Author Topic: Philippine Airlines orders 54 Airbuses worth $7 bn  (Read 1978 times)

urbanmisfit17

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Philippine Airlines orders 54 Airbuses worth $7 bn
« on: August 28, 2012, 05:53:40 AM »
Philippine Airlines orders 54 Airbuses worth $7 bn

Philippine Airlines announced Tuesday it had ordered 54 Airbus aircraft with a list price of $7 billion, and planned to buy dozens more planes in a spectacular move to rejuvenate Asia's oldest carrier.

Ang told reporters PAL was looking to buy 100 new planes in total, and that discussions were under way with Boeing as well as Airbus to secure the extra aircraft.

He said PAL was adopting strategies employed by other Asian airlines of building a budget brand -- Airphil Express -- to take on low-cost rivals while also building its premium and long-haul products.

http://ph.news.yahoo.com/pal-orders-54-airbus-aircraft-worth-7-billion-061957795--finance.html

40niner_com

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Re: Philippine Airlines orders 54 Airbuses worth $7 bn
« Reply #1 on: August 28, 2012, 06:31:46 AM »
Photo release from PAL official website.

Philippine Airlines today inked with Airbus the biggest aircraft deal in Philippine history involving a firm order for more than 50 single-aisle and wide-body jets, with a list price of approximately US$7 billion. Photo shows PAL and Airbus officials during the signing ceremony at Century Park Hotel, from left, PAL vice chairman and treasurer Harry C. Tan, PAL Chairman Dr. Lucio C. Tan, Airbus Senior VP for Asia Jean Francois Laval and PAL President Ramon S. Ang.

Official statement : http://www.philippineairlines.com/news/pal_buys_aircraft.jsp
28 August 2012
PAL buys Airbus aircraft in US$7B deal
Biggest aircraft deal in RP history

MANILA, Philippines (28 August 2012) - Philippine Airlines (PAL) has placed a firm order with Airbus covering more than 50 aircraft consisting of single aisle A321s and widebody A330-300s, the latest HGW (High Gross Weight) models. The first batch of aircraft is being ordered under a major fleet modernization program at the airline with deliveries starting in 2013.

The single aisle A321 aircraft are being purchased to enhance the airline’s product offerings on domestic and regional routes, as well as support alliances with partner airlines. The A330s will be operated on higher demand regional routes and longer range services to the Middle East and Australia. PAL will announce engine selections for all the aircraft at a later date.

PAL’s refleeting program is in line with management’s efforts to strengthen the flag carrier and help boost the Philippine economy.

“The orders we are placing with Airbus will play a key role in revitalizing PAL and growing trade and tourism in the country,” said PAL Chairman Lucio Tan and PAL president Ramon S. Ang. “With these aircraft we will be able to offer more passengers the best the industry has to offer across our Asia-Pacific network. At the same time, we will benefit from the low operating costs associated with new generation aircraft and the reduced impact on the environment.”

“We are extremely pleased that PAL has placed its confidence in our aircraft to meet its future requirements,” said John Leahy, Chief Operating Officer, Customers, Airbus. “This announcement demonstrates once again the popularity of both the A320 Family and the A330, which remain leaders in their size categories in terms of operating economics, reliability and passenger comfort.”
... [click on the link for full article]
« Last Edit: August 28, 2012, 06:34:47 AM by 40niner_com »
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P.Jacinto

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Re: Philippine Airlines orders 54 Airbuses worth $7 bn
« Reply #2 on: August 28, 2012, 06:26:27 PM »
I found an interesting bit about PAL's purchase and its political dimension.

http://www.reuters.com/article/2012/08/28/us-philippines-airbus-pal-idUSBRE87R04120120828

Quote
DIPLOMATIC DIMENSION

A territorial spat in the South China Sea, Asia's biggest potential military flashpoint, appears to have added a diplomatic dimension to the aircraft order talks as Washington seeks to cement a growing alignment with Manila on the issue.

