Summary
- Cebu Pacific Air has signed a binding agreement with Airbus for the purchase of up to 152 Airbus A320neo family aircraft, including the A320neo and A321neo.
- The deal could be finalized as soon as the end of Q3, which would fall in line with the dates of the upcoming Farnborough International Airshow.
- On multiple ocassions, Cebu Pacific has disclosed that it aims to transition to an all-Airbus neo fleet by 2028, which includes the A320neo and A330neo families.
Cebu Pacific Air, the Philippines-based low-cost carrier, 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.
Firm orders and options for the A320neo and A321neo
According to the airline’s filing, it has signed a binding Memorandum of Understanding (MoU) with Airbus to buy up to 152 Airbus A320neo and A321neo aircraft. The deal was valued at $24 billion (PHP1.4 trillion) at list prices, which are indicative and do not represent the real prices that airlines pay for aircraft.
Nevertheless, Cebu Pacific Air’s order includes 102 firm orders for the A321neo and 50 options for the A320neo. The aircraft will be powered by the Pratt & Whitney PW1100G engine, also known as the Geared Turbofan (GTF). The low-cost carrier chose the GTF despite its current issues with the engine as a manufacturing problem, which caused a rare condition in powder metal that was used to build certain engine parts, forcing operators to accelerate the removals and subsequent inspections of their PW1100G engines.
Photo: Cebu Pacific
Affecting the majority of Airbus A320neo family aircraft operators that have chosen the PW1100G, Cebu Pacific Air was no exception. According to data from the aviation analytics company Cirium, the Philippine carrier’s weekly departures with the A320neo and A321neo could grow by 14.7% year-on-year (YoY) in July, its weekly departures during the month, excluding the two aircraft types, are scheduled to increase by 3.6%.
However, its weekly capacity, measured in available seat kilometers (ASK), is scheduled to decrease by 4.1% when looking at flights only operated by the A320neo and A321neo in July. Meanwhile, its ex-A320neo/A321neo weekly ASKs are scheduled to grow by 5.6% during the same month.
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Potential Farnborough International Airshow announcement
While the airline has signed the binding MoU, Cebu Pacific said that it expected to finalize the agreement in Q3, which would align with the dates of the upcoming Farnborough International Airshow. Previous reports have indicated that the order could be announced at the industry event, which happens between July 22 and July 26 this year.
Photo: Cebu Pacific
Nevertheless, Michael Szucs, the chief executive officer (CEO) of Cebu Pacific, said that the potential order was designed to provide Cebu Pacific with the maximum flexibility to adapt its fleet growth to market conditions, with the ability to switch between the A321neo and A320neo aircraft.
“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.”
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Transitioning to an all-neo fleet
Throughout multiple announcements in 2024, Cebu Pacific has reiterated 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.
“Airbus NEOs are the latest-generation aircraft that burn 15 percent less fuel per flight compared to the previous generation. The reduction in fuel consumption leads to a corresponding reduction in aircraft carbon emissions.”
Photo: Johann Kirby Datoy | Shutterstock
In addition to the 26 A320ceo family aircraft and two A330ceos, the Philippine carrier has 18 A320neo(seven inactive), 14 A321neo (three inactive), and eight A330-900 aircraft in its fleet, totaling 68 aircraft. Meanwhile, its regional subsidiary, Cebgo, operates an all-ATR turboprop fleet, including the ATR 72-500 and ATR 72-600.
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Cebu Pacific Negotiating Order For 150 Airbus A320neo To Be Announced At Farnborough Airshow
Despite struggling with grounded Airbus A320neo family aircraft, Cebu Pacific Air is set to stick with the manufacturer and order more aircraft.