Cathay in talks to expand fleet

CATHAY PACIFIC, the Hong Kong-based airline, is in early talks with Airbus and Boeing, the plane manufacturers, about spending up to E2bn ($2.74bn, £1.35bn) on expanding its fleet.

The European aerospace giant owned by EADS has been campaigning hard for its A380 super-jumbo and the smaller A350 to feature on Cathay’s shopping list.

The Asian airline has emerged as a key customer for both manufacturers as they battle to capture the rapidly expanding Asian market. Boeing has predicted that 36% of the demand for new planes in the next 20 years will come from the Asia-Pacific region.

Cathay Pacific, best known for its business class service, currently operates a fleet of 105 airplanes, featuring a mix of Airbus and Boeing. It has already announced orders for 45 planes, which are expected to be delivered by the end of 2011. The E2bn order will come on top of this and the planes would be delivered after 2012.

The airline has also recently announced that it is expanding into the cargo market through a joint venture with Air China.

Singapore Airlines, Cathay Pacific’s rival in the Asian long-haul market, will become the first airline to fly the A380 in October this year. Hong Kong Airlines signed a memorandum of understanding for 51 Airbus aircraft at the Paris Air Show in June. By the end of June, Airbus had received 165 orders for the A380, which has a list price of around $320m.

Ian MacDougall, deputy marketing vice president at Airbus, has previously said: “The A380 is designed for world growth and Cathay Pacific is the sort of airline that needs them for the future.”

A final decision on the order is not expected until next year.

http://thebusinessonline.com/printable/ ... leet.thtml