Hong Kong’s Greater Bay Airlines orders 15 Boeing aircraft, eyes 5 more, to hugely expand fleet of 3 leased planes ahead of launch of new and long-haul routes, business-class seats
- Agreement, estimated to be worth billions of Hong Kong dollars, aims to support airline’s international long-haul ambitions
- Stanley Deal, president and CEO of Boeing Commercial Airplanes, says US aircraft giant fought off fierce competition from its European rival Airbus to win order
The agreement, estimated to be worth billions of Hong Kong dollars and signed on Friday, aims to support the airline’s international long-haul ambitions in addition to its focus on shorter flights between Asia-Pacific and mainland China. The new, spacious 737-9 planes, which can carry 200 passengers, will allow the company to offer business-class services.
The carrier said the planes, which has a range of 6,110km while reducing fuel use and carbon emissions by 20 per cent, would form the backbone of its future fleet, as it sought to expand from its current three Boeing 737-800 jets. The first new aircraft will be delivered next year, with the rest by 2027.
“The 737-9 will allow GBA to open new routes from Hong Kong with unmatched economics. The new order will bring fantastic growth opportunities,” chairman Bill Wong Cho-bau said.
At roughly US$52 million each, the order for the 15 737-9 MAX jets is estimated to be worth US$780 million to US$800 million, according to aviation expert David Yu.
The airline made its debut flight to Bangkok in July last year and has since expanded to Taipei, Seoul and Tokyo, with plans to start services to Beijing and Shanghai. Next month it will add Osaka to its network, while Manila and Ho Chi Minh will follow soon.
Stanley Deal, president and CEO of Boeing Commercial Airplanes, called the order the perfect choice for the carrier, saying the aircraft had “unmatched efficiency, range and reliability”.
He added: “Thank you for the confidence in our product.”
Deal told the Post after the signing ceremony the American aircraft giant fought off fierce competition from its European rival Airbus to win the order.
Rival Airbus dominates the city’s market and won a string of orders on the mainland, which has also certified its home-grown narrow-body passenger aircraft named C919 designed to compete with Boeing’s 737 and Airbus’ A320.
“We love the competition,” he said. “Candidly, competition makes us great. It’s terrific to see the C919 now certified, and we compete every day against Airbus.”
Greater Bay Airlines also signed a letter of intent to buy five 787 Dreamliners, which are often used for long-haul international routes. The carrier currently leases three Boeing 737-800s from mainland’s ICBC Leasing.
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The mainland was the first jurisdiction to stop using the 737 MAX aircraft in March 2019 after 346 people died in the crashes that occurred less than five months apart. The narrow-body passenger jet was later grounded worldwide.
Countries including the United States have been resuming flights of the aircraft since late 2020, making the mainland the last major aviation market to allow the Boeing passenger jet to return to service after the nation’s civil aviation authority issued an airworthiness directive.
Transport chief Lam on Friday expressed confidence in the safety of the 737 MAX, saying the Civil Aviation Authority had completed its investigation when Hong Kong lifted its ban in January.
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Boeing is facing strong competition from rival Airbus, which has been winning a string of orders on the mainland and is also dominant in Hong Kong. Xiamen Airlines switched its entire fleet from Boeing to Airbus after ordering 40 of the A320neo narrow-body aircraft last year.
The mainland last year also certified its home-grown narrow-body C919, designed to compete with Boeing’s 737 and Airbus’ A320. The aircraft is made by the state-owned Commercial Aircraft Corporation of China. The first model was delivered to China Eastern Airlines last December.
Wong, the tycoon behind Shenzhen-based Donghai Airlines, has pledged to invest HK$2 billion (US$258 million) in the new company, which is stepping into a market previously served by Cathay Dragon before the 35-year-old regional carrier shut down in 2020 amid the coronavirus pandemic.
But Greater Bay Airlines has faced multiple challenges in preparing its launch, including a lengthy bid to secure licences from the government. The airline also needs to overcome its lack of manpower, such as pilots and aircrew, to increase flight capacity.
Hong Kong’s Air Transport Licensing Authority last year awarded the carrier a five-year permit to operate commercial flights on 104 routes, including 48 to the mainland, as well as to Taiwan, Japan, South Korea and other destinations in the Asia-Pacific region.
Aviation expert Yu said safety issues with the 737 MAX seemed to have been fixed and the Hong Kong-based carrier needed narrow-bodied planes for its regional routes.
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On whether the newcomer would be a threat to Cathay Pacific, Yu said it would “definitely be a thorn” in its side.
“What they’re going to do is slowly affect the pricing, because as a low-cost carrier [its prices will] be lower than Cathay, and then Cathay cannot be charging as high of a price,” said Yu, the chairman of Asia Aviation Valuation Advisors.
Yu added that Greater Bay Airlines would be able to ensure its pilots had a smooth transition to the newly ordered Boeing aircraft as the planes were from the same family as those in the carrier’s current three-strong fleet. Parts would also be more easily transferable between the planes given their similarities, he said.
