Cebu Pacific Steps Closer to Record-Breaking Airbus Order

12.07.2024 - 14:57 / skift.com / Gordon Smith

One of the fastest-growing low-cost carriers in Asia looks set to get even bigger. On Tuesday, Cebu Pacific said it had signed a preliminary agreement with Airbus for up to 152 new planes. The transaction is valued at $24 billion, although airlines typically receive discounts for such large orders. 

If realized, the deal from the Filipino operator would represent the largest aircraft deal in the country’s history. Of the 152 planes, up to 102 will be of Airbus’ largest single-aisle jet, the A321neo, with Cebu having options to acquire a further 50 of the smaller A320neo model. 

Even before this latest development, data from aviation analysts Cirium Diio shows that Cebu Pacific already operates a larger fleet than national carrier Philippine Airlines. 

While terms are still to be finalized, the Wall Street Journal reported that the agreement is expected to be completed before the end of the third quarter. 

Michael Szucs, the budget carrier’s CEO, said the order is “designed to provide Cebu Pacific with maximum flexibility to adapt fleet growth to market conditions, with the ability to switch between the A321neo and A320neo.” 

Following a flurry of recent deals, the prospect of another three-figure order will delight Airbus executives. However, as Skift reported last week, the European manufacturer is not immune from industry-wide supply problems. 

The plane maker now expects to deliver around 770 planes before the end of 2024. This is down from the 800 figure shared in an earlier outlook. It would, however, still be higher than the 735 it delivered in 2023.

Airbus’ medium-term delivery outlook – which will be more relevant for Cebu’s pending deal – is less clear at this stage.

While losing any potential business is unwelcome, the preliminary Airbus deal is unlikely to have Boeing losing sleep. As Cebu Pacific flies an all-Airbus fleet, it makes a partial defection to Boeing unlikely as it would reduce operational efficiencies.

Tuesday’s announcement only concerned smaller single-aisle jets, however, Cebu Pacific is one of several low-cost airlines in the Asia-Pacific market to fly widebody planes. High concentrations of price-sensitive consumers make flying larger aircraft practical for Cebu and others such as AirAsia X and Scoot.

There are early signs that this strategy could be spreading beyond Asia-Pacific. In March, Indian low-cost carrier IndiGo placed its first order for 30 Airbus A350s, while flydubai also has deliveries pending for the Boeing 787 Dreamliner. 

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