PAL, Airbus sign $840-million deal

Flag carrier Philippine Airlines (PAL) signed yesterday a deal with European aircraft manufacturer Airbus Industrie for the purchase of nine new Airbus A320 jets and options for five more aircraft.

The deal is valued at approximately $840 million, based on list prices.

The package includes a firm order from PAL for nine new A320s and options for five more new A320s, the companies said at the signing ceremony. The single-aisle plane typically seats 150.

As part of the deal, PAL also will lease two new A320s and two A319s from GE Commercial Aviation Services, an international aircraft lessor.

At a press conference at the Makati Shangri-La Hotel, PAL president and chief operating officer Jaime Bautista said the A320 aircraft would have 12 Mabuhay or business class seats and 144 economy seats each. It will be the first plane in the country to offer business class seats on domestic flights.

The A319s, on the other hand, will have eight Mabuhay class seats and 126 economy class seats.

Bautista said the acquisition of the new Airbus aircraft will generate savings on fuel and maintenance for the airlines. It will also enable the flag carrier to offer "very competitive" rates and improved services in the face of increased competition from low-cost carriers.

"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," Airbus president Gustav Humbert said in a statement.

Bautista said last month the company plans to borrow from export credit agencies to fund the purchases. The new aircraft will service domestic and regional routes, he said.

Deliveries of the new aircraft as well as the leased units will begin in the second half of 2006 and last until 2008.

When PAL’s major re-fleeting program is completed in 2008, 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 B-class cabin layout.

PAL, which flies to 26 foreign destinations, currently operates a mixed fleet of 14 narrow-body aircraft comprising seven A320s, four Boeing 737-300s and three Boeing 737-400s.

"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 2006," said PAL vice chairman and treasurer Mariano Tanenglian. — With Rainier Allan Ronda, AP