Cebu Pacific orders 31 Airbus jets worth $6 billion

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AN AIRBUS A330neo aircraft performs during the inauguration of the 53rd International Paris Air Show at Le Bourget Airport near Paris, France, June 17. — REUTERS

LE BOURGET — Airbus struck a $6-billion plane deal with Philippines budget airline operator Cebu Air on Tuesday, extending its lead on orders at a subdued Paris Air Show as rival Boeing struggles following the grounding of its top-selling jet.

Cebu’s order included 10 of Airbus’s new long-range A321XLR passenger aircraft, which was launched at the show on Monday, as well as 16 wide-body A330neos and five single-aisle A320neos.

Reuters reported on Monday that Cebu Air, which operates Cebu Pacific, was poised to buy more than two dozen Airbus planes.

Sources familiar with the matter say American Airlines and leasing giant GECAS are also in talks to buy the A321XLR, which aims to carve out new routes for airlines with smaller planes and steal a march on Boeing’s plans for a potential all-new mid-market jet, the NMA.

Airbus shares were up 1.2% at 0800 GMT, at a record high of 126.48 euros.

Despite the flurry of activity around the A321XLR, however, dealmaking at the aerospace industry’s biggest annual event has been quieter than normal, fueling speculation that a decade-long boom in orders might be coming to an end.

With airlines struggling with over-capacity, slowing economies and geopolitical tensions, some analysts warn Airbus and Boeing could face a growing number of cancellations from their bulging order books.

Boeing in particular is suffering after the grounding of its MAX 737 aircraft in March following two deadly crashes.

However, the planemakers are confident of continued strong demand for more fuel-efficient planes as emissions regulations tighten and as air travel continues to rise, driven by Asia’s growing middle classes. Boeing on Monday increased its 20-year industry demand forecast.

“Although investors have started to ask questions about the state of the upcycle, the aerospace industry remains very confident in the current state of the market,” analysts at Vertical Research Partners said in a note.

Cebu Air Chief Financial Officer Andrew Huang told a news conference the 16 A330neo jets it was buying would have up to 460 seats, allowing the airline to add new international routes.

Cebu Air, which operates the Cebu Pacific brand, had a 51% share of the Philippine domestic market in 2018, according to company data. In the international market, its 19% share was second only to full-service rival Philippine Airlines with 28%.

After announcing no major aircraft orders on Monday, Boeing could unveil some on Tuesday, including a potential deal with Air Lease Corp. whose founder Steven Udvar-Hazy told reporters on Monday he would be “at Boeing tomorrow.” — Reuters