Cebu Pacific (CEB) announced on Wednesday the successful acquisition of Southeast Asia’s first-ever sustainability-linked loan (SLL) for a low-cost carrier, a major milestone for both the airline and the region’s aviation industry.
This innovative financial deal facilitated the acquisition of a brand-new Airbus A321neo, delivered to CEB on 23 December 2024. The new aircraft, which features next-generation engine technology, boasts of improved fuel efficiency and reduced environmental footprint compared to older models. The addition of the A321neo aligns with CEB’s ambitious carbon emission reduction targets as part of its commitment to transitioning to an all-NEO fleet by 2028.
Under the terms of the SLL, Cebu Pacific committed to meeting specific sustainability performance targets aimed at reducing the carbon emission intensity of its fleet. The airline will benefit from financial incentives tied to its progress in meeting these goals, reinforcing its decarbonization strategy.
“This financing milestone highlights Cebu Pacific’s ongoing journey toward a more sustainable future,” said Mark Cezar, chief financial officer of Cebu Pacific. “The SLL is a key enabler of our fleet modernization, helping us transition to more fuel-efficient aircraft, and further establishes us as a leader in sustainability within the region’s aviation sector.”
The loan was arranged by Crédit Agricole CIB, which also served as the sole sustainability advisor and mandated lead arranger. Structured under a Japanese operating lease with call option (JOLCO), this deal is seen as a pioneering model for sustainable financing in the aviation industry.
“We are excited to partner with Cebu Pacific on this groundbreaking transaction,” said Bertrand Rovetto, head of aviation group Asia-Pacific at Crédit Agricole CIB. “As pioneers in sustainable finance, we are committed to supporting our clients’ decarbonization efforts, and this deal reinforces our goal of incentivizing progress toward net-zero emissions in the aviation sector.”
The SLL represents a critical step in Cebu Pacific’s broader strategy to integrate sustainability across its operations. Looking ahead to 2025, the airline aims to maintain its leadership in the domestic market while setting a benchmark for sustainable aviation practices regionally.
With this landmark deal, Cebu Pacific is not only enhancing its fleet but also taking a firm stand on its sustainability journey, showing the way for other airlines in Southeast Asia and beyond.
