Cebu Pacific has confirmed it is in the “closing stages” of negotiations for the order of up to 150 narrowbody aircraft, with a likely announcement “a month of two away”.
Airline chief Mike Szucs says the Philippine operator has been making “good progress” in its ongoing campaign for new narrowbodies.
Speaking at the airline’s annual results briefing, Szucs states: “[There’s] a clear understanding of what we expect. We think the the aircraft types either from Boeing or indeed from Airbus are fit for purpose…and we now absolutely want to make sure that we get the best economic outcome for us, for our stakeholders and ultimately for the customers.”
The airline in October 2023 confirmed plans to order up to 150 narrowbodies, in what what could be the Philippine’s largest aircraft commitment. It then issued a request for proposals (RFP) to the two airframers, with a deadline of end-2023.
Szucs says it is “important for us to ensure we get very competitive pricing” on the new aircraft, adding that “we can pass that [cost] benefit on to our customers over the years to come”.
Earlier media reports have indicated that the deal could be worth at least $12 billion, according to list prices.
Cebu is an all-Airbus operator, with a fleet of A320 family aircraft, as well as A330s.
Szucs’s comments come as the low-cost carrier rebounded to an operating profit in 2023, helped by an uptick in passenger travel revenue.
For the year ended 31 December 2023, Cebu Pacific posted an operating profit of Ps8.6 billion ($153 million), compared to 2022’s full-year loss of Ps11.4 billion. However, Cebu notes the figure is down about a third compared to 2019’s operating profit, due largely to an increase in costs.
Full-year revenue was up 60% year on year to Ps90.6 billion, outpacing a 20% rise in operating costs, which stood at Ps82 billion.
However, compared to pre-pandemic 2019, Cebu Pacific noted a sharper rise in costs, at 14%, against revenue, which only grew 7%.
Other than fuel costs, which grew 36% compared to 2019, the airline cites other cost increase drivers included higher airport and crew costs, an increase in fleet costs, as well a digitalisation and customer initiatives.
Cebu Pacific posted a net profit of Ps7.9 billion, reversing a Ps14 billion net loss in 2022.
In the October-December quarter, the airline reported an operating profit of Ps2.4 billion, compared to Ps200 million loss in the year-ago period.