One person familiar with the matter said there had been significant "commercial and political pressure" on the airline to secure a deal with Boeing.

Boeing declined to comment.

Washington acknowledged there was indeed a lobby for PAL to award the contract to Boeing  but claimed that is routine.

I wonder if there was the same lobby from the Europeans...




anak ni sarge

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Re: Philippine Airlines orders 54 Airbuses worth $7 bn
« Reply #3 on: August 28, 2012, 07:31:58 PM »
A $7B contract is big. I wonder how many years will it take Airbus to deliver all 50 aircraft and how long will PAL have to pay the manufacturer the amount.

Are Airbus commercial planes superior in design compared to Boeing's? I have noticed even US Domestic Airlines are using Airbus planes. Didn't the manufacturer almost win the contract to supply the next generation of air tankers to USAF?

Boeing's 747 should still remain very competitive though. Even if Airbus' Zeppelin-looking mega air carrier can claim it is larger than Boeing 747, many airlines will still buy the latest gen 747. I would guess the next big carrier of PAL would still be a Boeing 747.
PN according to Manokski:
"something gray with a side number on it that floats"
PAF according to Ramon J. Farolan:
"we are now basically a helicopter fleet"
PA according to drkula
"it is better to talk forever than fight forever"


  Anak ni sarge

"Applying the standards of the rest of the country for what is acceptable and logical behavior in order to predict what this group of people will do is dangerous and can be faulty. Too many analysts and military commanders have already made that same mistake."
ka nognog

boomshine

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Re: Philippine Airlines orders 54 Airbuses worth $7 bn
« Reply #4 on: August 28, 2012, 07:50:12 PM »
I have read this a while back from wiki:

Quote
Few crashes have been attributed to design flaws of the 747. The Tenerife airport disaster resulted from pilot error, air traffic control (ATC) error, and communications failure, while the Japan Airlines Flight 123 and China Airlines Flight 611 crashes stemmed from improper aircraft repair. United Airlines Flight 811, which suffered an explosive decompression mid-flight on February 24, 1989, led the National Transportation Safety Board (NTSB) to issue a recommendation that 747-200 cargo doors similar to those on the Flight 811 aircraft be modified. Korean Air Lines Flight 007 was shot down by the Soviets in 1983 after it had strayed into Soviet territory, causing U.S. President Ronald Reagan to authorize the then-strictly military Global Positioning System (GPS) for civilian use.[190] TWA Flight 800, a 747-100 that exploded in mid-air on July 17, 1996, led the FAA to propose a rule requiring installation of an inerting system in the center fuel tank of most large aircraft that was adopted in July 2008, after years of research into solutions. It is expected that the new safety system will cost US$100,000 to $450,000 per aircraft and weigh approximately 200 pounds (91 kg).[191]

P.Jacinto

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Re: Philippine Airlines orders 54 Airbuses worth $7 bn
« Reply #5 on: August 28, 2012, 07:56:23 PM »
Comparing the Airbus 330 vs Boeing 777 though, the 777 has a much better safety record.  0 casualties compared to 339 for the airbus.

http://www.aviation-safety.net/database/type/type-stat.php?type=023
http://aviation-safety.net/database/type/type-stat.php?type=107

anak ni sarge

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Re: Philippine Airlines orders 54 Airbuses worth $7 bn
« Reply #6 on: August 28, 2012, 09:04:27 PM »
Unless someone leaks the tender of Boeing and Airbus, we'll never find out what made PAL choose Airbus over Boeing.
PN according to Manokski:
"something gray with a side number on it that floats"
PAF according to Ramon J. Farolan:
"we are now basically a helicopter fleet"
PA according to drkula
"it is better to talk forever than fight forever"


  Anak ni sarge

"Applying the standards of the rest of the country for what is acceptable and logical behavior in order to predict what this group of people will do is dangerous and can be faulty. Too many analysts and military commanders have already made that same mistake."
ka nognog

davemap

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US State Department Statement with regard to the PAL purchase
« Reply #7 on: August 28, 2012, 10:14:45 PM »
http://www.edmontonjournal.com/business/all/Philippine+Airlines+signs+billion+deal+Airbus+jets+meet/7154280/story.html

..........

