Another domino has fallen for Boeing, an order with an eventual total list price that's likely to approach $8 billion.
Another domino has fallen for Boeing, an order with an eventual total list price that’s likely to approach $8 billion. It’s the latest in a series of recent huge wins that is crushing Airbus in sales of widebody jets.
Hong Kong-based airline Cathay Pacific announced Thursday it will buy a dozen 777-300ERs from Boeing and lease four more from International Lease Finance Corporation (ILFC).
The deal’s significance goes well beyond that initial firm order because Cathay also took options to buy 20 more 777s from Boeing. Cathay is a premier Asian airline and it’s a safe bet those options will be exercised over time.
“This is a long-term commitment to the continued profitable growth of the airline,” Cathay’s chief executive Philip Chen said in a statement.
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Top-of-the-line 777-300ERs are listed for sale at $250 million, although at least a 30 percent discount is likely from the list prices.
The Cathay win is also strategically significant, as it is the first of three highly anticipated widebody jet orders from that part of the globe.
Singapore Airlines and Qantas of Australia are also weighing large widebody orders and industry sources believe Boeing is favored in those cases too.
Last week, Middle East airline Emirates also went for Boeing against Airbus, ordering 42 long-range 777s, a deal worth $9.7 billion at list prices.
The Emirates and Cathay wins mean that in addition to the successful new 787, Boeing’s larger 777 is also a very hot seller, soaring against its Airbus competitor, the A340.
The Boeing jet is a fuel-efficient twin-jet, while the Airbus plane is a four-engine jet. With oil prices so high, that difference is tipping airlines toward Boeing.
So far this year, excluding the Cathay win, Boeing has booked 109 firm new orders for 777s, compared to 14 orders for A340s.
This week’s Flight International, a respected industry trade magazine, reported that Airbus is studying a revamp of the A340—with new engines and a lighter aluminum/lithium alloy fuselage that would compete better against the 777.
Such a new derivative would be a major undertaking, similar to the revamp of the 747 recently announced by Boeing. It would further tax the European plane-maker’s resources as it strives to get the A380 superjumbo into service while at the same time developing the new A350 that will compete against the 787.
In addition to the big 777 order, Cathay also said Thursday it will acquire three Airbus A330-300s to operate regional routes.
Cathay currently flies 95 aircraft and the fleet will increase to 100 aircraft by next September, its 60th anniversary.
Its long-haul fleet comprises 22 Boeing 747-400, 15 Airbus A340-300 and three Airbus A340-600. The regional fleet comprises 16 Boeing 777-200/300 and 26 Airbus A330-300 aircraft. The airline also operates 13 Boeing 747 freighters.
Later this month, the airline takes delivery of the world’s first 747-400BCF (Boeing Converted Freighter), converted from one of its own 747-400 passenger jets. The conversion is a Boeing design, with modifications done by Taikoo (Xiamen) Aircraft Engineering in Xiamen, China.
Cathay has firm orders to convert six such 747s and options for a further six.
Dominic Gates: 206-464-2963 or email@example.com