Like its owners and founders, the success story of Cebu Pacific is nothing short of remarkable. Starting small with a clear vision, they persevered through adversity and skeptics, ultimately revolutionizing the aviation industry in the Philippines. This March 8 marks the airline’s 27th anniversary since its founding. It’s a perfect opportunity to reflect on the history and journey of Cebu Pacific, recognized as Asia’s first low-cost airline and the leading domestic airline in the Philippines.
Founded in 1988 and commencing operations in 1996, Cebu Pacific has the distinction of being Asia’s oldest low-cost airline which operates scheduled flights to numerous domestic and international destinations.
The airline has two main hubs in Manila and Cebu, as well as five secondary hubs in Iloilo, Davao, Clark, Cagayan de Oro, and Kalibo, and a focus city in Zamboanga. This extensive network enables Cebu Pacific to serve a wide range of passengers and cater to the varying travel needs of its clientele.
By adopting a low-cost airline business model, Cebu Pacific has been able to achieve unparalleled success in the airline industry. In 2010, the airline overtook Philippine Airlines (PAL) to become the largest airline in the Philippines in terms of passenger numbers. In the first quarter of that year, Cebu Pacific carried 2.45 million total passengers, compared to PAL’s 2.34 million systemwide during the same period, according to the Civil Aeronautics Board data.
Cebu Pacific’s success can be attributed to its commitment to providing quality service at an affordable price. The airline’s low-cost business model has enabled it to attract a large customer base, making it a popular choice for budget-conscious travelers.
Humble Beginnings
Cebu Air, Inc. was founded on August 26, 1988, and received a legislative franchise to operate through Republic Act No. 7151 on August 30, 1991. Its first flight from Manila to Cebu took place on March 8, 1996, after the Philippine government deregulated the market for domestic services. The airline was purchased by JG Summit Holdings, then owned by John Gokongwei.
During its early years, Cebu Pacific operated approximately 24 domestic flights per day, connecting the metropolitan regions of Manila, Cebu, and Davao. Its initial fleet consisted of 19 McDonnell Douglas DC-9 aircraft. However, in 1998, the airline faced a tragedy when one of its DC-9 planes crashed, resulting in the unfortunate loss of all 104 passengers on board. As a result, the airline temporarily suspended its services.
Over the years, Cebu Pacific’s operations grew, expanding to 18 domestic destinations with about 80 daily flights by 2001. The airline also received rights to operate international flights to various regions, including Malaysia, Indonesia, Singapore, Thailand, South Korea, Hong Kong, and Guam. Its international flight service began on November 22, 2001, with a twice-daily flight to Hong Kong, followed by a thrice-weekly flight to Seoul on March 1, 2002. However, due to the SARS epidemic, other regional flights were later introduced and suspended, including flights to Singapore and Manila via Subic to Seoul.
The Switch to Airbus
Cebu Pacific made a deal with Airbus in 2004 to lease two Airbus A320s and buy ten A319s, which were meant to replace the airline’s current fleet of Boeing 757 and McDonnell Douglas DC-9 planes. To support its growing domestic and international operations, the airline also added seven more A320s to its order. The first A320 was delivered to Cebu Pacific in 2005.
In November 2005, Cebu Pacific launched its “Go Fares” promo, cutting airfares by 50% to increase its revenue by 20% and attract more passengers. The airline saw a significant increase in passengers after the promo. Cebu Pacific President Lance Gokongwei stated that the low fares aimed to encourage more people to travel by air.
On August 31, 2006, Cebu Pacific resumed its flights from Manila to Singapore and launched its first direct flight from Cebu to Singapore on October 23, 2006, pioneering the low-cost airline market in the Cebu-Singapore-Cebu sector. In addition, the airline started operating direct flights from Cebu to Hong Kong on October 2, 2006, making it the sole Philippine carrier to provide service for the Cebu-Hong Kong-Cebu route following the termination of the service by PAL.
Initially, Cebu Pacific’s plan to begin international flights from Clark in 2007 was rejected. However, an agreement was later reached to allow the airline to operate charter flights from Clark to the respective destination airports. At first, only Singapore agreed to permit Cebu Pacific to operate scheduled flights from Clark to Singapore, but the airline expanded its routes to include Cebu, Davao, Hong Kong, Macau, and Tokyo.
Cebu Pacific expanded its operations in 2007 by opening a hub at Francisco Bangoy International Airport in Davao City, its fourth hub after Manila, Cebu, and Clark. The airline introduced direct flights from Davao to Singapore, Hong Kong, and Iloilo in May 2008.
Airbus A330-300
In 2007, Cebu Pacific placed an order for six A330-300s, signaling its intention to expand its operations further. These aircraft were set to service various destinations in the Middle East, East Asia, and Southeast Asia, including popular cities like Dubai, Beijing, Hong Kong, Seoul, Shanghai, Taipei, Tokyo, Bangkok, Hanoi, Ho Chi Minh City, Jakarta, Kuala Lumpur, and Singapore. The airline also planned to utilize these aircraft for domestic flights to Cebu, Davao, and General Santos.
Cebu Pacific achieved a remarkable feat in May 2008, securing the title of the world’s fastest-growing airline by transporting almost 5.5 million passengers in 2007, a remarkable 57.4% increase from the previous year. The airline ranked fifth in Asia for Budget Airline passengers transported and 23rd in the world.
