Airbus wins US$24 billion deal from Cebu Air for over 150 jets
The budget carrier expects to finalise the transaction with the European manufacturer in the third quarter of this year
CEBU Pacific Air reached a preliminary agreement to buy 152 single-aisle jets from Airbus in a deal worth US$24 billion at list price, the company announced on Tuesday (Jul 2).
The order by the Philippine low-cost carrier will be the biggest jet purchase in the country’s history, the airline said in a stock exchange filing. As part of the agreement, Cebu Pacific will buy 102 A321neo jets, with options for another 50 planes.
“When finalised, the deal will be a significant milestone for the local airline industry,” the airline’s chief executive officer Mike Szucs said.
The order confirms an earlier Bloomberg News report on the purchase plans of the carrier. The final price that Cebu Pacific will pay will be lower as airlines often win large discounts on aircraft orders.
The A321neo is Airbus’ best-selling plane and the planemaker has a backlog that runs well into the next decade for the jetliner.
Cebu Pacific had previously said it was looking at both Airbus as well as Boeing planes for its next major order. However, US planemaker Boeing failed to win over the largest airline in the Philippines.
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Cebu Pacific expects to finalise the transaction with Airbus in the third quarter of this year.
The carrier also picked RTX’s Pratt & Whitney geared turbofan (GTF) engines to power the future fleet.
About hundreds of GTF-powered jetliners, including almost two dozen at Cebu Pacific, have been idled as the turbines must be removed and brought in to repair shops over the next three years to check for potentially flawed components made from contaminated metal powder.
The low-cost airline – controlled by tycoon Lance Gokongwei and his family’s conglomerate JG Summit Holdings – plans to expand from a new airport being built in the country’s capital Manila, while consolidating its dominant domestic aviation market share position against a resurgent Philippine Airlines.
Cebu Pacific has a fleet of about 85 Airbus and some smaller ATR turboprop aircraft, and an existing order book of more than 30 planes from the European manufacturer.
“We thank Cebu Pacific for its ongoing confidence in Airbus and its products, and we look forward to finalising the contract,” Airbus said in a statement. BLOOMBERG
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