Philippine Airlines to acquire 18 Airbus aircraft in major refleeting move

Philippine Airlines and Airbus signed a purchase agreement Tuesday that launches the flag carrier's modernization program for its narrow-body fleet - a move that will see PAL acquire up to 18 Airbus A320 family aircraft.

The package includes a firm order for nine brand-new A320 jets and options for five more new A320s valued at approximately $840 million based on list prices.

In addition to the 14 A320s covered by the Airbus deal, PAL will also lease two brand-new A320s and two A319s from GE Commercial Aviation Services.

PAL has also selected the CFM 56-5B engine manufactured by CFM International to power its new A320 family aircraft. CFM is a joint venture between GE Aircraft Engines and Snecma Moteurs of France.

Deliveries of the firm orders as well as leased units will commence in the second half of 2006 and continue until 2008. Deliveries of the option aircraft, should PAL take them up, will start in 2009 and run until 2012.

By December 2008, when the major part of the refleeting program is completed, PAL will have an all-new narrow-body fleet consisting of 14 A320s and two A319s. This will give the airline the advantage of operating a uniform fleet, with one aircraft type, one engine type and one bi-class cabin layout.

Currently, PAL operates a mixed fleet of 14 narrow-body aircraft comprising seven A320s, four Boeing 737-300s and three Boeing 737-400s.

"In modernizing our narrow-body fleet, our objectives are to improve on our operational benchmarks, offer an enhanced and consistent service to our passengers, and optimize revenue through commonality of equipment. We believe the A320 family provides PAL the means to achieve these goals," said PAL vice chairman and treasurer Mariano Tanenglian

Airbus president and CEO Gustav Humbert said, "PAL has been an Airbus operator for more than 25 years and I am delighted that the positive experience with the A320 in recent years has contributed significantly to this further order for the type. The new A320s will ensure PAL's ability to further maximize profit potential, while offering passengers the highest standards of inflight comfort available today."

PAL's new narrow-body aircraft will be deployed mainly on the airline's extensive domestic network. They will also serve some low-traffic Asian regional destinations. All aircraft will be configured to have both business and economy class cabins.

The A320s will have 12 Mabuhay (business)-class and 144 economy-class seats while the A319s will have 8 Mabuhay-class and 126 economy-class seats.

All aircraft are outfitted with new-generation seats and the latest inflight entertainment system in both classes. Mabuhay-class seats feature personal TV and come with in-seat power supply that allows passengers to operate laptop computers.

The Mabuhay class cabin is also equipped with Panasonic's "EFX" inflight entertainment system, considered cutting-edge technology in the industry and capable of providing Audio Video On-Demand (AVOD) to passengers.

"Our brand-new aircraft, equipped with the most modern technology and amenities, will allow PAL to offer an unmatched product to the market. This fleet modernization program is a fitting milestone as we mark PAL's 65th anniversary in March 2006," said Tanenglian.

PAL is a long-time A320 operator. The carrier took delivery of its first such jet on August 12, 1997, immediately deploying it on a regular flight from Manila to Cebu, PAL's busiest domestic trunk route.

The airline is likewise an old Airbus customer, having acquired its first Airbus aircraft, an A300-B4, on November 30, 1979. In 1997, PAL became the first airline in the world to operate the full range of new-generation Airbus aircraft, consisting of the A320 and its wide-body cousins, the A330 and the A340.

Currently, in addition to seven A320s, PAL also operates eight A330s and four A340s.

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