First Free Story (1 of 3)Join Skift Pro
Flag-carrier Philippine Airlines signed a $7-billion deal on Tuesday to buy 54 Airbus jets as part of an ambitious plan to overhaul its fleet to meet higher demands for transporting passengers and cargo in Asia, the Middle East and Australia, airline officials said.
PAL President Ramon Ang said the first batch of about a dozen wide-body A330-300s and A321s would be delivered in January while the rest of the aircraft would be put in service in the next three years.
The acquisition will more than double the airline’s passenger and cargo handling capacity and signals an expansion phase after Philippine food and beer conglomerate San Miguel Corp. acquired major stakes in PAL and its affiliate budget carrier Air Philippines Corp. earlier this year.
PAL, which currently has 39 aircraft, also plans to buy another 46 aircraft from Airbus and other manufacturers, including Boeing, Ang told a news conference.
Twenty-six of the 100 airplanes the airline wants to buy would be for long-distance journeys, like Manila to New York and to Paris, Ang said.
San Miguel, which is led by Ang, paid $500 million in April for a 40-percent stake in PAL and 49-percent stake in Air Philippines. That capital, Ang said, was enough to buy the initial aircraft from France-based Airbus. Both San Miguel and Filipino-Chinese tycoon Lucio Tan, PAL’s chairman, are ready to infuse more capital into the airline to finance the acquisition of new aircraft, said Ang, adding that that would not be necessary if the airline continues a recovery.
After struggling against losses, depressed markets, high fuel prices and labor unrest, PAL has begun to rebound and generate profits, most recently in June and July, airline officials said.
“The company is registering profits already,” Ang said. “With good financial operations results, I don’t think we’ll still need more funding.”