Cathay Pacific buys 14 planes in US$8b deal with Boeing, first in a decade
(Aug 6): Cathay Pacific Airways Ltd said it would place an US$8.1 billion (RM34.24 billion) order for 14 more Boeing Co 777-9 jets in its first deal with the US planemaker in 12 years.
The agreement also gives the Hong Kong-based carrier the right to buy seven more, it said in a statement. Bloomberg News reported the deal earlier Wednesday. It expects the aircraft to be delivered by 2034.
While the deal points to Cathay’s long-term optimism about travel demand, shares tumbled more than 9% after the carrier reported first-half results. Net income rose 1.1% to about HK$3.7 billion (US$471 million or RM1.99 billion) in the six months ended June 30. Revenue rose 9.5% to HK$54.3 billion, while expenses climbed about 10%.
The order for additional Boeing jets is a major boost for the 777X programme, which is still to be certified and is years late coming into service. Cathay’s last Boeing order was in 2013. Since then, the US planemaker has lost to rival Airbus SE on commitments amounting to about 150 jets.
Cathay’s latest order makes it one of the largest buyers of the 777X, with at least 35 aircraft, though it’s dwarfed by Gulf carriers Emirates Airline and Qatar Airways.
Boeing-related A shares rose on mainland China markets after Bloomberg reported on the purchase plan. Baoji Titanium Industry Co jumped as much as 6.2%, while AVIC Xi’an Aircraft Industry Group Co was up as much as 3.8%.
Cathay saw a pick-up in travel demand in the first half. The airline group, which includes HK Express, carried 17.4 million passengers, 29% more than the same time last year.
Costs continued to weigh on the airline’s result. While lower jetfuel prices offered a modicum of relief, Cathay said its fuel bill rose due to the increase in the number of flights it operated. Yields, a proxy for airfares and the competitive pressures Cathay faces, worsened, falling 12.3%.
The airline also warned that its HK Express unit faces short-term challenges, though travel demand for Cathay Pacific remains robust and the airline will continue to add more flights and destinations.
Support growth
That will be supported by the aircraft purchase, which Cathay said will progressively replace a portion of its existing fleet of long-haul widebody aircraft. The carrier was one of the first to commit to the 777X programme when it placed an order in December 2013 for 21 777-9s.
Cathay Pacific, whose major shareholders include Swire Pacific and Air China Ltd, operates a fleet of 234 aircraft: 72 Boeing planes and 162 Airbus jets. It has agreements to buy more than 100 new aircraft, according to its 2025 interim report. The airline has pledged over HK$100 billion worth of investments, largely in new aircraft.
Airbus has previously scooped up consecutive orders with Cathay for passenger widebody, single-aisle and freighter jets.
