Philippine Airlines, under the leadership of banking and tobacco magnate Lucio Tan, intends to acquire up to 20 Boeing 787-10 Dreamliner jets as the company upgrades its fleet in response to increased demand in air travel. The national airline has committed to purchasing at least 15 Dreamliners, with the option to buy another five, as stipulated in a preliminary agreement established in the United Kingdom.
A Historic Purchase for Philippine Airlines
The new order represents Philippine Airlines’ initial acquisition of Boeing aircraft in nearly 20 years, with delivery slated between 2031 and 2034. While the financial details of the agreement were not disclosed, the overall deal could potentially exceed $7.1 billion based on listed prices. A single Dreamliner typically ranges from $150 million to $200 million, even though its list price can reach a peak of $355 million.
The procurement follows Philippine Airlines’ successful fundraising of $300 million from its inaugural bond sale after emerging from Chapter 11 bankruptcy in the U.S. in December 2021. The generated funding will contribute to the rejuvenation and expansion of the 85-year-old airline’s fleet.
Lucio Tan III, president of PAL Holdings, the airline’s parent company, said, “This investment exemplifies our faith in the future of Philippine Airlines and the projected growth of air travel.” He added, “The Boeing 787-10 will augment our medium and longhaul fleet, enabling us to offer an enhanced travel experience for our passengers while improving operational efficiency.”
A Broader Strategy for Efficiency and Sustainability
The acquisition of the 787 Dreamliners is part of a larger plan to build a more efficient, sustainable, and competitive airline. The new aircraft will be powered by GE Aerospace’s GEnx-1B engines. Philippine Airlines, which boasts a fleet of over 80 aircraft, provides service to various destinations across the Philippines and 40 international routes in Asia, North America, Australia, and the Middle East.
Since 2024, the airline has been actively expanding and upgrading its fleet, following a record profit in 2023 spurred by a post-pandemic travel surge. In December, the airline also added five Airbus A320 aircraft to its fleet.
In addition to aviation, Tan’s business portfolio extends to banking, beer, spirits, tobacco, and real estate through his publicly traded LT Group. His net worth is estimated to be $2.9 billion.
This purchase also represents a significant win for Boeing, which has also recently secured orders for 100 aircraft from leasing company SMBC and 28 jets from Riyadh Air.
Questions & Answers
What is the significance of this purchase by Philippine Airlines?
This is the first time in nearly two decades that Philippine Airlines has placed an order for Boeing aircraft, marking a significant milestone in the company’s fleet upgrade strategy.
How will this acquisition benefit Philippine Airlines?
The acquisition of the Boeing 787-10 Dreamliner aircraft is expected to enhance operational efficiency and the overall travel experience for passengers, particularly for medium and long-haul flights.
What are Lucio Tan’s other business interests besides aviation?
Apart from aviation, Lucio Tan’s business interests span across various sectors, including banking, beer, spirits, tobacco, and real estate through his publicly listed LT Group.
