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MANILA, Philippines – It’s official: Cebu Pacific has chosen Airbus to supply up to 152 aircraft in what will become the largest aircraft order in Philippine history.
The low cost carrier signed a binding memorandum of understanding (MOU) with the European aerospace giant for the purchase of up to 152 A321neo aircraft for $24 billion, or P1.4 trillion based on list prices.
Cebu Pacific has some wiggle room to tweak its final purchase order based on market demand, given that the MOU covers firm orders for up to 102 A321neo planes, along with purchase rights for 50 A320neo Family aircraft.
“The order is designed to provide Cebu Pacific with maximum flexibility to adapt fleet growth to market conditions, with the ability to switch between the A321neo and A320neo,” Cebu Pacific chief executive officer Michael Szucs said in a Philippine Stock Exchange disclosure on Tuesday, July 2.
The new planes will also be powered with Pratt and Whitney GTF engines. Cebu Pacific has long used engines from the the American manufacturer, although in 2023, supply chain problems involving Pratt and Whitney forced Cebu Pacific and other airlines to ground their planes due to “faulty” engines. (READ: What’s causing the rise in flight cancellations and delays?)
The purchase agreement is expected to be finalized by the third quarter of 2024. Although it could take years for the planes to be fully delivered, by 2035, the Gokongwei-owned airline could quadruple the aircraft deployed in its regional hubs across the Philippines. In the first quarter of 2024, Cebu Pacific successfully rode the surge in holiday and international travel to more than double its net income compared to Q1 2023.
Cebu Air, the parent company of Cebu Pacific, had a total of 87 aircraft in its operating fleet as of March 31, 2024. It leases 20 Airbus CEO planes, 30 Airbus NEO planes, and 2 ATR 72-600 planes, while it owns 11 Airbus CEO planes, 10 Airbus NEO planes, 12 ATR 72-600 planes, and 2 ATR 72-500 planes.
Cebu Pacific’s decision to go with Airbus for its massive aircraft order comes just as Airbus’ rival Boeing struggles with declining plane deliveries and concerns surrounding safety standards, especially after a mid-air panel blowout during an Alaska Airlines flight. In late May, Saudia also picked Airbus for Saudi Arabia’s largest-ever plane order, according to a CNN report. – Rappler.com
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