Tuesday, April 17 2:38 PM SGT
Philippine Airlines Plans To Lease 3 Boeing 737-300s
MANILA (Dow Jones)--Philippine Airlines Inc. (Q.PAI) said Tuesday it intends to lease three Boeing 737-300 aircraft for five years.
The country's flagship carrier said it will only use one of the aircraft for its operations and sub-lease the two others to Air Philippines Corp., a small domestic airline. The sub-lease will be guaranteed by a standby letter of credit.
Philippine Airlines said it will lease the aircraft it plans to use to Air Philippines later.
Philippine Airlines said it needs the plane for an increase in the number of flights to Taipei to nine times weekly from three times weekly.
Philippine Airlines said it also wants to take advantage of emerging opportunities in the regional charter market by offering extra-section flights and longer flights. The airline also wants to test new routes before opening regular scheduled operations to them.
The carrier also wants to begin a thrice weekly flight for the new Manila-Kaoshiung-Cebu route. It estimates the flight will add 1,254 hours per annum and an estimated $12,000 per roundtrip in margin before fleet costs.
Philippine Airlines said the aircraft lease has been approved by the Securities and Exchange Commission, the agency overseeing its financial rehabilitation.
The airline is in its third year of rehabilitation, which includes the restructuring of over $2 billion in debts, as well as fleet and manpower reduction.
Don't they have enough aircraft? I think they should go for the B 717 instead. Do they need the capacity of a B 737-300? Though it is slightly bigger than the B 717 only.