Philippine Airlines (PAL) has signed a memorandum of understanding with Airbus to acquire six A350-900s to support an ambitious five-year expansion plan, starting with the launch of direct service between Manila and New York in two years. The $1.8 billion deal, announced here yesterday, includes another six purchase options and calls for first delivery in 2018. PAL now flies to New York from Manila via Vancouver. Other service would connect Manila with London and other points in continental Europe.

PAL plans to replace some of its 254-seat A340s with the new jets, which it expects to equip with roughly 300 seats in a three-class layout. Along with year-round flights to New York, plans also call for more direct service from Manila to Los Angeles, San Francisco and Vancouver. Next month PAL plans to start A340 service from Cebu to Los Angeles and would use the A350 to upgrade that route, said Philippine Airlines president and COO Jaime Bautista. It would then likely add other destinations in the U.S. from Cebu, he added, and consider nonstop service from Manila to Toronto once it takes delivery of its first airplanes.

“After a thorough commercial and technical evaluation, the A350 came out on top in meeting our demanding requirements,” said Bautista. “We made the decision because we believe this aircraft will technically and commercially result in the viable operation of the airline.”

For Airbus, the deal represents a big win over Boeing, which had offered 787 Dreamliners. Along with its six A340s, PAL operates eight Boeing 777-300ERs. Airbus has now recorded 777 firm orders for the A350 XWB from 41 customers.

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