PAL to take out $280M loan to boost Airbus fleet

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Photo from PAL Facebook account.
Photo from PAL Facebook account.
Photo from PAL Facebook account

Flag carrier Philippine Airlines will be spending US$280 million this year to acquire five new Airbus aircraft.

PAL president and chief operating officer Jaime Bautista said the airline will borrow $250 million to obtain the five A321 aircraft and will get another $30-million loan for spare parts purchases.

“The two aircraft is through sale and lease which we have already finalized, while the remaining three aircraft is finance lease so we will borrow money from financial institutions,” Bautista said, adding that the PAL board had already approved the financing.

The five aircraft is scheduled for delivery this year, of which one has already been delivered and the other is expected to arrive before the end of March.

The delivery of two more A321 aircraft is scheduled for April and the last one will be delivered in May.

PAL, after its full takeover by the Lucio Tan Group, earlier secured consent from Airbus to defer the delivery of 33 aircraft orders to 2024 from the original schedule of 2020.

The flag carrier is now preparing a long-term fleet plan, according to Bautista, adding that PAL has already finalized its fleet plan for the domestic and regional operations but not its long-haul operations yet.

He added that PAL is also looking at replacing its fleet of A340-300 with more fuel-efficient aircraft over the next five years. He said PAL will let go of its A340 fleet over time “because these are 12-year-old airplanes.”

PAL, together with sister airline PAL Express, owns a fleet of 75 aircraft consisting mainly of Airbus and Boeing units.

Meanwhile, PAL Express will be stopping its Manila-Dubai flights starting April as it intends to focus on domestic operations. PAL in August 2013 transferred almost all its domestic flights to PAL Express.

Bautista said PAL plans to take over the Dubai flights of PAL Express by April since the flag carrier owns the aircraft used by PAL Express for the route.

He continued that while PAL Express will focus on domestic destinations, other routes which have business class, such as Cebu and Davao, will remain with PAL.