Philippine Airlines Signs $7B with Airbus for 54 New Aircraft

Image taken from PAL'S Facebook page

Flag carrier Philippine Airlines (PAL) has signed a $7 billion deal with Europe-based aircraft manufacturer Airbus for the purchase of up to 54 new planes, mainly narrowbody jets to be used on domestic and regional flights.

The deal includes 10 widebody Airbus A330-300s, an addition to the 8 that the airline already has in their fleet. The newer planes, though, will be more cost-efficient and would help the airline is saving millions of dollars a year. The other planes in the deal include 34 A321-200, a larger variant of the Airbus A320-200 which PAL already has in their fleet. Another 10 orders would come in the form of A321-200neo (new engine option) planes. The first of these new planes would be ready for delivery by January 2013. 

This massive order is the largest any Philippine-based airline has ever made, and is part of Philippine Airlines' massive refleeting program following the acquisition of the airline by San Miguel Corporation. Under this refleeting program, the airline would order up to 100 new planes.

"Our intention is to buy up to 100 aircraft, 26 of that will be long-range, wide body," PAL president Ramon Ang told members of the press.

The remaining planes still to be ordered will reportedly come from Boeing, the US-based aircraft manufacturer. 

The purchase of new planes would allow the airline to add more flights to existing destinations, as well as introduce flights to new destinations in the Middle East, Europe, and North America. However, due to restrictions, the airline cannot add new flights to the United States, and start new flights to Europe. The airline hopes that these restrictions would be lifted soon.

PAL, which started flights in 1941, currently has 39 aircraft in its fleet. PAL, however, has lately been suffering from financial losses due to rising fuel costs and stiff competition from other carriers.