Cathay Pacific plans to buy new $36b aircraft

Cathay Pacific Announces Intention to Purchase 36 New Aircraft Valued at About Hk$75 Billion

Cathay Pacific Airways, coinciding with the airline’s announcement yesterday of an interim profit of $HK.6.84 billion (NZ$1.22 billion), also announced that it has entered into a letter of intent with the Airbus Company to buy 30 Airbus A350-900 aircraft. The airline has also expressed its intention to exercise existing purchase rights in respect of six Boeing 777-300ER aircraft.

The total value of the intended aircraft purchases at list price is about HK$75 billion. This is a sum in addition to the significant investment Cathay Pacific will make between now and 2013 that includes aircraft already on firm order, the new cargo terminal at Hong Kong International Airport and enhanced products in the cabin and on the ground.

The letter of intent with Airbus relates to the purchase of 30 Rolls-Royce-powered Airbus A350-900 aircraft. The all-new A350 XWB ("Extra Wide Body") will form the backbone of Cathay Pacific's future mid-size wide-body fleet, with the 30 new acquisitions being delivered between 2016 and 2019.

The A350-900 variant is capable of flying over 8,000 nautical miles non-stop, which will enable Cathay Pacific to operate the aircraft across its route network, including on non-stop flights to Europe and North America. Two new-generation Rolls-Royce Trent XWB engines will power the aircraft and the A350 XWB will enable Cathay Pacific to benefit from the lowest operating costs of any aircraft in its size category.

Cathay Pacific Chief Executive Tony Tyler said: "The A350-900 is a perfect fit for the development of our fleet - a mid-size long-haul aircraft that is fuel efficient, environmentally friendly, and provides the kind of capacity, range and operating economics that we need to complement and enhance our existing fleet.

“The delivery schedule fits our requirements very neatly. The 30 new aircraft will be deployed to replace older aircraft and grow our fleet to meet the challenges of the future.”

Mr Tyler added that the purchasing process has been a “rigorous and competitive one that has produced the best result for Cathay Pacific at the end of the day."

Separately, Cathay Pacific intends, subject to the satisfactory outcome of negotiations with the Boeing Company, to exercise existing purchase rights in respect of six General Electric-powered Boeing 777-300ER aircraft in addition to the 30 of this aircraft type the airline already has on firm order. Eighteen 777-300ERs have already been delivered and are in operation with the remaining 12 arriving by 2013.

Cathay Pacific will make the Boeing 777-300ER the backbone of its ultra-long-haul and long-haul fleet, chiefly serving destinations in North America and Europe with greatly improved operating economics compared to the older aircraft in its fleet.

The Hong Kong-based airline currently operates a fleet of 128 wide-body aircraft including 25 freighters.

The Seabury Group, an investment banking and advisory firm, advised Cathay Pacific on the aircraft order.

ENDS

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