Cebu Pacific Air has chosen to purchase 152 single-aisle jets from Airbus SE (OTC:EADSY) in a preliminary agreement worth $24 billion.
What Happened: The deal, which is the largest jet purchase in the history of the Philippines, will see Cebu Pacific Air acquiring 102 A321neo jets with an option for an additional 50 planes, Bloomberg reported on Tuesday.
"When finalized, the deal will be a significant milestone for the local airline industry," said Mike Szucs, Chief Executive Officer of Cebu Pacific Air.
The Philippines' largest airline had previously considered both Airbus and Boeing Co. (NYSE:BA) for its next major order. However, the U.S. plane manufacturer failed to secure the deal.
Cebu Pacific Air currently operates a fleet of approximately 85 Airbus and some smaller ATR turboprop aircraft, with an existing order book of over 30 planes from the European manufacturer.
Why It Matters: This development comes at a time when Boeing is grappling with safety and regulatory challenges. Just a day before the Cebu Pacific Air deal, Boeing announced the acquisition of Spirit AeroSystems Holdings Inc for $4.7 billion in an all-stock deal to address these issues.
Meanwhile, Airbus has been making strategic moves to strengthen its position in the market. The European manufacturer signed a binding term sheet with Spirit AeroSystems for a potential acquisition of key production activities, which included a compensation payment of $559 million to Airbus.
Furthermore, amid Boeing's production delays, Airbus had initiated talks to sell over 100 widebody jets to China in June. This move highlighted the growing contrast between Airbus and Boeing in China's aviation market.
Price Action: On Tuesday, Airbus was trading 2.86% higher at $35.23 during the pre-market while Boeing was trading 0.32% lower at $186.32 at the same time, according to Benzinga Pro.
Photo via Company
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari