PAL signs $1.85-B deal for 6 Airbuses

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PAL

This photo taken on September 9, 2014 shows a Philippine Airlines airplane taking off from Manila’s international airport. European plane-maker Airbus said on Wednesday it had won a $1.85-billion deal for the purchase of six A350-900s by Philippine Airlines. AFP PHOTO

SINGAPORE: European plane-maker Airbus said Wednesday it had won a $1.85 billion deal for the purchase of six A350-900s by Philippine Airlines (PAL), flag-carrier of one of Asia’s fastest growing economies.

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PAL also has the option to purchase an additional six of the aircraft, the two companies announced at the Singapore Airshow.

Separately, PAL also signed a $600-million order with Rolls-Royce for Trent XWB engines to power the six A350s, the airline said in another statement.

PAL President Jaime Bautista said the planes will be used for PAL’s non-stop, long-haul flights from the Philippines to the United States, Canada and Europe.

The Philippines’ economic growth in the past six years under President Benigno Aquino 3rd, who steps down in June, averaged 6.2 percent, one of the strongest performances in Asia, boosting travel demand.

The Philippines also relies on a diaspora of around 10 million Filipinos, or 10 percent of the population, many of them residing in the cities targeted by PAL.

The airline plays a key transportation link for millions of Filipinos who work abroad, with a route network tracing the key destinations of the labor diaspora.

“We are happy to announce that today we will commit to acquire six A350-900 series which will allow us . . . to fly non-stop from Manila to New York, allow us to increase our presence in the US, in San Francisco and Los Angeles, and also to Vancouver and Toronto,” Bautista told a news conference.

“This aircraft will allow us to improve our operations to Europe, [it]will be used to fly from Manila to London.”

He added that the aircraft “will really support our mission of becoming a full service
five-star airline in five years.”

Delivery of the aircraft will start in 2018.

“The A350s range capability has been an important factor in our decision, enabling us to offer non-stop service on all our premium long-haul routes,” Bautista said.

The order is worth $1.85 billion at list prices, although airlines usually get discounts on their purchases.

AFP

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3 Comments

  1. I think PAL should buy more plane and expand aggressively to position itself more strategically in the near future.Look at the trajectory of growth of Emirates and Gulf Air and PAL should try to emulate them.The price of oil is expected to stay low for a long time and this bode well for the airline industry.

  2. Disappointing selection by PAL. Simply put, a second rate airline picks a second rate aircraft for its long-haul routes. PAL shoots itself in the foot – again. With this ownership group, PAL will always be a joke. Filipinos deserve a real airline.

    • Airbus A350 is a second-rate aircraft? Wondering where your comment is coming from, considering that other first-rate airlines (i.e. Singapore, Cathay Pacific, Qatar, Delta, etc.) have ordered and are already operating the A350 on most of their premium – and lucrative – routes. I think it’s a good decision by PAL and bodes well with their business plans (i.e. offer nonstop service MNL-JFK, something a comparable B777-300ER cannot accomplish now, and to wait for 77X until after 2020 is not going in the right direction for them).