Cebu Pacific scraps deal to sell 10 planes
MANILA, Philippines - Budget carrier Cebu Pacific has scrapped a proposed deal to sell 10 Airbus A319 aircraft to US-based low-cost passenger airline operator Allegiant Travel Company.
In a disclosure to the stock exchange, Cebu Pacific said the deal was terminated after both parties failed to finalize the certain terms of the transaction.
"It is unfortunate that we were not able to finalize the sale agreement. We have been unable to agree on certain conditions that would have made the transaction workable, both operationally and financially,” said Lance Y. Gokongwei, President and CEO of Cebu Pacific.
Despite the failure to sell the A319 planes, Gokongwei is still optimistic about the airline's prospects.
"Without the A319 sale, our current fleet expansion plan, which includes delivery of 8 Airbus A320 aircraft over the next 2 years will enable us to grow seat capacity by an average of 10-15 percent per year, which is in line with our demand outlook for air travel in the Philippines, allowing Cebu Pacific the flexibility to accommodate the growing demand for air travel in the Philippines," he said.
Allegiant last week said it was scrapping the deal with Cebu Pacific as it failed to come to terms with some economic provisions of the transaction.
"Our disciplined approach in asset purchases is a core competency that we will not compromise," said Allegiant President Andrew C. Levy.
Cebu Pacific and Allegiant had disclosed the proposed deal last July 31. The Gokongwei-led airline said it will sell its entire fleet of 10 Airbus A319 aircraft, which it says are its oldest and smallest planes. The delivery of the aircraft was supposed to start March 2013.