Econ - Article1.docx

Acojon, Nicah P. BSA 1-2 Managerial Economics January 14, 2019

Seat sale: Cebu Pacific, AirAsia announce '12-12' promos ABS-CBN News Posted at Dec 12 2018 09:09 AM MANILA ‒ Cebu Pacific and AirAsia on Wednesday announced separate "12-12" seat sale events for travel from January next year. Cebu Pacific's 1 day only sale offers discounted fares from Manila to 12 destinations. AirAsia said it was offering 12 percent off on "all seats, all flights" for 48 hours for bookings made through its app. The Cebu Pacific seat sale is for travel from Jan. 20 to April 30, 2019, while AirAsia's is from Jan. 7 to May 31, 2019. Cebu Pacific is offering P299 base fare from Manila to Bacolod, Cagayan de Oro, Cebu, Dumaguete, General Santos, Iloilo, Pagadian, San Jose (Mindoro) and Zamboanga. For international travel, Cebu Pacific is offering P499 base fare from Manila to Bali, Brunei, Fukuoka, Hanoi, Shanghai, Siem Reap and Taipei and P549 from Manila to Singapore.

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https://news.abs-cbn.com/business/12/12/18/seat-sale-cebu-pacific-

airasia-announce-12-12-promos

The article highlighted the two different airfare promos made by two well-known airlines in our country: Cebu Pacific and AirAsia. Cebu Pacific offered discounted fares for flights booked on December 12 in specific local and international places only. AirAsia, on the other hand, took advantage of the power of digitalization and gave 12% percent discount on bookings made using their mobile application within 48 hours. Various discounts are evident in all areas of the Philippines every holiday period and the two airlines utilized the Christmas season well; knowing that workers earn their 13th month pays during this time and can easily be encourage in engaging into promos especially that the flights cater the vacation of the students in the family. For Cebu Pacific, these discounts may create a distraction with their current controversies about delayed and cancelled flights, security measures and check-in protocols. This may also signify a bountiful start for their 2019 business transactions. In addition, as the airline included flights to the beautiful provinces in the Philippines, they didn’t only partake in the economic growth of our country but also contribute to our very own tourism. For AirAsia, I would like to commend their incorporation of technology in their promotion. In this country and contemporary era where everyone uses their cellular phones every day and demand for internet connection is high, it is to one’s huge step up to make use of mobile applications. Their action was actually a great way of encouraging potential flight passengers and a means of spreading the knowledge of the existence and use of their own mobile application. With the two airlines’ actions, they will gain a greater profit. However, their actions may result to a number of passengers especially during the dry season vacation and it is a great fear that the system they’ve got isn’t capable enough to accommodate all these people. Given the present issues of Cebu Pacific, the current structure of Ninoy Aquino International Airport (NAIA) and the waves of foreign tourists traveling to explore the magnificence of the Philippines, local flights may be in haywire and the already ruined image of our airline services will end up devastated.

For this article, the application of managerial economics was the way the two airlines took advantage of the current season and decided to release promos for wiser marketing plan and better strategy among their competitors. The discounts they have given can entice the people to book a flight. In addition, the mass will be more knowledgeable with the existence of AirAsia’s mobile application, which is another marketing move. In their case of [monopolistic] competition, one airline’s release of promos may trigger the other to the same or at least equate its offer. With this, I’ve come to realize that managerial economics is, indeed, a very essential matter to sustain a firm’s life.