Cathay Pacific casts eye on A350’s slimmer sibling, trips up Airbus’ widebody aircraft orders

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Cathay Pacific’s inaugural non-stop flight to Tel Aviv using the Airbus A350 aircraft on May 2, 2017. Photo: SCMP/Keith Chan

Published: 3:30pm, 14 Sep 2017Updated: 3:35pm, 14 Sep 2017

Airbus SE’s newest widebody jet lost more orders as Cathay Pacific Airways Ltd. switched a contract for six A350-1000s to the smaller -900 variant and deferred delivery of five more by a year.

The model switch, announced by Asia’s biggest international carrier on Wednesday, follows a decision last week at United Airlines to swap on order for 35 A350-1000s to 45 -900s, a move that increased the overall value of the deal but took a large bite out of the bigger jet’s backlog.

The Cathay decision narrows the order book for the 366-seat A350-1000 to 171 aircraft, based on the planemaker’s latest data, while lifting the backlog for the 325-berth -900 to 679 planes. The larger jetliner is falling out of favour as carriers around the world rein in capacity expansion to ease pressure on fares, while United Chief Financial Officer Andrew Levy said the -1000 is also too close in size to the largest Boeing Co. 777 model.

An undated Airbus computer-generated image showing an Airbus A350 XWB mid-sized wide body aircraft with Cathay Pacific Airways colours. Cathay announced on 4 August 2010 that it had selected the all-new A350 XWB to form the backbone of its future mid-size widebody fleet, following the signature of a Letter of Intent (LOI) with Airbus for the order of 30 aircraft. Photo: EPA

For Cathay, which is cutting costs to help revive earnings, the switch could save about $288 million, based on list prices.

The order revisions suggest that the sweet spot for twin-engined widebody orders remains in the 250-350 seat range at a time of excess capacity and with the low oil price making it possible for carriers to put off fleet renewal and upgrades, aerospace consultant Richard Aboulafia said.

Cathay Pacific didn’t give a reason for the A350 flip, announced as part of an order for 32 A321neo planes, saying only that the move would save it US$288 million. The Hong Kong carrier has altered course on the A350 before, having ordered 30 -900s in 2010 before two years later switching 16 to -1000s and placing a separate US$3.3 billion order for 10 more of the larger aircraft.

All told, Cathay is now due to take 26 -900s -- of which 16 have been handed over -- and 20 -1000s. The five deferred -1000s will be pushed back by a year to arrive from 2021.