In August 2009, Cebu Pacific created a fan page on Facebook and Twitter, becoming the first airline in the Philippines to use social media. And in October 2010, the carrier completed its initial public offering, raising ₱23.3 billion, which marked the largest IPO ever made by a low-cost carrier.
Modernizing the Fleet Further
Cebu Pacific entered into a contract with Airbus in 2011 to purchase 30 A321neos, nine of which were slated for leasing to support the airline’s growth and development. However, issues with Pratt & Whitney engines caused delivery delays, prompting the airline to lease seven A321ceos in June of the same year to expand its domestic and regional markets. Despite initial delivery schedules for 2017, the agreement was ultimately delayed.
In 2012, Cebu Pacific expanded its operations by opening its fifth hub at Iloilo International Airport, offering direct flights from Iloilo to Hong Kong, General Santos, Singapore, and Puerto Princesa. The airline also opened a hub in Kalibo and launched direct flights from Kalibo to Davao and Puerto Princesa.
In 2013, Cebu Pacific reached an important milestone when it received its first A330-300, marking significant growth for the airline. In 2016, the carrier acquired two additional A330s to reinforce its long-haul routes, specifically to Sydney and Melbourne.
Rebranding
The airline flew its 100 millionth passenger in January 2015 and revealed its new logo in June of the same year. The new logo symbolizes the colors of the Philippines and an evolution of a low-cost pioneer. Cebu Pacific opened its seventh hub at Cagayan de Oro’s Laguindingan Airport in October 2017, launched direct flights to Dumaguete and Caticlan from Cagayan de Oro, and flew its 150 millionth passenger. In 2018, Cebu Pacific expanded further by launching flights to Melbourne, Australia.
After much anticipation, the airline finally received its first 230-seater A321ceo on March 22, 2018. Subsequently, on January 20, 2019, Cebu Pacific took delivery of its first 236-seater A321neo, which was registered as RP-C4118 and equipped with Pratt & Whitney engines. Both the A320 and A321 are currently used for flights to destinations in the domestic and international markets.
More Airplane Orders
Cebu Pacific made headlines in June 2019 when it placed an order for 31 Airbus aircraft. The order included 16 Airbus A330neos, which were set to replace the airline’s older A330ceos, as well as 10 A321XLRs and 5 A320neos. The deal was finalized later that year, and Cebu Pacific has been eagerly awaiting the arrival of their new planes.
Finally, on November 28, 2021, Cebu Pacific received its first A330-900, which has a whopping 459 seats in a single-class configuration. The new A330neo is a major upgrade from the older A330ceos, offering improved fuel efficiency and greater passenger comfort. The airline plans to use the new aircraft to expand its long-haul network and to service highly congested airports.
Covid-19 Pandemic and Recovery
The global COVID-19 pandemic had a significant impact on the operations of the Cebu Pacific airline and its regional subsidiary. In 2020, all operations were suspended during the enhanced community quarantine in Luzon due to low passenger demand. As a result, the airline laid off 1,300 employees and sent many aircraft to indefinite storage. However, in 2021, the airline was able to raise a total of ₱40.5 billion (US$822 million) to help recover from the pandemic.
As travel demand gradually recovers, the airline started rehiring retrenched employees in November 2021 and aims to restore its full workforce by 2023. In March 2022, Cebu Pacific flew its 200 millionth passenger and by July 2022, the airline operated at 88% of pre-pandemic levels, with domestic operations being restored to 100% of pre-pandemic levels.
With the post-pandemic recovery underway, Cebu Pacific fully restored its pre-pandemic capacity and most of its international destinations at the start of 2023. The airline carried 14.8 million passengers in 2022, a huge increase from 2021. As China lifted its travel restrictions, Cebu Pacific increased the frequency of its Manila-Hong Kong flights and resumed some flights to the mainland.
In line with the resumption of flights, Cebu Pacific also resumed some flights from its hubs at Clark International Airport and Mactan-Cebu International Airport. The airline’s recovery efforts have been steady, and its commitment to restoring its full workforce is a positive step towards its growth in the aviation industry.
Future Plans
Cebu Pacific is dedicated to innovation and sustainable operations. The airline has set an ambitious goal of having an all-Airbus NEO fleet consisting of A330neo, A321neo, and A320neo by 2028. Additionally, they aim to use Sustainable Aviation Fuel (SAF) across all their operations by 2030, demonstrating their commitment to reducing their environmental impact.
With a 57% market share of the domestic travel market in the Philippines, Cebu Pacific continues to dominate domestic travel as they expand their operations across the country. The airline recently opened 13 flights from Clark, providing more travel options for passengers. Cebu Pacific continues to operate as a low-cost airline with multiple hubs around the country.
Cebu Pacific’s success is attributed to their proper long-term planning, aggressive marketing, and use of efficient and brand new aircraft. They are constantly adapting to the ever-changing aviation industry to provide affordable fares and excellent customer service. As the airline industry continues to evolve, Cebu Pacific is poised to remain at the forefront of innovation and sustainability.
Cebu Pacific, the oldest low-cost airline in Asia, has now grown to become the largest domestic airline in the Philippines. The company remains committed to its mission of providing affordable air travel options to all Filipinos, ensuring that every Juan can fly with the lowest possible fares.
First love never dies. I fell in love with airplanes and aviation when I was a kid. My dream was to become a pilot, but destiny led me to another path: to be an aviation digital media content creator and a small business owner. My passion for aviation inspires me to bring you quality content through my website and social accounts. Aviation is indeed in my blood and blog!
