Philippine Airlines (PAL) has extended its maintenance outsourcing agreement with Airbus to cover all 63 of its European-built aircraft. The expansion marks a significant growth in the partnership that began eight years ago.
The Philippine flag carrier signed the extended Flight Hour Services contract at a ceremony in Singapore, bringing its entire Airbus fleet under the manufacturer’s “Power-by-the-Hour” maintenance model.
The agreement encompasses nine A350-1000 ultra-long-haul aircraft, 11 A330s, and 43 aircraft from the A320 family.
Under the arrangement, Airbus will handle component repairs, provide engineering services, and maintain a permanent inventory of spare parts at PAL’s Manila hub.
The outsourcing model allows airlines to pay maintenance costs based on actual flight hours rather than purchasing components outright, helping manage cash flow and reduce inventory requirements.
Building on existing relationship
The partnership traces back to 2018, when PAL first signed up for Airbus maintenance support on its A350-900 fleet. The relationship expanded in 2022 to include the carrier’s narrowbody and A330 operations, reflecting what Airbus describes as growing confidence in integrated fleet support.
Anand Stanley, President of Airbus Asia-Pacific, emphasized the partnership’s evolution in his remarks about the extension.
“This demonstrates the strength of our long-standing partnership and our shared commitment to operational excellence,” Stanley said, highlighting how the arrangement helps PAL “optimize fleet performance while benefiting from predictable, long-term maintenance costs.”
The expanded deal comes as PAL works to streamline operations during its post-pandemic recovery. Like many carriers, the Philippine-based airline has focused on reducing operational complexity while maintaining fleet reliability.
Industry trend
The agreement reflects a broader industry shift toward manufacturer-provided maintenance services, particularly for newer aircraft types where original equipment manufacturers can leverage data analytics and global parts networks. Airbus positions its Flight Hour Services as the leading provider of component support for A330 and A350 fleets worldwide.
For airlines, such arrangements offer predictable maintenance costs and access to manufacturer expertise, though they also create long-term dependencies on original equipment suppliers. The trade-off has generally favored outsourcing as aircraft become more complex and airlines seek to focus resources on their core business of flying passengers.
PAL’s decision to bring its entire Airbus fleet under the unified maintenance arrangement suggests the carrier has found value in the approach across different aircraft types and route structures. The move also reflects the maturation of manufacturer-provided services that were once viewed skeptically by airlines concerned about vendor lock-in.
The extended contract reinforces Airbus’s position in the Philippine market, where it competes with Boeing for both new aircraft sales and aftermarket services revenue that often exceeds the original aircraft purchase price over a plane’s operational lifetime.