Cebu Pacific to purchase 16 Airbus aircraft for $4.8B

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CEBU AIR, Inc. has signed a purchase deal with Airbus SAS for 16 new aircraft.

CEBU AIR, Inc., the listed operator of the Philippines’ largest budget carrier Cebu Pacific, has signed a purchase deal with plane manufacturer Airbus SAS for 16 passenger aircraft worth a total of $4.8 billion.

In a disclosure to the stock exchange on Monday, Cebu Air said it signed a purchase agreement with Airbus SAS for the order of 16 A330-900 aircraft currently valued at $4.8 billion.

It said the aircraft have up to 460 seats in a single-class configuration.

“The order firms up the wide-body portion of a previously announced Memorandum of Understanding (MoU), which also includes commitments for ten A321XLR and five A320neo single-aisle aircraft,” it added.

Cebu Pacific said the aircraft offer a 25% reduction in fuel consumption compared with older generation competing passenger planes, and an extended range capability of up to 8,000 nautical miles or 15,000 kilometers.

“The A330neo is integral to our fleet modernization program. With this purchase, we aim to reduce our fuel emission and build a more sustainable operation. This will also give us the lowest cost per seat, at the same time enabling CEB to increase seat capacity and maximize valuable airport slots in Manila and other Asian megacities,” Cebu Pacific President and Chief Executive Officer Lance Y. Gokongwei was quoted as saying.

For his part, Airbus Chief Commercial Officer Christian Scherer said: “Cebu Pacific is a pace-setter and surely one of the most respected and well managed airlines in the low-cost sector. This new order is another important endorsement for the value-based proposition that the A330neo brings to highly competitive markets. The increased capacity version of the aircraft developed for Cebu Pacific will help achieve even greater efficiencies for high density regional and long range routes.”

Mr. Gokongwei said earlier this year that the budget carrier would be investing heavily on the acquisition of new planes as it looks to recover “lost market share” over the past two years.

Based on data from the Civil Aeronautics Board, Cebu Pacific and Cebgo had a combined passenger traffic of 13.95 million in 2018, or 51% of the total 27.28 million of all local carriers.

In 2017, the two Gokongwei-led carriers had a combined traffic of 13.72 million domestic passengers, or 55% of the market total. In 2016, Cebu Pacific and Cebgo held 57% of the domestic passenger market at 13.46 million. — Arjay L. Balinbin