Cathay Pacific 777x

admin 4/7/2022 07/04/22

The city’s de facto flag carrier was one of the first airlines to order the new long-haul jets, signing up for 21 of the planes in a multibillion-dollar deal
But with a global pandemic collapsing travel demand and a bounceback in the distance, the airline is focused on reducing capital expenditure

Cathay Pacific is mulling adjustments to its HK$58 billion (US$7.4 billion) order for Boeing’s newest widebody jet, the 777X, including lengthy delivery deferrals and switching to the less expensive 787 Dreamliner, sources say. This is the flagship of Cathay Pacific’s long-haul fleet. With its super-wide cabins and high ceilings, it enhances passengers’ travel comfort. We aim to give you the best experience possible – but also wish to respect your privacy. By clicking “I accept”, you agree to allow us to. The 777X is Boeing’s newest family of wide-body airplanes that builds on the 777-300ER that is already deployed extensively around the Cathay Pacific network. The 777-9X is a larger twin-engine jet that will have both a larger payload than other twin-engine aircraft and reduced fuel consumption and lower operating costs.

Book flights to Hong Kong, Manila, Bangkok, Cebu, Vancouver and other destinations with Cathay Pacific. You can also manage bookings and view your frequent flyer account online.
One way or the other, though, you’ll see the 777X in service soon. According to list prices, the 777X goes for up to $442.2 million a unit, although airlines almost always get discounts. According to Boeing and the airlines, customers include Lufthansa, Etihad, Qatar Airways, Emirates, Singapore Airlines, ANA, Cathay Pacific and British Airways.

Cathay Pacific is mulling adjustments to its HK$58 billion (US$7.4 billion) order for Boeing's newest widebody jet, the 777X, including lengthy delivery deferrals and switching to the less expensive 787 Dreamliner, sources say.

The moves would be consistent with a desire to reduce capital expenditure amid the ongoing Covid-19 crisis, with new plane purchases by far the biggest cost for Hong Kong's de facto flag carrier.

But while they are studying shifting the 777X order to 787-10s, the airline has yet to approach Boeing about a potential switch, according to two people familiar with the matter.

Airlines around the world grappling with the near-complete collapse of travel demand and major questions about the pace of recovery have been increasingly delaying and cancelling deliveries.

'We do not comment on speculation,' a Cathay Pacific spokeswoman said when asked about the potential move.

A Boeing spokesman said: 'Cathay is a valued and long-standing partner and we will work to continue supporting their fleet and operational requirements. Conversations with our customers are private and as a matter of rule we don't comment on speculation.'

Cathay Pacific 777x Business Class

One of the first customers to sign up for the ultra-long range version of the 777X, which seats up to 400 people, Cathay ordered 21 of the planes in late 2013. Priced at US$377.2 million per plane, before customer discounts, they were to be delivered between 2021 and 2024.

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Today, the same order would cost US$9.3 billion or US$442.2 million each. A 787-10, in comparison, costs US$338.4 million.

Boeing has 309 orders locked in for the 777X family from several airlines including Emirates, Qatar Airways and Lufthansa. However, the 777X has been dogged by production and testing delays, and lockdowns from Covid-19 have affected Boeing's US factories.

Richard Aboulafia, an analyst at aviation consulting firm Teal Group, said: 'A combination of order conversions and delivery deferrals is the likeliest outcome.'

'There aren't that many orders for the 777X, and there aren't that many customers. Losing Cathay would be a blow, but given HK's pre-Covid traffic issues, Boeing had probably prepared for this contingency,' Aboulafia said.

Cathay and its home airport were some of the first and worst to be hit by the pandemic. As of April, the airline's passenger traffic volumes have collapsed to less than 1 per cent of what was once 100,000 passengers a day.

Cathay Pacific records HK$2 billion loss in February as pandemic limits travel

Given the slowdown in international travel and warnings that a fully-fledged recovery might not come until 2023, Cathay's need for so many planes enabled for long hauls is likely to be reduced.

Cathay Pacific Flight Status

By the start of 2025, however, Hong Kong's airport expansion will be complete and Cathay will need to begin renewing its regional aircraft fleet, which includes more than 50 Airbus A330s and 12 high-density Boeing 777s, consistent with a role the 787 could take on.

Cathay has a fleet of 236 total aircraft and is also planning to receive 32 Airbus A321neos and 12 A350s in coming years.

'I am in the camp of the bathtub view, where a rebound to last year's levels will not occur before 2023-2024 ' and this assumes we all are able to manage the further spread of the virus,' said Peter Huijbers, of consultancy PH Aviation.

He added: 'In the case of Cathay, the current fleet of environmental friendly A350s as well as the B777 is sufficient to cover that demand for the next few years, and (they can) perhaps re-evaluate in three to five years.'

Asia Miles

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Emirates has the largest order for 777Xs, with 115, according to Boeing's website, though that is down from a peak of 150. The Middle East carrier traded in 30 orders for an equivalent number of 787s last year.

There was recent speculation that Cathay might cancel its order altogether, but that would risk losing significant payments made up front through pre-delivery payments for each aircraft.

With Cathay's first 777-9 delivery about 18 months from delivery, well-informed industry sources said Cathay could have paid for up to 50 per cent of that aircraft already.

777x Orders

'Cathay will do whatever it can to preserve liquidity, which includes delaying or even cancelling aircraft orders,' Morningstar equities analyst Ivan Su said.

Cathay Pacific Online Booking

Last month, Cathay Pacific agreed to a deal with BOC Aviation to sell and lease back six Boeing 777-300ER planes, aged about five years, for a further 15 years, sources said, raising US$703.8 million from the transaction.

Boeing has also been grappling with hundreds of cancellations for its much-troubled 737 MAX jet in recent months after twin fatal crashes that made global headlines.