On Wednesday, its latest purchase, the technologically advanced, long-haul Airbus A350-1000, landed in Hong Kong, decorated in the airline’s green and white livery, after a 12-hour journey from the planemaker’s headquarters in Toulouse, France.
Hong Kong’s flag carrier is only the second airline to fly the long-range jet, after Qatar Airways. By 2021, it will have 20 of the A350’s larger twin-aisle, twin-engined planes in its fleet.
This will add to the current 22 smaller A350-900s it has, with six more of the planes to be delivered over the next two years.
Even as the airline’s chief customer and commercial officer Paul Loo Kar-pui endorsed the A350 jetliner as a high performer, he scotched Airbus’ hopes that one of its biggest customers would order more aircraft.
We are happy with where we are now, Loo said.
The impending deliveries mean the carrier will get about one new plane a month, which is around the right pace, Loo said. Cathay Pacific and its subsidiary Cathay Dragon fly to more than 200 destinations and have a fleet of almost 200 aircraft.
Airbus has faced a lull in orders of its A350 jets of late, and chief commercial officer Eric Schulz said it hoped the carrier would buy more aircraft.
But Schultz added he understood the company would refrain from a spending spree now as it had sizeable investments coming.
Aviation leaders at an annual gathering in Sydney this month cited rising oil prices as one major drag on airline profits.
Loss-making Cathay Pacific is still trying to move past bad fuel hedging bets made some years back, that locked it into agreements to buy fuel at a price higher than the market now offers.
It still has some paid-up fuel contracts made at US$80 a barrel, which will cover about 45 per cent of its fuel needs in the next two years.
The airline’s fuel costs, including losses from hedging, rose 11 per cent last year from the previous year to HK$31.2 billion.
The airline will use a number of its new A350-1000 planes – seating 334 passengers, including 256 in economy – to replace the 340-seater Boeing 777-300ER on several existing routes such as Amsterdam, Zurich and Madrid.
It will also use them on its newest destination and longest non-stop flight Hong Kong to Washington from September this year.
The airline will rework 65 of the Boeing planes, adding 10 per cent more economy seats. This will allow the carrier to move more passengers and raise revenue, amid a three-year restructuring and cost-cutting exercise.
Airbus executives noted how low oil prices over the past three years had induced airlines to extend the operating life of old aircraft or buy second-hand planes, rather than spending millions on new ones.
Marisa Lucas, head of marketing for the A350 ultra-long-range planes, said: When the prices of oil went down, it was easy to extend the life of the aircraft already in service.
If the oil prices start to go up, and there is a big uncertainty there, the most fuel-efficient planes are your natural hedging.
But she said rising oil prices had not shown signs of pushing up demand for new planes, for now.
The A350 has proved more reliable than its rival Boeing 787 series. While Boeing has had dozens of 787 planes grounded with engine problems, Airbus said it had not had a single shutdown during the 1.5 million flying hours for its A350 planes.
Both planes use Rolls-Royce engines, but different kinds.
Airbus has received 847 orders for the A350 series from 44 airlines so far. It has delivered 174 planes to 17 operators, including Qatar Airways, which owns a 9.94 per cent stake in Cathay Pacific.
Tourism Observer
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