MANILA, Philippines - National flag carrier Philippine Airlines Inc. (PAL) is spending $280 million for its capital expenditures this year primarily to finance the acquisition of five brand new Airbus aircraft.
PAL president and chief operating officer Jaime Bautista said the airline has earmarked $250 million for the acquisition of five A321 aircraft and another $30 million for spare parts.
Bautista said PAL is scheduled to take the delivery of five A321 aircraft this year of which one has already been delivered and another one is scheduled to arrive before the end of the month.
PAL is also scheduled to take the delivery of two A321 aircraft next month and another one in May.
According to Bautista, the airline has already finalize the sale and lease of the first two A321 aircraft and is now talking with foreign financial institutions for the finance lease of the remaining three A321.
“We will borrow money from financial institutions. The financing for the five aircraft is almost done,” Bautista said.
He refused to name the foreign financial institutions saying PAL is bound by a non-disclosure agreement but revealed that the airline is borrowing up to $250 million.
Bautista said PAL is looking for brand new aircraft for its long-haul operations to beef up its existing fleet of six Boeing 777-300ER and six Airbus A340-300. “We are in the process of preparing a long term fleet plan for PAL. What we have finalized is for domestic and regional only but for long haul, we have yet to finalize our fleet plan,” he said.
Initially, he said the airline is looking at the Boeing 787 or the Dreamliner as well as the Airbus A350 aircraft.
PAL is looking at replacing its fleet of A340-300 over the next five years with more fuel efficient aircraft as these consumes a lot of fuel and are more expensive to maintain, Bautista said.
“We will change the A340 over time because there are 12-year old airplane. Maybe over the next five years,” he said.
The PAL group including low cost carrier unit PAL Express has a fleet of 75 aircraft consisting mainly of Airbus and Boeing.
The Tan Group through Buona Sorte and Horizon Global Investments bought back the 49 percent interest of SMC’s San Miguel Equity Investments Inc. (SMEII) last Sept. 15 for $1.3 billion.