Cebu Pacific Issues Apology, Plans to Pay Fine

"I'm profoundly sorry" were the words of Cebu Pacific President Lance Gokongwei as he spoke before the House of Representative's Transportation Committee to address the service breakdown that stranded thousands of passengers over the holiday season.

Image Source: Flight Global

At a meeting held on January 21 to discuss the holiday blunder, Gokongwei expressed deep regret over the inconvenience that was caused to countless Cebu Pacific passengers. In a prepared statement, the CEO blamed absenteeism as the root cause of delays and cancellations.

"We simply had too few agents to handle the many passengers waiting to check in," said Gokongwei. "We were faced with unprecedented absenteeism which created a chaotic situaiton at our check-in counters."

All of Cebu Pacific's ground handling operations are currently outsourced to two separate companies. Topserve Manpower Solutions handles domestic flights, while MacroAsia handles international flights. Gokongwei stated that the company faced a shortfall of promised domestic agents on December 25 and 26. 

But lawmakers are not convinced, suggesting that cancellations have been plaguing passengers for a long time. According to Representative Neri Colmenares, Cebu Pacific's statement just doesn't jive. "Before, there were allegations that NAIA is not giving you enough counters," said Colmenares. "You've had so many answers before. But in your speech now, there is none of that."

In addition, law makers are suggesting that the chaos was caused by the practice of overbooking. But Gokongwei denied the allegations, insisting that the staff absenteeism, understaffed operations, and the inability to anticipate the demands of the holiday season are what led to the fiasco.

"We admit that we are responsible for shortcomings," said Gokongwei. "We agree that we have to pay the penalty. But our legal team is reviewing the basis and amount because of possible precedents." Cebu Pacific is currently faced by a P52.11 million fine that is being imposed by the Civil Aeronautics Board for the airline's flight delays and cancellations over the holiday season.

Gokongwei added that the airline has learned its lesson and has implemented several measures including having a second set of ground handlers on stand-by to serve as an alternative buffer. Cebu Pacific has been scarred by a number of customer service controversies over the last two years including the mishandling of a flight that overshot a Davao runway in June 2013 and the denied boarding of a sick boy in March 2014.

The House Committee on Transportation is taking steps to ensure that passengers are better protected in the future. A resolution was crafted on Wednesday to force airlines to compensate passengers affected by the holiday mishap in addition to the fines and refunds that they must already pay. 

According to Representative Cesar Sarmiento, the committee is seeking a way to require airlines to compensate passengers that are displaced due to a high number of cancelled or delayed flights. "The resolution is expressing the committee's sentiment to direct airlines to address the grievances, including compensation that will go to the affected passengers," said Sarmiento.

Cebu Pacific has indicated its concern of the precedent that may be set in the industry by such a fine. But Civil Aeronautics Board Executive Director Carmelo Arcilla doesn't believe there would be any negative precedent at all. According to Arcilla, the fine being imposed is already quite low compared to fines imposed by other countries.

"I don't think it might set a precedent," said Arcilla. "For me, public interest is paramount. We have to use the coercive power of the law in order to make the airlines comply with their obligations." He added that the P52 million fine could be the highest ever imposed on an airline in the Philippines.

In spite of the dispute over the amount of the fine imposed, Gokongwei acknowledged that the airline had failed its passengers. "I am humbled by the trust that so many Filipinos and foreign tourists place in Cebu Pacific to take them safely to their destinations in a timely manner," said Gokongwei. 

Gokongwei noted that six out of ten Filipinos choose to fly with Cebu Pacific for domestic travel. "We also identified that the performance of our ground handling agent for domestic operations was inadequate," added Gokongwei. "Our ground handling agent failed to meet manning and service level commitments."

In spite of the apology, Representatives such as Rodolfo Albano are demanding more. "The Cebu Pacific management should compensate for the lost time and opportunities of the passengers," said Albano. "They have to pledge that they should fix their services and see to it that the rights of the passengers be respected."

Gokongwei promised that Cebu Pacific would be more aggressive in remedial measures and that they would engage the services of a second ground handler for check-in counters and have an aircraft on stand-by in the event of any mechanical breakdowns to avoid flight cancellations in the future. 

He reassured the public that the management of Cebu Pacific was aware of the lapses that it had committed and that corrective measures would be implemented to prevent future recurrences. "Last Christmas, we let them down," said Gokongwei. "We are profoundly sorry that we have failed them."