Hong Kong-based Cathay Pacific will cut its longstanding Boeing 777X order, according to Hong Kong media sources. Cathay Pacific has an order for 21 Boeing 777-9X aircraft. However, as the airline continues to struggle, the word is that order will get cut by almost half.
A report by Danny Lee in The South China Morning Post on Sunday, April 25, cites two airline sources saying the 777X order would downsize to between 10 and 15 planes. Doing so would cut billions of the purchase price.
Cathay Pacific had flagged delivery deferrals, but no word on cutting order
The 777-9Xs were originally due to start arriving at Cathay Pacific this year. However, well-publicized problems with the Boeing 777X have seen the delivery timelines blow out. In early March, when presenting Cathay Pacific’s 2020 Annual Results, Chairman Patrick Healy said the airline was in “advanced negotiations” for further deferring delivery timelines.
But Mr Healy didn’t say Cathay Pacific was looking at cutting the 777X order. The order dates from better times at Cathay Pacific. In December 2013, Cathay Pacific became Asia’s first 777X customer with an order for 21 777-9X aircraft.
“We think it will be an ideal fit for long-haul destinations in North America and Europe,” said then Cathay Pacific CEO John Slosar.
Seven years ago, the 777X ticked a lot of boxes at Cathay Pacific
According to Boeing’s list prices, Cathay Pacific’s order was worth US$7 billion-plus. That proved a nice top-up for Boeing. The United States aircraft manufacturer had only launched the 777X program twelve months previously. Cathay Pacific’s order took the 777X orders at Boeing to 259 planes worth $95 billion. In 2013, Boeing was still targeting 2020 for its first 777X deliveries.
In addition to modernizing its fleet, Cathay Pacific liked the 777X’s reduced environmental emissions, improved payload range capability, and reduced operating costs.
“We think it will be an ideal fit for long-haul destinations in North America and Europe, in particular those routes where we carry high volumes of passengers and cargo each day,” said Mr Slosar.
That was over seven years ago. Since then, Boeing, Cathay Pacific, and the wider airline industry have faced significant challenges. The problems and delays with the 777X program are simply one part of a raft of production and quality problems Boeing faces across various airline types. However, since early 2020, Boeing has been conducting 777X test flights.
The gloss had worn off Boeing’s 777X program
The delays have seen the gloss wear off the 777X program, with many airline customers losing enthusiasm. After that initial rush, new orders tapered off. Now, like Cathay Pacific, many airlines are looking to cut their 777X orders in the face of delivery uncertainties and an unfavorable operating environment.
Emirates President Tim Clark, recently told Simple Flying that’s he was uncertain when the first 777X’s would arrive at that airline. The Dubai-based airline is currently the biggest Boeing 777X customer with 115 of the planes on order. Emirates originally ordered 150 of the planes, but that has now downsized. Tim Clark remains less than impressed with the delays, saying the order may be further cut.
Boeing’s 777X order book now stands at less than 200 planes. Meanwhile, Cathay Pacific also faces its own challenges. Cathay Pacific recently posted a $2.8 billion loss for calendar 2020, and the airline’s short-term outlook is not pretty. Cutting the 777X order size and deferring delivery of the remaining planes will give the airline some much-needed financial breathing space. Cathay Pacific is now eyeing its first Boeing 777-9X delivery in 2025.
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