and within our country. I am humbled by their trust that Filipinos and foreign tourists place on Cebu Pacific to take them safely home to their destinations,” Gokongwei said in front of several lawmakers and aviation authorities.
“Last Christmas, we let them down and I am profoundly sorry that we failed them,” he added.
A total of 20 flights were cancelled while another 288 flights of Cebu Pacific were delayed from December 24 to 26, triggering chaos at the Ninoy Aquino International Airport Terminal 3 (NAIA-3).
The airline cited the bad mix of bad weather, absenteeism of ground personnel, and air traffic congestion as reasons for the delays and cancellation.
The Civil Aeronautics Board (CAB) penalized the airline with a P52 million fine because of the incident, basing it on the number of affected passengers, which reached more than 10,000.
Lawmakers have adopted a resolution seeking to address grievances of passengers affected by bad services during the holiday chaos, including the payment of damages.
Gokongwei said the airline agrees that there should be a penalty, but he noted that the airline is seeking legal advice on the accuracy of the amount.
CAB computed the penalty at P5,000 for each of the 10,422 passengers delayed by more than three hours.
However, this amount will not go to the passengers but to national coffers.
Passengers can, however, get refunds for their tickets. The CAB is also studying how on-time performance of airlines will not be affected by aircraft utilization.
CAB executive director Carmelo Arcilla, meanwhile, said Cebu Pacific was not the only airline penalized for violations last year.
Arcilla said PAL Express, formerly known as Air Philippines, was fined P8 million while Emirates was fined P1.8 million last year for selling tickets with CAB approval.
Cebu Pacific's 'soul searching'
Gokongwei said after the events of the holiday peak season, the airline did “a lot of soul searching” to address issues that affected their services.
He said the chaos at the check-in counters prompted the airline to review the performance of its ground personnel.
Among the initial actions taken by the airline to prevent the lack of check-in personnel is requiring its domestic ground handler to immediately take corrective measures, which include focused staff engagement programs to ensure sustainable staff buffers.
A second ground handler was also hired to supplement domestic check-in, and serve as alternative buffer.
Angkla party-list Rep. Jesulito Manalo, meanwhile, raised the matter of contractualization of the functions of key positions of Cebu Pacific operations.
But Gokongwei said Cebu Pacific is not the only airline engaged in such a practice.
Topserve Management has served as the ground handling agent of Cebu Pacific since 2008 for its domestic flights. International flights are handled by Macroasia.
Gokongwei said the airline has also strengthened its management control through a 24/7 hub monitoring of key areas and systems.
He also said Cebu Pacific will be coordinating more closely with the management of NAIA-3 for the use of additional facilities during peak season.
He added that the airline will be assigning one of its brand-new Airbus 320, which is expected to arrive within the first quarter, as a “hot spare” to supplement its existing two Airbus320s.
Hot spares serve as standby aircraft aimed to assist disrupted passengers in case of technical or other delays.
Cebu Pacific admitted that the overcrowding at the terminal may have also been a result of overbooking, but the airline stressed that “overbooking is an internationally accepted aviation practice to have some buffer.” Airlines are allowed to overbook flights by 10 percent to compensate for "no-shows."
According to Gokongwei, Cebu Pacific only overbooked by 1 to 2 percent.
Bayan Muna Rep. Neri Colmenares, however, believes that the reason for the chaos during Christmas was “overbooking, not merely the issue of absenteeism.”
Colmenares said overbooking should be prohibited, arguing that since no-show passengers are already penalized, there is no need for airlines to overbook.
"In fact, it is to the advantage of the airline kapag may no-show dahil doble kita eh. Bakit hindi natin gawing sistema na wala ng overbooking, madami namang waitlisted? Malulugi ba talaga ang airline kung wala ng overbooked at waitlisted lang ang ilagay?” asked Colmenares.
Earlier in the hearing, transportation committee chairman Cesar Sarmiento got the assurance of executives from Cebu Pacific, Philippine Airlines, and Air Asia Philippines that they have removed the fuel surcharge for airline passengers after the price of crude continued to fall.
Fuel surcharge is meant to help airlines cover the fluctuations in the prices of fuel.
CAB ordered the lifting of fuel surcharge on international and domestic flights due to lower oil prices.
The lifting means no fuel surcharge will be collected from all tickets sold from January 8 onwards. -- With a report from RG Cruz, ABS-CBN News