Airbus takes to the skies with new £4.5bn order

Posted on 29 Aug 2012

Philippine Airlines (PAL) has placed a firm order for over 50 aircraft with European aeroplane manufacturer Airbus.

The deal covers 34 A321s, 10 A321s and 10 A330-300s, which have a list value around £4.5bn, but contracts usually come in below these set prices.

The order follows a period of success for US rival Boeing, which has been securing more new aircraft orders than its European rival. Boeing took double the amount of business during Farnborough International Airshow 2012 than Airbus, largely due with strong growth in its domestic market.

To counter this, Airbus is progressing with plans to set up a manufacturing facility in the America, making it more attractive to patriotic buying patterns.

The 54 aircraft being purchased by PAL is the result of a major fleet modernisation programme at the airline, with deliveries starting in 2013. Asian airliners are increasingly looking to expand their fleets with modern aircraft as middle-class expectancies emerge.

Airbus and Boeing have been two beneficiaries of Asian buying patterns moving towards more expensive, higher quality goods and services, with British car makers Bentley and Jaguar Land Rover also cashing in on the manufacture of products requiring advanced engineering skills.

The single aisle A321 aircraft are being purchased to enhance the airline’s product offerings on domestic and regional routes, as well as to support alliances with its partner airlines.

The widebody A330s will be operated on higher demand regional routes and longer range services to the Middle East and Australia. PAL will announce engine selections for all the aircraft at a later date, with Rolls-Royce a contender for the contract – supplying 55% of Airbus engines.

As the number of business visits and level of tourism increases in the Philippines, PAL chairman Lucio Tan said that the orders will play a key role in revitalising the airline and growing trade and tourism in the country.

Mr Tan added: “With these aircraft we will be able to offer more passengers the best the industry has to offer across our Asia-Pacific network. At the same time, we will benefit from the low operating costs associated with new generation aircraft and the reduced impact on the environment.”

John Leahy, CEO for customers at Airbus said that the announcement demonstrates how airlines (that have the resources) are increasingly buying based on operating economics, taking a long-term outlook on their purchases with the market looking stable as the demand for flights in the region continues to rise.

The new neo engine option for the A321, purchased by PAL, has reduced costs by offering additional fuel savings of 15%.