Philippine Air To Expand Fleet, International Routes
October 20, 2006
Philippine Airlines (PAL) said on Friday it wanted to add eight wide-bodied planes to its fleet and would decide by the end of the year whether to buy them from Boeing or Airbus, for delivery from 2008.
The Philippine flag carrier will use the new aircraft to expand its routes to the United States and Canada and to return to Europe after an absence of about a decade.
"We are still evaluating whether Airbus or Boeing," PAL President Jaime Bautista told reporters. "We are still negotiating."
He said PAL, Asia's first commercial airline, was considering buying or leasing either Airbus A340-600 or Boeing 777-300ER planes.
"We can get the support of the export credit agencies or US Eximbank or we can do... an operating lease," Bautista said when asked how the company would fund the aircraft acquisition.
"We will borrow from banks," PAL Chairman Lucio Tan told reporters separately.
The expansion is on top of the 20 narrow-bodied Airbus planes that PAL is set to acquire, starting this year, for more than USD$840 million. On Friday PAL unveiled the first of the 20 planes, an A319, which it plans to use for domestic and regional flights.
PAL officials said the list price of each wide-bodied plane was around USD$250 million.
The airline now has nine wide-bodied planes -- five Boeing 747-400s and four Airbus A340-300s -- flying to San Francisco, Los Angeles and Las Vegas in the United States and Vancouver, Canada.
PAL flies to 19 domestic and 24 international destinations. It wants to expand its foreign routes to include Seattle and San Diego initially.
The airline had a fleet of 32 aircraft at the end of March.
PAL, which shut briefly in 1998 due to labor disputes before entering into a 10 year rehabilitation program, is aggressively expanding despite a projection of a global industry loss of USD$1.7 billion this year, volatile fuel costs and only a modest expected rise in global passenger traffic of 4.8 percent.
(Reuters)




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