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UPDATE 1-Philippines' Cebu Air orders 7 Airbus planes, delays delivery of earlier order
June 7, 2017 / 10:49 AM / 2 months ago

UPDATE 1-Philippines' Cebu Air orders 7 Airbus planes, delays delivery of earlier order

* Seven A321CEO planes valued at $812 mln based on list prices

* Says defers A321NEO deliveries due to engine delays (Adds quotes from statement, context)

By Enrico Dela Cruz

MANILA, June 7 (Reuters) - Philippine low-cost carrier Cebu Air Inc said it has placed an order with Airbus for seven A321CEO planes worth $812 million to meet increased capacity needs but is delaying deliveries of 32 A321NEO planes already ordered by about a year.

Cebu Air, also known as Cebu Pacific, said in a statement on Wednesday the seven A321CEO aircraft are for delivery from March 2018. The A321NEO aircraft will now be delivered between the fourth quarter of 2018 until 2022, compared to the earlier plan of deliveries beginning September 2017 until 2021, it said.

Cebu Air said it has decided to defer the A321NEO deliveries due to delays with the Pratt & Whitney engines selected to power the aircraft.

"We have decided to take a conservative approach to the introduction of the A321NEO into our operations," Cebu Air Chief Finance Officer Andrew Huang said in the statement. "We remain confident that Pratt & Whitney will address all issues on the GTF (Geared Turbo Fan) engine."

Pratt & Whitney, the aircraft-engine unit of United Technologies Corp, did not immediately respond to an emailed request for comment.

The $812 million value of the latest order is based on list prices. Aircraft manufacturers typically give discounts to list prices.

Airlines in Southeast Asia, including AirAsia and Vietjet Aviation JSC, have placed large aircraft orders in recent years, driven by the potential of rapid growth in the region.

Airbus COO John Leahy was quoted in the Cebu Air statement as saying that the airline will be able to respond to growing demand with the A321 purchases.

Cebu Air and its main rival Philippine Airlines are busy expanding their fleets, especially given favorable conditions in the domestic market amid the growth momentum for the local economy.

Cebu Air recently took delivery of two brand-new planes, an Airbus A330 and an ATR 72-600, bringing its fleet to 61. Its fleet now comprises four Airbus A319, 36 Airbus A320, eight Airbus A330, eight ATR 72-500, and five ATR 72-600 aircraft.

The carrier flies to 37 domestic and 26 international destinations, operating over 100 routes spanning across Asia, Australia, the Middle East and the United States. (Reporting by Enrico dela Cruz; Editing by Muralikumar Anantharaman)

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