Cathay puts in US$7.5b order for Boeing jets
Cathay Pacific Airways, Asia's biggest international carrier, will order 21 Boeing 777X-9X jets valued at US$7.5 billion, betting on the newest twin-aisle offering from the US plane maker to modernise its fleet.
Cathay said it expected to take delivery of the new aircraft from 2021 to 2024 and would use them to serve destinations in North America and Europe.
Chief executive John Slosar has been pushing to retire the airline's older 747-400 fleet and replace it with more fuel-efficient and modern aircraft as it competes with Emirates for the lucrative business traveller market.
Emirates, the largest international carrier, last month ordered 150 777X planes worth US$76 billion, with an option to buy 50 more.
"It's the right move because when you run an airline, you want to make sure that you always have the best aircraft," Patrick Xu, a Hong Kong-based analyst at Barclays, said. "It's good news for Boeing as well. Cathay's order is a vote of confidence on the model."
The 777X boasts new General Electric engines and Boeing's largest-ever wing that comes with a fold to conserve airport space. The plane was unveiled last month at the Dubai Air Show.
It is slated to enter service by the end of the decade as the first twin-engine jet to haul the payload of a jumbo, which uses four engines.
"The Boeing aircraft will replenish and expand the fleet capacity," Cathay said.
At the end of June, Cathay had a fleet - excluding its Hong Kong Dragon Airlines and Air Hong Kong units - of 134 planes including 37 Airbus 330-300s and 32 B777-300ERs. It also had 81 planes on firm order, according to the company's interim report. The carrier last year agreed to convert 16 orders for the Airbus A350-900 model into A350-1000 wide-body jets and also added 10 of the plane's larger variant.
In June, Slosar said the company was assessing four-engine jetliners, the 747-8 and A380.
The latest order signalled that these two super-jumbos did not have a home at Cathay, as twin-engined aircraft like the 777 and A350 came with lower risk and volatility, Will Horton, a Hong Kong-based analyst at CAPA Centre for Aviation, said.
"The order shows Cathay does not want to fall behind on re-fleeting the way it did with 747s and A340s," Horton said. "The cost inefficiency of those aircraft has really pinched Cathay."