Cebu Air Inc. on Thursday bared plans to order narrow body aircraft from US aircraft manufacturer Boeing as part of its risk management options and to “diversify risk” in the wake of issues arising from Pratt and Whitney (P&W) engines.
Mike Szucs, chief executive of Cebu Pacific told reporters that the airline was in talks with both Airbus and Boeing for a large order of aircraft in the history of the airline.
“This is an extremely large order for somebody like Cebu Pacific, certainly, but even in the Philippines by far, and the largest order I think that will ever be placed in the Philippines,” Szucs said at the sidelines of the 2023 Aviation Summit on Thursday.
“In the coming week or two we will formally launch the request for proposal and may the best man win. It will be one or the other, we’re not gonna split it between the two. It could be that we order a whole load of new Airbus again or it could be we order a whole load of Boeing. We would think three to six months would be the whole process, hopefully,” he added.
Szucs said Cebu Pacific looks at Boeing aircraft to help diversify risks related to Pratt & Whitney aircraft engines.
Reports indicate engine flaw caused by contaminated metal powder making geared turbofan components more prone to corrosion and cracks, forcing the grounding of units that could cost millions.
“So that we haven’t got all our eggs in one basket and that is an argument. Frankly, we will look at the right outcome financially and operationally, but both products are really good. The Boeing 737 Max is an excellent product and we know because we fly around at the moment,” Szucs siad.
Cebu Pacific operated the Boeing 757 narrow body for international flights from 2001 to 2006.
“The A320 is an excellent product as well, that’s why we’re ambivalent in that sense. It might be the right financial answer so that we can pass on the best ticket prices for our paying passengers,” he added.
Cebu Pacific projects rounding the year with 76 aircraft and expand to 91 aircraft in 2024. The airline is the youngest fleet in the Philippines and includes 25 Pratt & Whitney-powered Airbus aircraft.
The engine issue has already forced the airline to recalculate next year’s growth projections, saying while this has no immediate impact on its operations, “we expect that this will affect our fleet availability in 2024.”
Data from the Civil Aeronautics Board (CAB) show Cebu Pacific carried 7.69 million domestic and international passengers in the first six months this year.
It posted net income of P3.74 billion in the first half, a reversal from P9.5 billion net loss in the same period last year.
Cebu Pacific revenue totaled P43.55 billion or 110.6 percent higher than only P20.68 billion last year.
