Philippine Air nears deal to acquire Airbus A350s

MANILA/SINGAPORE: Philippine Airlines Inc (PAL) is close to announcing a deal to secureabouthalfadozenwidebody Airbus jets to serve US and Europe long-haul flights, several people familiar with the matter said.

The deal for Airbus A350900 jets, likely to be announced at this week’s Singapore Airshow, would be valued around US$1.8 billion at list prices based on an outright purchase, though other deal structures may be considered, said the people who were not authorised to speak to the media.

One source said this could involve PAL leasing the planes.

PAL and Europe’s Airbus declined to comment.

“We do not comment on discussions we may or may not be having with our customers,” an Airbus spokesman said.

“PAL will announce in due time its fleet orders which will add to its existing roster of aircraft,” the airline said in an emailedstatementresponding to a query from Reuters.

“These will be utilised for international routes. It is a choice between an A350 and (Boeing) 787, as stated by PAL President Jaime Bautista last year.”

PAL’s order comes at a time when rival Cebu Pacific is also expanding its local routes.

PAL, the country’s No.2 airline, is taking in more aircraftasitgrowsitslucrative international network to cater to increased demand from millions of Filipinos working overseas.

PAL’s expected fleet acquisition underscores the buoyant outlook for Southeast Asia’s fifth-largest economy as it bucks a global slowdown.

It is forecast to expand by six per cent this year – one of the fastest growth rates in Asia.

However,thereareconcerns among manufacturers gathering in Singapore that overall demand for new jetliners is slowing after a record wave of orders.

The Philippines’ fourth richest man, Lucio Tan, began a review of PAL’s operations after taking over the airline’s management in 2014.

PAL and its budget unit operate about 60 Airbus jets, sixBoeingaircraftandaround nine Bombardier airplanes. — Reuters