Philippine airlines face supply woes

MANILA, Philippines — The country’s leading airlines are expected to be troubled this year by delivery delays and supply disruptions, requiring them to get creative in pursuing expansion plans, according to the Centre for Aviation (CAPA).

In an outlook, CAPA said low-cost carriers across Asia and the Pacific will purchase new aircraft in 2024 to replace the older jets that they phased out during the pandemic.

For instance, Cebu Pacific plans to procure up to 150 jets from either Airbus or Boeing in a deal that could likely hit $18 billion at list prices.

“Low-cost carriers are also in the market for large aircraft orders. Cebu Pacific has confirmed it is holding talks with Boeing and Airbus regarding an order for more than 100 narrowbodies, and India’s Akasa Air has signalled that a triple-digit aircraft order is imminent,” CAPA said.

However, CAPA noted that although Asian carriers are going all out with their expansion, some could face issues dealing with their aviation suppliers. CAPA said Philippine operators are most vulnerable to the recall issued by Pratt & Whitney on jet engines of Airbus A320neos.

Cebu Pacific estimates that at least 20 of its 92 aircraft by yearend will be grounded to make way for the repair of their engines.

As the recall affects hundreds of engines worldwide, it is expected that the repair will last longer than usual, about 240 days, injuring the fleet of several carriers like Philippine Airlines and Cebu Pacific.

“Asia-Pacific airlines affected by this [problem] include Air New Zealand, All Nippon Airways, IndiGo, Cebu Pacific and Philippine Airlines, and they have had to adjust their 2024 fleet plans as they look to mitigate the reduced narrowbody capacity by extending leases, securing extra lift, or in some cases cutting back flights,” CAPA said.

To fill in the fleet gap, Cebu Pacific entered into a damp lease for the rental of two aircraft from Bulgaria’s flag carrier Bulgaria Air. The units will be used to deliver Manila flights to Cebu and Davao between January and April.

Meanwhile, PAL is working with Airbus for the delivery of two batches of aircraft. PAL operates a fleet of 79 jets as of 2023 and will add 13 narrow-body units and nine wide-body aircraft down the line.

CAPA said the international capacity of Asia-Pacific airlines reached 85 percent of pre-pandemic levels at the close of 2023, but they trail their counterparts in North America and Europe, where operations are back to, if not exceeding, 100 percent of 2019 numbers.

CAPA said it is important that China recovers its international market for Asia and the Pacific to catch up, noting that the largest Asian country was among the last to reopen to foreign travel.