Cebu Pacific seals 'largest deal' in PH aviation, to buy 152 Airbus planes at P1.4 trillion
Arthur Fuentes, ABS-CBN NewsPublished Jul 02, 2024 04:42 PM PHT | Updated Jul 02, 2024 05:20 PM PHT
(UPDATE) - Cebu Pacific is buying over a hundred new planes as it further ramps up operations, the Philippines’ largest airline said on Tuesday.
The Gokongwei-led carrier said it signed a binding Memorandum of Understanding (MOU) with Airbus to buy up to 152 A321neo aircraft for $24 billion, or around P1.4 trillion.
The company said this was the largest aircraft order in Philippine aviation history.
The deal covers firm orders for up to 102 A321neo planes, plus 50 A320neo units.
“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,” said Cebu Pacific CEO Michael Szucs.
“When finalized, the deal will be a significant milestone for the local airline industry and a testament to CEB’s unwavering commitment to support the Philippine growth story.”
The purchase agreement to finalize this transaction is expected to be completed in the third quarter of the year, the company added.
Cebu Pacific reversed a P14 billion loss in 2022 to make P7.9 billion in net income in 2023 on the back of stronger demand for air travel.
The airline said it flew over 20 million passengers on more than 140,000 flights in 2023, up 41 percent and 31 percent, respectively, from 2022 figures.
The company also earlier said its net income doubled in the first quarter of the year as travel demand remained strong.
Net income grew to over P2.2 billion in the first three months of 2024, higher by 108 percent over the same period last year.
In June, the airline announced a program to train more cadet pilots as it expands its fleet.
Airlines have roared back after the Covid-19 pandemic, with passenger numbers and revenues expected to hit record highs this year, trade body IATA said in June.
The International Air Transport Association said nearly five billion passengers were expected to fly in 2024 and revenues would near $1 trillion.
But airlines are also facing a sharp rise in costs caused by shortages of parts and labour, and challenges related to climate change.
Their total expenses are also expected to hit a record high this year, climbing 9.4 percent to $936 billion, IATA said.
At a Singapore airshow in February, Szucs told AFP that Cebu Pacific had a "shortfall in capacity" owing to aircraft grounded or delays in deliveries.
"It's just never been more difficult to keep the fleet flying," he said.
- With a report from Agence France-Presse
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