Philippine Airlines Signs Airbus A350 Order

Philippine Airlines ordered 6 Airbus A350-900s worth about USD$1.8 billion at list prices as it seeks to fly non-stop flights to the US.

PAL will start taking delivery of the A350s in two years, Jamie Bautista, PAL's president, and Fabrice Bregier, Airbus president, told a news conference at the Singapore Airshow.

The airline is taking on more aircraft to cater to increased demand from millions of Filipinos working overseas, just as rival Cebu Pacific expands its local routes.

"The market is growing, the economy in the Philippines is improving, so that will allow more Filipinos to afford travel," said Bautista.

PAL ordered six A350s, with another six options, Bautista said.

PAL officials said they would consider financing the aircraft through sale and leaseback options and commercial debt.

The A350s will not only allow PAL to fly non-stop to US cities, but may also opens the door for direct routes to Europe.

"With these airplanes, we can increase our presence - more flights to Los Angeles, San Francisco, more fights to Vancouver," said Bautista.

PAL's fleet acquisition underscores the buoyant outlook for the Philippines economy as it bucks a global slowdown, however there are concerns that global demand for new airliners is slowing after a record wave of orders.

Brendan Sobie, analyst at consultancy CAPA said PAL's expansion was a smart move as the carrier doesn't face a lot of competition on US routes.

PAL is rebuilding its fleet cautiously, unlike other larger airlines in Southeast Asia, which had placed orders for hundreds of aircraft in recent years, he said.

The Philippine aviation industry received a boost in 2014 after the US Federal Aviation Administration upgraded the country's civil aviation status to let its airlines operate new direct flights to the US.