Cebu Pacific in talks with Boeing for 737 fleet

MANILA  -Budget carrier Cebu Pacific— the Philippines’ largest airline by market share and fleet size—is in talks for the possible acquisition of narrow body airliners from US planemaker Boeing to augment its jet aircraft fleet that has been the exclusive domain of Airbus for the better part of two decades.

More importantly, the Inquirer learned that the Gokongwei family-controlled firm is eyeing to establish an operations hub in the New Manila International Airport currently being built by conglomerate San Miguel Corp. in Bulacan as part of the airline’s expansion plans.

“Following disappointments regarding Airbus’ delays and (jet engine manufacturer) Pratt & Whitney’s (supply chain issue) issues, Cebu Pacific’s executive leadership team met with Boeing in Seattle to explore the B737 fleet,” an airline executive told the Inquirer, referring to the popular 737 aircraft line that competes directly with the A320 line of its European rival.

The high-ranking executives of the Gokongwei family-controlled airline who visited Boeing’s manufacturing facility in Washington were its president Xander Lao, chief executive Michael Szucs, chief financial officer Mark Cezar, chief marketing officer Candice Iyog and vice president for customer service operations Lei Apostol.

On Tuesday, a ranking Cebu Pacific official told the Inquirer that the company plans to take advantage of the upcoming Bulacan airport—whose first phase may be operating by 2026, according to San Miguel —as its next operating hub.

“We are looking at a process for our narrowbody refleeting based on building another large base in Bulacan,” the official said. “So it will be a big enough base for us to operate Airbus from Naia (Ninoy Aquino International Airport) and either Boeing or Airbus for Bulacan depending on who gives us best deal.”

The airline’s shift in stance from being an exclusive operator of Airbus jets (augmented by twin-engined turboprops from French-Italian platemaker ATR) to starting exploratory talks with Boeing marks a significant shift in strategy for the airline that started operations in 1996 with second hand DC-9 aircraft.

Cebu Pacific operated three Boeing 757 narrowbody airliners for its international flights from 2001, but retired them in 2006. Since then, it has operated exclusively Airbus aircraft, saying that it realizes significant savings by using planes made only by one manufacturer.

Company insiders said, however, that recent frustrations with Airbus and engine manufacturer Pratt & Whitney — which the airline blamed for flight cancellations and aircraft groundings as a result of these firms’ supply chain issues — made it rethink this strategy.

At a certain point, the cost of being tied to single manufacturers starts to outweigh the savings, one executive explained.

READ: Cebu Pacific to add 6 new aircraft this year