Cebu Pacific [CEB 27.20, up 0.4%; 91% avgVol] [link], the Gokongwei Family’s budget airline, announced that it has signed a memorandum of understanding with Airbus to purchase up to 152 A321neo planes for $24 billion (~P1.4 trillion). The order breakdown includes 102 “firm” purchases, plus 50 “A320neo Family purchase rights”, which CEB said will give the airline “maximum flexibility to adapt fleet growth to market conditions, with the ability to switch between A321neo and A320neo” plane configurations. CEB expects to finalize the transaction in Q3 of this year. According to CEB, this is the largest aircraft order in Philippine history.
MB bottom-line: The A321neo is the most popular in the Airbus fleet, and there is a massive backlog of undelivered orders that this new CEB order will only make more ridiculous. According to Airbus, in February 2024 they were reporting an outstanding order amount of 5,000 A321neo planes (~25 years of production?) and 4,000 A320neo planes (~11 years of production?). While the majority of CEB’s order is for the most popular configuration, the 50-plane “Family purchase rights” clause could maybe be used by CEB to compromise on its preferred configuration to simply reduce the lead time for the new planes to join its fleet. All of this data is just stuff that I’ve pulled from Airbus and from other analysts around the internet, so I’d love to get a real update from CEB once the deal is signed to get a better idea of the timeline for these deliveries.
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