PAL to rent aircraft from European carrier

MANILA, Philippines — Flag carrier Philippine Airlines (PAL) is looking to enter into a lease agreement with a European operator to boost its fleet in the heat of supply chain disruptions that are causing delays in aircraft deliveries.

The STAR learned from industry sources that PAL is eyeing a wet lease arrangement with a reputable carrier from Europe to prepare its fleet for the expected demand bump starting July.

The wet lease to be signed with a European airline will also provide PAL the network capacity to serve passengers even as the aviation industry grapples with manufacturing and repair delays.

To date, PAL has grounded five Airbus A320neos awaiting the maintenance of their jet engines with aviation supplier Pratt & Whitney. In 2023 Pratt & Whitney issued a recall for engines that it made for A320neos, citing a manufacturing defect that has to be fixed.

Since then, hundreds of airlines worldwide have grounded their jets to get the engines repaired. Manufacturers of commercial aircraft like Airbus and Boeing are also struggling to deliver their backlog of commitments dating back to the COVID-19 pandemic.

The situation has driven low-cost carrier Cebu Pacific to sign a damp lease for two aircraft with Bulgaria Air, assigning the jets for Manila services to Cebu and Davao.

Although rare in the Philippines, airlines turn to damp and wet leasing to boost their fleet during demand spikes, such as PAL, which is expecting a booking surge between July and September.

Under a wet lease, the lessor extends a complete package of flying services, from the aircraft and crew, to the insurance and maintenance, while the lessee pays for the operational costs like hours flown and landing fees.

PAL president and COO Stanley Ng expects flight demand to go up beginning July when students go on vacation until August.

However, he noted that this trend could change in the future once the academic calendar is reverted to the June to April cycle.

“I expect July and August to be our strongest months. Last year I think that was the strongest, the third quarter, so this year might be the same trend,” Ng said.

The flag carrier owned by taipan Lucio Tan will receive nine A350-1000s between 2025 and 2027, as well as 13 A321neos between 2026 and 2029.

PAL wants to stay ahead of the curve for air travel, and plans to retain its competitive advantage of being the lone domestic carrier flying across the Pacific.