Cebu Pacific borrows to buy 12 new planes
THE Gokongwei-owned carrier, Cebu Pacific Air, plans to buy at least a dozen planes on borrowed money, the company said Friday.
Cebu Pacific plans to double its existing 12-plane fleet over the next two years, and is eyeing some $300 million from export-credit agencies that include the ECGD of United Kingdom, Euler Hermes AG of Germany and Coface of France.
Lance Y. Gokongwei, Cebu Pacific president and chief executive officer, told reporters the airline needed to raise $400 million to buy as many as fourteen Airbus A320s and A319s, which are 168-seater and 150-seater planes, respectively.
The airline plans to acquire the new planes starting this month until February 2007.
“We need planes now. We don’t have enough planes to serve capacity,” Gokongwei said.
The company expects two A320s to arrive in June.
At present, the airline uses a fleet of eleven DC 9-32 McDonnell Douglas aircrafts, each with a 110 to 115 seating capacity, as well as three Boeing 757s, having a seating capacity of 150 each.
Rising oil prices, which pose a threat to its profitability, however has plagued the airline. Gokongwei said that in a short period of time, the cost of fuel increased by as much as 70 percent.
“We had to adjust prices to compensate [the costs we incurred],” he said.
Recently, Cebu Pacific leased two Airbus 320s, which will feature the airline’s eagle logo with the addition of a bright yellow tail.
The new fleet will showcase various liveries including this corporate eagle design and the colorful Filipino motif that Cebu Pacific has come to be known for: City of Cebu, City of Davao, City of Manila, Centennial Plane and Tropical Plane Fun.
A brand new livery, which will exhibit Philippine attractions, will be added to the roster.
For this refleeting program, Cebu Pacific has signed up with General Electric for the purchase and maintenance of 31 aircraft engines. The airline has likewise entered into a joint venture with a unit of Singapore Airlines for maintenance.
???