First in Southeast Asia: Cebu Air taps sustainability-linked loan
Cebu Pacific sealed a sustainability-linked loan, the first one by a low-cost carrier in Southeast Asia, to achieve its goal of transitioning to a fleet that emits less carbon.
In a statement on Wednesday, the Gokongwei-led airline said the financing facility was arranged by Crédit Agricole CIB, who also served as the sustainability advisor for this transaction.
Asked how much the loan is, the budget carrier told the Inquirer the terms and amount of the loan were confidential.
“Cebu Pacific’s first sustainability-linked aircraft financing is a milestone in our decarbonization journey, as the transaction supports the core element of our program—the modernization of our fleet towards more advanced and fuel-efficient aircraft,” Cebu Pacific financial officer Mark Cezar said.
The loan financed the acquisition of a brand-new Airbus A321neo (new engine option), which Cebu Pacific received last month.
A neo aircraft is deemed fuel-efficient as it burns 15 percent less fuel per flight.
Cebu Pacific intends to have an all-neo fleet by 2028 as part of its decarbonization goals.
“With this deal, we want to emphasize that access to financing for sustainability initiatives is available and that Cebu Pacific is taking full advantage of such opportunities in our pursuit of being the decarbonization leader in the region,” Cezar added.
Refleeting program
The low-cost airline currently operates 10 A330s, 40 A320s, 25 A321s and 15 ATR turboprop aircraft.
Last year, it finalized a P1.4-trillion order of up to 152 jets with European aircraft manufacturer Airbus. The airline will start taking delivery of the units by 2029.
The additional aircraft will allow the low-cost airline to have a bigger foothold outside Metro Manila, including Davao, Cebu and Clark.
The Gokongwei-led carrier also purchased Zobel family-led boutique airline AirSwift Transport Inc. last year for P1.75 billion last, allowing it to operate direct flights to El Nido, Palawan.
