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PAL, Citi, and UKEF Finalize Financing for Rolls-Royce Trent XWB-97 Engine

PAL, Citi, and UKEF Finalize Financing for Rolls-Royce Trent XWB-97 Engine
Philippine Airlines (PAL), in collaboration with Citi and UK Export Finance (UKEF), has successfully secured a new 12-year loan backed by UKEF to finance the acquisition of a Rolls-Royce Trent XWB-97 engine. Citi acted as the sole lead arranger and facility agent for the transaction, marking PAL’s first export credit agency (ECA) financing in over a decade. Citi also played a pivotal role in the airline’s previous ECA-backed financing, underscoring the enduring partnership between the two institutions.
Supporting Fleet Modernization and Enhanced Efficiency
This financing arrangement is a key component of PAL’s broader fleet modernization strategy, which includes the delivery of nine Airbus A350-1000 aircraft. In addition, the airline plans to receive 13 Airbus A321neo aircraft starting in 2026 and is currently refurbishing 18 A321ceo aircraft with upgraded Business and Economy Class cabins, the first of which was completed in September 2025. The Rolls-Royce Trent XWB-97 engine, intended to power the new A350-1000s, boasts a 15 percent improvement in fuel efficiency and reduced noise levels compared to earlier Trent models.
Rolls-Royce is prioritizing operational execution and durability enhancements across its Trent engine family to ensure reliability and performance. The Trent XWB-97 has demonstrated promising results in dust-ingestion testing, exceeding expectations. These upgrades are critical as the company prepares for the introduction of new engine products, aiming to maintain its competitive edge in the market.
Competitive Dynamics and Industry Perspectives
Industry analysts observe that competitors such as Pratt & Whitney are also advancing durability improvements for their GTF-family engines, with certification secured and roll-out scheduled from 2026. The market’s reception to these developments will likely depend on the effectiveness of the durability enhancements and how Rolls-Royce positions itself relative to its rivals.
Manish Bajaj, head of corporate banking at Citi Philippines, emphasized the significance of the transaction, stating, “Citi is proud to support Philippine Airlines through this landmark UKEF-backed financing transaction, which demonstrates the strength of PAL’s long-term growth strategy and access to global funding markets. The transaction highlights Citi’s commitment to delivering innovative and strategic financing solutions for our clients, while reinforcing our partnership with the Philippines’ flag carrier through its next phase of growth and expansion.”
As PAL progresses with its fleet renewal and Rolls-Royce advances critical engine upgrades, this collaboration highlights the airline’s dedication to operational excellence amid an evolving and competitive global aviation landscape.

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