In Washington, U.S. State Department spokeswoman Victoria Nuland suggested American officials have lobbied for Boeing to get the aircraft deal with PAL but added the awarding of the contract to Airbus would not affect Washington's relations with the Philippines, which has been bolstered in recent years.

Asked if the U.S. government lobbied for the Philippines to award the deal to Boeing over Airbus, Nuland said: "We always advocate for U.S. companies, particularly when there's a big contract at stake."

"But, you know, nations make sovereign decisions and they make them based on their own set of criteria," Nuland said.

..........

Philippine money is going to Europe...Hate to say this but its the US fault...imagine an 80s era Frigate goes to Pakistan complete with armament, Some country in europe gets a free fairly new navy ships...What did the Philippine gets....an 60s era Cutter stripped with armaments.

Cebu Pacific is going French Airbus and just recently a second order is made after selling their older (6 yr old!!) airplanes., PAL is going French Airbus, Our Navy is going Italian Frigates, Our Airforce is going with French Eurocopter, and South korean Eagles.

Is high time the US give some value to the Philippines.
« Last Edit: August 28, 2012, 10:17:59 PM by davemap »
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arkitek4

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Re: US State Department Statement with regard to the PAL purchase
« Reply #8 on: August 28, 2012, 11:00:45 PM »
http://www.edmontonjournal.com/business/all/Philippine+Airlines+signs+billion+deal+Airbus+jets+meet/7154280/story.html

..........

In Washington, U.S. State Department spokeswoman Victoria Nuland suggested American officials have lobbied for Boeing to get the aircraft deal with PAL but added the awarding of the contract to Airbus would not affect Washington's relations with the Philippines, which has been bolstered in recent years.

Asked if the U.S. government lobbied for the Philippines to award the deal to Boeing over Airbus, Nuland said: "We always advocate for U.S. companies, particularly when there's a big contract at stake."

"But, you know, nations make sovereign decisions and they make them based on their own set of criteria," Nuland said.

..........

Philippine money is going to Europe...Hate to say this but its the US fault...imagine an 80s era Frigate goes to Pakistan complete with armament, Some country in europe gets a free fairly new navy ships...What did the Philippine gets....an 60s era Cutter stripped with armaments.

Cebu Pacific is going French Airbus and just recently a second order is made after selling their older (6 yr old!!) airplanes., PAL is going French Airbus, Our Navy is going Italian Frigates, Our Airforce is going with French Eurocopter, and South korean Eagles.

Is high time the US give some value to the Philippines.

And don't forget, stripped of valuable systems.   (|8|
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iceman02

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Re: Philippine Airlines orders 54 Airbuses worth $7 bn
« Reply #9 on: August 28, 2012, 11:31:00 PM »
Philippine Airlines will pay Airbus in cash, with part of the money to come from bank loans, said President Ramon Ang, who also heads Philippine conglomerate San Miguel Corp (SMC.PS).
http://www.reuters.com/article/2012/08/28/us-philippines-airbus-pal-idUSBRE87R04120120828



A $7B contract is big. I wonder how many years will it take Airbus to deliver all 50 aircraft and how long will PAL have to pay the manufacturer the amount.


« Last Edit: August 28, 2012, 11:37:05 PM by iceman02 »

boomshine

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Re: Philippine Airlines orders 54 Airbuses worth $7 bn
« Reply #10 on: August 28, 2012, 11:49:39 PM »
What the hell diba mababa na ang profit ng PAL? tapos nag loan sila ng $7B!!! kelan pa kaya nila mababawi yang ganyang kalaking capital?  :bash:

ginoginoako

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Re: Philippine Airlines orders 54 Airbuses worth $7 bn
« Reply #11 on: August 28, 2012, 11:54:26 PM »
It's nice to know that PAL is still hanging on and trying to get back on it's feet. I thought they are already losing a lot of money. But I guess they have realized that the money is really with the budget carriers just like Cebu Pacific's never ending promo fare. If PAL can hang on all the better for our country. They can bring in more tourist from other countries through their international flights and can further drive down the domestic airfare by competing with Cebu Pacific. Lower domestic air fare = bigger domestic tourism industry.

