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MANILA, Philippines – Philippine Airlines Incorporated (PAL) is selling two Airbus aircraft to Las Vegas-based Allegiant Air, as announced Wednesday, February 25.
Only on Monday, February 23, PAL’s rival, Cebu Air Incorporated (Cebu Pacific), said it is selling 6 aircraft to the same Las Vegas-based, low cost carrier.
In a statement, Nasdaq-listed Allegiant Travel Company announced it has entered into an agreement to purchase two additional Airbus A320 aircraft from PAL, set to be included in the Allegiant operating fleet toward the end of 2015.
Allegiant Air continues to be “successful in finding high quality, used aircraft to support our future growth” and the aircraft from PAL have 177 seats in the same configuration as the airline’s current A320s, said Jude Bricker, senior vice president of planning of Allegiant Travel.
Bricker said Allegiant Air is buying the PAL aircraft in cash, citing its strong balance sheet allowing it to both find aircraft to support future growth and return cash to shareholders through its previously announced recurring dividend and continuation of its existing share repurchase program.
Allegiant Air’s capital expenditures for 2015 amount to approximately $230 million, including the acquisition of two Airbus A319 set to be delivered this year.
PAL delayed the complete delivery of close to 40 aircraft by 4 years after the Lucio Tan Group successfully took back full ownership of the airline from San Miguel Corporation (SMC) for a total consideration of $1.3 billion. (READ: Clipping PAL’s ‘too many wings’)
The PAL Group, including PAL Express, currently operates 73 aircraft after it sold 20 ageing aircraft, including its Boeing 747 fleet.
Such deferments come at no additional cost to the airline, stating that PAL has agreed “in principle” with Airbus, the manufacturer of the aircraft, PAL president and chief operating officer Jaime Bautista previously said.
The airline executive also reiterated that the LT Group would continue to look for a foreign, strategic partner within a 3-year timeframe.
The strategic partner could take as high as a 40% stake in the airline under Philippine laws to help finance the acquisition of additional aircraft for long-haul destinations, Bautista said. – Rappler.com