MANILA— Philippine budget airline Cebu Air Inc CEB.PS said on Tuesday it has agreed to buy a minimum of 70 AIR.PA A321neo aircraft, with options for more, to secure its long-term fleet expansion needs.
READ: Airbus nears initial deal with Cebu Pacific for 70 jets, sources say
Cebu Air, which operates under the name Cebu Pacific, has plans to double its fleet by 2035 to take advantage of a long-term travel boom across Southeast Asia following the pandemic.
Under a binding memorandum, Cebu Air will have the ability to secure additional aircraft subject to certain conditions, bringing the A321neo order to potentially as many as 102 aircraft, Cebu Air said in a statement.
It also includes purchase rights for 50 A320neo jets, which will bring the total order to as many as 152 aircraft worth $24 billion based on list prices, it said. Airlines typically receive discounts to list prices.
Reuters last week reported that Airbus was closing in on a deal with Cebu Pacific to buy 70 narrow-body jets, citing sources.
Cebu CEO Michael Szucs had said the carrier, which operates a fleet of Airbus and ATR aircraft, had been choosing between Airbus and U.S. planemaker Boeing BA.N for the narrowbody order flagged last year.
For the new planes Cebu again chose GTF engines made by RTX RTX.N subsidiary Pratt & Whitney, a type currently in use by Cebu and which is subject to an inspection drive to check for potentially flawed components that have forced airlines including Cebu to temporarily ground planes.
“The order is designed to provide Cebu Pacific with maximum flexibility to adapt fleet growth to market conditions, with the ability to switch between the A321neo and A320neo,” Szucs said.
The final purchase agreement is expected in the third quarter this year.
Deliveries of the firm orders will start no later than 2029, a spokesperson said.
Cebu operates a fleet of 64 Airbus and 14 ATR aircraft, which will increase to 92 by end-2024.
—Reporting by Neil Jerome Morales and Lisa Barrington; Editing by Ed Davies and Louise Heavens
