Cathay Pacific orders 27 Airbus and Boeing planes
- Cathay Pacific said on Wednesday that it has ordered 27 planes from Airbus and Boeing in a deal worth as much as $6.55 billion, as the carrier reported a record profit for 2010. Skip related content
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The Hong Kong airline said it had struck a deal with European aircraft maker Airbus to buy 15 A330-300s and a separate agreement with US-based Boeing for 10 777-300ERs as it moved to expand its fleet.The deal also included leasing two more Airbus A350-900s from International Lease Finance Corporation, Cathay said, adding that all the models would be delivered before the end of 2015.
Cathay said it was in talks to acquire 14 more planes in addition to those announced Wednesday, but did not elaborate further.
The total list price for the 27 planes was HK$51 billion ($6.55 billion) although they would "be acquired at a considerable discount, as is the usual practice in such transactions," Cathay said.
Cathay posted a net profit of HK$14.05 billion ($1.80 billion) in 2010, nearly triple the 2009 result of HK$4.69 billion. Year-on-year revenue increased by 33.7 percent to HK$89.52 billion, it added.
The airline and its regional unit Dragonair carried 26.8 million passengers in 2010, a 9.1 percent increase, it said.
Cargo revenue soared 50.1 percent to HK$25.9 billion last year, Cathay said, adding that the amount of freight carried by the airline and Dragonair totalled 1.8 million tonnes, an 18.1 percent year-on-year increase.
Cathay's latest financial results marked a major turnaround from 2008 when the carrier reported a record HK$8.69 billion loss as the global economic downturn hammered the airline industry, before the return to profit in 2009.
The carrier's shares closed 4.5 percent higher on Wednesday at HK$18.94.
"We made a remarkable recovery from the low point in 2008," Christoper Pratt, the firm's chairman, told a press briefing in Hong Kong Wednesday.
But the carrier also warned that prices for fuel, typically an airline's single biggest cost, were 28 percent higher in 2010 from the previous year. The current political instability across much of the Middle East could mean prices will be "potentially higher" than forecast this year, Pratt said.
"The spike in oil prices following the instability in the Middle East, it's a big challenge," he said
"Oil is the single biggest cost for Cathay Pacific. And it's now potentially higher than what we forecast at the beginning of the year... (We) hope there is no adverse effect on profitability."
The plane orders announced Wednesday come after Cathay booked its biggest-ever single purchase in September last year, buying 30 Airbus long-range A350 aircraft for a $7.82 billion list price.
Cathay said it now has a total of 91 new aircraft on order for delivery between now and 2019, with a total list price of about HK$185 billion.
"The latest order will enable the airline to replace older, less fuel-efficient aircraft as they are progressively retired from the fleet and... continue with the expansion of its passenger network," Cathay said.
On Tuesday, Boeing said Cathay rival Hong Kong Airlines, which currently has just 18 aircraft servicing routes to Asia and to Russia, had placed a preliminary order for 38 planes worth up to $8.5 billion at list prices.