Cebu Pacific set to favor Airbus in deal for as many as 150 jets

Airbus SE is closing in on a large single-aisle jet order from Cebu Pacific Air, with the carrier planning to sign up for as many as 150 A320neo aircraft that would more than double the Asian airline’s fleet size.

A deal would include about 50 optional purchases, according to people familiar with the negotiations. Philippines-based Cebu and Airbus may announce the accord at the Farnborough Air Show later next month, said one of the people, who asked not to be identified because the discussions are confidential.

Cebu Pacific — controlled by tycoon Lance Gokongwei and his family’s conglomerate JG Summit Holdings Inc. — has previously said it’s in the market for about 100 single-aisle planes and options for a further 50 as part of a major expansion. 

Chief Executive Officer Mike Szucs said earlier this year that Boeing Co. “had a reasonable chance” of also being considered for the purchase, given that Airbus’s popular single-aisle family is sold out until the end of the decade.

Representatives for Cebu, Airbus and Boeing declined to comment. The people cautioned that no deal has been formally signed, and that details of an agreement and the timing could still change. 

Boeing had been looking to win over a loyal Airbus customer as it seeks to expand the customer base for its 737 Max jet in Southeast Asia. Cebu Pacific, the largest airline in the Philippines, has a fleet of about 85 Airbus and some smaller ATR turboprop aircraft, and an existing order book of more than 30 planes from the European manufacturer

In leaning toward Airbus, Cebu Pacific appears to have kept its faith with the European planemaker despite delivery delays. The budget carrier is managing problems with Pratt & Whitney engines on some grounded jets in its fleet, forcing it to bring in additional leased planes to backfill the shortfall.

Szucs has one eye on expansion while maintaining Cebu Pacific’s 55% domestic market share against a resurgent Philippine Airlines Inc. To that end, he needs new jets to maintain long-term growth, especially as Manila builds a new four-runway international airport. 

The ambitious target is backed by the Philippines’ booming population of 115 million people, buoyant economic growth and increasing travel around the region.