The signed binding agreement with the European multinational aerospace company involves purchase orders for up to 152 aircraft.
Philippine-based low-cost carrier Cebu Pacific has signed a preliminary and binding agreement to order up to 152 Airbus A320neo family aircraft, including the A320neo and A321neo. The airline disclosed the news in a Philippine Stock Exchange (PSE) filing on July 2, 2024.
The purchase is set to become the largest aircraft order in Philippine history.
The Gokongwei-owned airline signed a binding memorandum of understanding (MOU) with the European aerospace giant for a purchase totaling $24 billion or P1.4 trillion based on list prices, which are indicative and do not represent the real prices that airlines pay for aircraft.
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, Rappler reports.
“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 PSE disclosure on Tuesday, July 2.
Throughout multiple announcements in 2024, Cebu Pacific has emphasized its goal to transition to an all-Airbus neo fleet by 2028. This includes the replacement of its 19 A320ceo and seven A321ceo aircraft, as well as two A330-300s that are inactive, per ch-aviation data.
The new planes will still be powered by Pratt and Whitney GTF engines, the only geared propulsion system delivering industry-leading fuel efficiency and sustainability benefits. Specifically, the aircraft will draw its power from the PW1100G engine, also known as the Geared Turbofan (GTF).
The deal could be finalized as soon as the end of Q3, just in time with the dates of the upcoming Farnborough International Airshow. Although it could take years for the planes to be fully delivered, by 2035, the airline could quadruple the aircraft deployed in its regional hubs across the country.
In the first quarter of 2024, Cebu Pacific successfully took advantage of 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, as per a report on the website Simple Flying.
Cebu Pacific’s decision to go with Airbus for its history-making aircraft order comes just as rival Boeing is faced 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.
Szucs says: “When finalized, the deal will be a significant milestone for the local airline industry and a testament to [Cebu Pacific Air’s] unwavering commitment to support the Philippine growth story.”
