Philippine Airlines, a Southeast Asian carrier also known as PAL, is preparing a potential return to Boeing NYSE:BA, the U.S. aircraft maker, with its first direct Boeing order since 2007 possibly announced as soon as this month. People familiar with the matter said PAL is leaning toward splitting a multibillion-dollar widebody aircraft order between Boeing and Airbus, the European aircraft maker, with the agreement currently expected to include about 10 Boeing 787s and 10 Airbus A350s. The details are still being finalized, and the final order mix may still change.
The planned announcement could come at the UK's Farnborough International Airshow, which starts July 20, while representatives for PAL, Boeing and Airbus declined to comment. If completed, the order would represent a meaningful win for Boeing because it would restore a direct-purchase relationship with PAL after nearly two decades and help keep American-made jets present in a Philippine market where Airbus currently dominates. Cirium data showed that less than 10% of commercial aircraft used by Philippine carriers were built by Boeing.
For investors, the possible order matters because it could support PAL's future growth plans, which are being helped by a $15 billion airport project near Manila. PAL ended last year with 82 aircraft, including 10 Boeing 777s and four A350s for long-haul routes, plus 11 A330s for Asia-Pacific flights. The airline also signed a June agreement to join the Oneworld global airline alliance, whose members include American Airlines Group NASDAQ:AAL, a U.S. airline operator, and IAG, the parent company of British Airways, adding another potential signal that PAL is positioning for broader international growth.