Manila-based Cebu Pacific, one of the Philippines’ top airlines, has signed a binding memorandum of understanding (MoU) with Europe’s Airbus for the purchase of up to 152 A321neo aircraft – a deal that, based on list prices, would be worth in the region of US$24 billion, the largest aircraft order in Philippine aviation history.

The MoU covers firm orders for up to 102 A321neo, plus 50 A320neo Family purchase rights. Cebu Pacific has also selected Pratt & Whitney GTF engines to power the future aircraft.

The purchase agreement to finalize this transaction is expected to be completed in the third quarter of the year.

In its most recent report on passenger traffic, International Air Transport Association data for February 2024 showed global passenger demand recorded a rise of 21.5%, with Asia-Pacific airlines seeing a 53.2% year-on-year increase in demand.

Capacity in Asia also increased 52.1% year-on-year, and the load factor rose to 84.9% (+0.6ppt, compared with February 2023), the highest among all regions.

The significant order will also be a blow to Airbus’ rival Boeing. The US firm is facing production setbacks following accidents involving its B737 Max 8 aircraft, which have also been compounded by a door detachment incident on an Alaska Airlines Flight and supply-chain issues.

“The order is designed to provide Cebu Pacific with maximum flexibility to adapt fleet growth to market conditions, with the ability to switch between the A321neo and A320neo,” says Michael Szucs, the Philippine airline’s CEO. “When finalized, the deal will be a significant milestone for the local airline industry and a testament to our commitment to support the Philippine growth story.”