Air Philippines allots $250m for Capex

Forsees 18 A320's by 2012

October 1, 2010

Airphil Express, Philippine Airlines’ low cost subsidiary, is allotting $250 million for fleet expansion in the next two years as it plans to add 18 Airbus 320 until 2012, The company said Thursday.

Air Philippines CEO Cesar Chiong said the company is adding more planes to open more domestic and international routes to enable it to compete in the country's competitive aviation industry.

“There is an investment of $250 million for fleet expansion. It will be funded partly by internal funds and the rest from the capital market,” Ceasar Chiong, AirPhil’s executive vice-president and chief operating officer said wednesday night following the arrival of its brand new A320, the third on its fleet.

The airline did not provide details of the capex allotment this year but Chiong said $50 million of the $250-million amount has been set aside as prepayment for the six A320s that the airline is taking delivery this year.

Three of the six A320s are already delivered while the other three is scheduled for delivery within the next 60 days. The airline is expected to have six Airbus aircraft by the end of the year.

Chiong said the budget carrier had already committed to lease nine A320s, but that it was still discussing the terms for the other nine.

“We are still in discussions with the supplier for the other nine" says Chiong.

“We can either do [acquire] it by procurement or by leasing,” Chiong added.

He said the carrier was waiting for three more A320s in the last quarter, to add to its fleet of eight turboprops and three A320s. Six more Airbuses would be added in 2011 and another six in 2012, he said.

"We're looking at destinations like the Republic of Korea from Cebu, Bangkok and maybe Hong Kong," Chiong adds to its future international routes.

As for its domestic destination, the company said that it will add to its network Baguio, Vigan, Marinduque, Tacloban, Dipolog, Pagadian, and Ozamiz.

Air Philippines now operates 3 Airbus 320's, and 8 Bombardier Q400 propeller planes used to fly on domestic routes. The new plane will be utilized for its first international flight to Singapore later this month.