Cebu Pacific to Purchase 152 Airbus Aircraft for Historic P1.4 Trillion Deal

Cebu Pacific, the budget airline led by the Gokongwei family, has announced a landmark order of over 150 Airbus aircraft valued at $24 billion (P1.4 trillion), marking the largest aircraft purchase in Philippine aviation history.

Record-Breaking Order

In a regulatory filing, Cebu Pacific’s operator, Cebu Air Inc., disclosed a memorandum of understanding (MOU) with Airbus, which includes firm orders for up to 102 A321neo and 50 A320neo Family aircraft, all equipped with Pratt & Whitney GTF engines. This agreement allows Cebu Pacific flexibility to switch between A321neo and A320neo models based on market conditions.

“This order is designed to provide Cebu Pacific with maximum flexibility to adapt fleet growth to market conditions,” said Michael Szucs, Cebu Pacific’s CEO. “When finalized, the deal will be a significant milestone for the local airline industry and a testament to CEB’s unwavering commitment to support the Philippine growth story.”

The transaction is expected to be finalized in the third quarter of 2024.

Government Endorsement

President Ferdinand Marcos Jr. expressed strong support for Cebu Pacific’s acquisition plan during a courtesy call with airline representatives, including Lance Gokongwei, President and CEO of JG Summit Holdings, Inc. Marcos highlighted the positive economic implications of the deal, stating, “It gives us a great deal of encouragement that if we get it right, we can actually get something done and make a transformation in our economy.”

Expansion and Economic Impact

Earlier this year, Cebu Pacific announced it aims to close 2024 with 95 aircraft, boosting its seat capacity by 12% to 15% compared to 2023. The fleet will comprise 16 ATRs, 51 Airbus NEOs, and 28 Airbus CEOs.

In the first quarter of 2024, the airline reported a net earning of P2.24 billion, doubling the P1.08 billion from the same period last year, with total revenues rising by 21% to P25.3 billion.

Future Prospects

Cebu Pacific’s historic purchase signifies not only its growth but also the potential upliftment of the Philippine aviation sector, enhancing competitiveness and expanding the nation’s economic footprint in the global market.