MANILA, Philippines - Budget airline Cebu Air Inc. (Cebu Pacific) is selling six aircraft to Las Vegas-based low cost carrier Allegiant Air after a failed transaction more than two years ago.
Cebu Pacific president and chief executive officer Lance Gokongwei said the airline has signed a forward sale agreement with NASDAQ-listed Allegiant Travel Company involving the sale of six Airbus A319 aircraft that is being replaced by A321 neo (new engine option) as part of its fleet renewal program.
“This agreement is in line with Cebu Pacific’s efforts to continuously improve operational efficiency by replacing and upgrading our fleet with the larger, more fuel efficient, and longer range A321neo aircraft,” Gokongwei said.
The agreement covers the sale of six A319 to be delivered to Allegiant starting this year up to next year. Details of the transaction including the amount involved were not disclosed.
Data from Airbus showed that an A319 has an average list price of $85.8 million while an A321 has an average list price of $110.1 million.
Cebu Pacific announced in July 2012 that it entered into a deal with the Allegiant Travel for the sale of its entire fleet of 10 Airbus A319. Under the deal, the 10 aircraft were supposed to be delivered over a 15-month period starting March 2013.
However, Cebu Pacific announced in January 2013 that talks with the Las Vegas-based company were terminated after both parties failed to reach an agreement on certain terms of the transaction.
Cebu Pacific said the acquisition of brand new A321neo would also allow the low cost carrier access new markets in the Indian subcontinent and Australia including Perth, Brisbane, and Adelaide.
The new aircraft would be equipped with the Pratt and Whitney PurePower Geared Turbofan™ engine with a flying radius of over six hours and could be configured to have up to 240 seats.
The A321neo is the largest model in the A320neo series, which incorporates new engines and large wing tip devices called Sharklets. The advances will deliver fuel savings of 20 percent and additional payload or range capability.