PAL’s 2016 refleeting to cost $500 million

The refleeting program of Philippine Airlines (PAL) in 2016 is seen to rise to $500 million as the country’s flag carrier plans to acquire seven new aircrafts next year.

PAL President Jaime Bautista said the company will be allotting $500 million to acquire seven fleets, five of which are Airbus A321 aircraft, two are Boeing Triple 7 for long-haul flights.

“The value of the re-fleeting program, maybe, just an estimate, is more than half a million US dollars. That’s the fleet value that we will take and that’s for next year only. Whether we lease it or not, that’s the value of asset that we will acquire,” Bautista said in an interview with reporters.

All in all, including the budget for spare parts, Bautista said the company may be spending up to $700 million next year.

Asked if the company will raise funds for next year, Bautista only said “the financing of the airplanes will not be a problem.”

“There are many companies who will be willing to finance us,” said Bautista as he stressed that financing comes easy for profitable airlines.

Although Bautista declined to specify the company’s total capital expenditure for next year, which includes general working capital, he said it should “definitely” be higher than the company’s allotment this year.

“[It will be higher] because this year, we only took delivery of five airplanes; then next year, it will be seven,” he further said.

For 2015, PAL set aside a budget of $280 million for its capital expenditure, which it mainly allotted for the acquisition of 5 brand new Airbus aircraft.

During the first half of the year, PAL’s parent company, PAL Holdings, Inc., saw its first-half profit rising nearly ten-fold, which was largely backed by strong passenger demand during the peak summer months.

The company’s interim net income for January to June rose to 5.8 billion from 560 million during the same period last year, while its revenues increased to 55.9 billion from 48.9 billion.

Its passenger revenues also went up 15 percent to 47.1 billion.

Bautista said the third quarter income of PAL will be announced sometime this week.