Key Points:

  • Cebu Pacific is discussing a significant order of 100 to 150 narrowbody aircraft with Airbus and Boeing, potentially marking the Philippines' largest aircraft commitment.

  • The airline has issued a request for proposals (RFP) to both manufacturers and will evaluate their narrowbody aircraft offerings through a meticulous process.

  • Cebu Pacific is eyeing ambitious growth, aiming to double its fleet by 2035 to capitalize on robust travel demand following the pandemic. The airline posted operating profits in consecutive quarters.

MANILA — Cebu Pacific, the Philippines' largest low-cost airline, is actively engaging in discussions with Airbus and Boeing regarding a substantial order for narrowbody aircraft. This prospective commitment could be one of the most significant in the country's aviation history.

Seeking Up to 150 New Aircraft

The carrier, in an official stock exchange filing on October 20, has indeed acknowledged the ongoing discussions with the two major aircraft manufacturers. However, it underscores that a definitive commitment to procure these aircraft will only occur upon the successful conclusion of this process. In alignment with this, Cebu Pacific has taken the initial step by issuing a request for proposals (RFP) to Airbus and Boeing. The RFP covers the potential acquisition of between 100 and 150 new narrowbody aircraft. Airbus and Boeing have been granted time until the year-end to provide their responses to this RFP.

Significant Economic Implication

Media reports, drawing insights from airline executives, estimate the value of this potential deal to be at least $12 billion, based on list prices. This figure underscores the magnitude of the proposed commitment and the financial significance it carries.

Ambitious Growth Plans and Strong Financial Performance

Cebu Pacific's aspirations extend beyond this potential aircraft order. The airline aims to double its fleet by the year 2035, driven by the sustained demand for air travel following the challenges posed by the Covid-19 pandemic. Currently, Cebu Pacific operates a fleet comprising more than 70 aircraft, which includes Airbus A320-family jets, A330s, and ATR 72 turboprop aircraft. The pursuit of this growth strategy aligns with the vision of Philippine carriers, as stated by Airline Chief Mike Szucs, who anticipates a need for these carriers to quadruple in size over the next two decades. This projection reflects an eagerness to seize the growth opportunities in the Asia-Pacific region.

Sustained Financial Success

Cebu Pacific's financial performance has demonstrated resilience. In the three months ending on June 30, the airline reported an operating profit of Ps2.5 billion, equivalent to $44 million. This marks the second consecutive quarter in which the airline achieved profitability.

The ambitious aircraft order discussions with Airbus and Boeing signify the carrier's determination to not only navigate the challenges of the pandemic but also to position itself for substantial expansion and opportunities in the dynamic aviation landscape.