China Bank lends PAL $329 M for new planes

FILE PHOTO

MANILA, Philippines – China Banking Corp. (China Bank) has arranged a $329 million financing for Philippine Airlines’ purchase of seven new Airbus aircraft as part of the flag carrier’s refleeting program.

China Bank, which is part of the SM group of companies, is the sole arranger for the financing for seven Airbus A321-200 aircraft.

The first of these state-of-the-art jets, said to be among the most modern and safest airplanes to soar in Philippine skies, arrived in Manila from Hamburg, Germany last August 7.

The aircraft were being financed through an innovative operating lease basis which the bank said was reflective of PAL’s ability to “diversify its funding sources and effectively manage its capital requirements.”

“China Bank is honored to support PAL in its fleet renewal program and the modernization of the country’s aviation sector,” China Bank president Peter Dee said in a press statement on Friday, which coincides with the bank’s 93rd anniversary celebration.

China Bank is a key player in aircraft financing. It also acted as sole arranger for the acquisition of four new airplanes of another airline company early this year.

The arrival of its first A321 officially puts in motion Philippine Airlines’ fleet renewal that covers firm orders for 65 aircraft from Airbus in what is the largest aircraft purchase in Philippine history.

The A321 joins the Airbus fleet at PAL that currently includes 22 320 aircraft flying on domestic and regional routes, with eight in service with affiliate carrier PAL Express. PAL also operates eight wide-body A330s on higher capacity routes across Asia and six A340-300s on its transpacific flights.

PAL plans to operate the twin-engine A321s primarily on select domestic, regional and international routes, confident that this aircraft type offers a competitive advantage owing to its seat capacity, cost efficiency and modern look.

China Bank offers a wide range of financial products and services through over 300 branches nationwide, which it plans to expand to 415 by 2014, and more than 500 strategically-located ATMs (including thrift bank subsidiary China Bank Savings).

The bank recently announced its first semester profits of P2.96 billion, up by 46 percent year-on-year, driven by improvements in core operations.