Hong Kong 2016: PAL disagrees with airline-lessor business model
“We have subleased five Airbus A320 aircraft to manage our capacity, but we are not in the business of leasing,” said Philippine Airlines’ senior financial adviser Ian Reid at Airfinance Journal's Airline Briefing & Networking Day in Hong Kong.
He adds: “Airlines don't have enough capital for in their own business to set up a leasing platform.”
Philippine Airlines fleet totals 79 aircraft and it also holds order for 34 units.
“We have a 50% backlog compared with our existing fleet. Personally, I am happy with that size because when orders are too large, you have to start your own leasing company,” he says.
“Look at the history of airline-lessors. Singapore Airlines set up SALE. But these were guys who paid cash for all their aircraft... Was it sustainable? They've sold out now.
“There were lots of lessors, such as Ansett and AWAS, that were originally owned by airlines but they're not any more too. If you look over the years it's not a long-term sustainable model.”
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