miggye

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Re: Philippine Airlines orders 54 Airbuses worth $7 bn
« Reply #12 on: August 29, 2012, 12:12:37 AM »
A $7B contract is big. I wonder how many years will it take Airbus to deliver all 50 aircraft and how long will PAL have to pay the manufacturer the amount.

Are Airbus commercial planes superior in design compared to Boeing's? I have noticed even US Domestic Airlines are using Airbus planes. Didn't the manufacturer almost win the contract to supply the next generation of air tankers to USAF?

Boeing's 747 should still remain very competitive though. Even if Airbus' Zeppelin-looking mega air carrier can claim it is larger than Boeing 747, many airlines will still buy the latest gen 747. I would guess the next big carrier of PAL would still be a Boeing 747.

hi anak ni sarge, had a long talk with a ninong of mine who was privy to this deal. Airbus bagged the deal because; they offered their aircraft cheaper, they were willing to do a trade-in for the older Airbus aircraft already in PAL's inventory, and they could start deliveries next year.

Airbus makes their aircraft cheaper because they have government subsidies from the respective nations that make up the consortium (this has led to numerous complaints from Boeing). its not that they are safer, the 737 still holds that record, but if you could buy an A320 for 10% less, then economics for running an airline would tip the scale in Airbus' favor.

even with all of these Airbus orders, however, PAL will be using an all-Boeing transcontinental fleet, and are finalizing orders for 4 747-8s, 2 more 777-300ERs (PAL has 3 already and waiting for 3 more already ordered), plus at least 12 787s.
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miggye

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Re: Philippine Airlines orders 54 Airbuses worth $7 bn
« Reply #13 on: August 29, 2012, 12:20:09 AM »
What the hell diba mababa na ang profit ng PAL? tapos nag loan sila ng $7B!!! kelan pa kaya nila mababawi yang ganyang kalaking capital?  :bash:

boomshine, the primary reason that PAL is loosing money is their high overhead and operating costs with cost of fuel making up a significant portion. that is one reason they are re-fleeting with new aircraft that are cheaper to operate and maintain, and are more fuel efficient (with new NEO engines burning 16% less fuel, and techno wings adding 3.5% more fuel efficiency).

the fact that there's a trade-in for older aircraft makes it all sweeter for PAL.
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King Cobra

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Re: Philippine Airlines orders 54 Airbuses worth $7 bn
« Reply #14 on: August 29, 2012, 12:37:26 AM »
I got a similar info that Miggye shared. Price, trade-ins & priority slots given by Airbus. Not to mention that most PAL AC are Airbuses also which makes it easier for maintenance. Rumor is that the long haul will be in favor of Boeing.

Aside from all these, Airbus has a long history with PAL. During the 1997 Asian crisis, Airbus made it easy for PAL to cancel orders it already signed. Boeing on the other hand was still strict about its orders that it did not cancel the remaining 747-400s. One of the last pending order of the B744 was for PAL, but was later converted to the current B773. (not blaming Boeing since business is business)

Since Airbus somewhat helped PAL before and is more flexible in their business decisions, it was no surprise that PAL ordered from Airbus.

IMHO, the recent order did not include real politics. But I do believe that the real politics started AFTER the Airbus order. Now PAL has the muscle to at least request the EU to exempt PAL from the airline blacklist (the EU did the same exemption to Garuda Indonesia before even though Indonesia itself was still black listed at that time). PAL can now show the US that it is capable of ordering a lot of AC and are still thinking of ordering more. Therefore the Phil Gov't through PAL can request a review of Cat 2 ASAP and see what will happen.