Biggest Airbus A350 trips as Cathay latest to prefer sibling

Bloomberg

Airbus SE’s newest wide-body jet lost more orders as Cathay Pacific Airways Ltd. switched a contract for six A350-1000s to the smaller -900 variant and deferred delivery of five more by a year.
The model switch, announced by Asia’s biggest international carrier, follows a decision last week at United Airlines to swap on order for 35 A350-1000s to 45 -900s, a move that increased the overall value of the deal but took a large bite out of the bigger jet’s backlog.
The Cathay decision narrows the order book for the 366-seat A350-1000 to 171 aircraft, based on the planemaker’s latest data, while lifting the backlog for the 325-berth -900 to 679 planes. The larger jetliner is falling out of favour as carriers around the world rein in capacity expansion to ease pressure on fares, while United Chief Financial Officer Andrew Levy said the -1000 is also too close in size to the largest Boeing Co. 777 model.
For Cathay, which is cutting costs to help revive earnings, the switch could save about $288 million, based on list prices.
The order revisions suggest that the sweet-spot for twin-engine wide-body orders remains in the 250-350 seat range at a time of excess capacity and with the low oil price making it possible for carriers to put off fleet renewal and upgrades, aerospace consultant Richard Aboulafia said. Cathay Pacific didn’t give a reason for the A350 flip, announced as part of an order for 32 A321neo planes, saying only that the move would save it
$288 million.
The Hong Kong carrier has altered course on the A350 before, having ordered 30 -900s in 2010 before two years later switching 16 to -1000s and placing a separate $3.3 billion order for 10 more of the larger aircraft.
All told, Cathay is now due to take 26 -900s—of which 16 have been handed over—and 20 -1000s. The five deferred -1000s will be pushed back by a year to arrive from 2021.
Airbus said that the A350-1000 is complementary to the -900 and part of a successful family that has accrued 848 firm orders from 45 customers spanning seven years of production. Switches between models aren’t a major issue since all stations on the A350 final assembly line can accommodate both models, as can tooling and personnel, spokesman Stefan Schaffrath said in an email.
He added that past experience shows that aircraft sizes within a model series increase over time and that Airbus is “very bullish” about the A350 lineup. United was set to be the second-biggest operator before its exit.
Cathay’s remaining 20 orders will make it the No. 3 customer, followed by IAG SA’s British Airways and Iran Air, which are scheduled to take 18 and 16 aircraft respectively.
Dubai-based Emirates was also a major -1000 buyer with
20 orders before it scrapped the deal in 2014, along with one
for 50 -900s.
Airbus abandoned the smallest A350-800 variant, which would have carried 280 people, in 2014 as airlines embraced bigger twinjets. The company said in January it was stepping up work on a stretched version of the -1000 carrying 396 people in three classes in order to challenge the sales success of the biggest version of the Boeing Co. 777X series due at the end of the decade. It has since shelved that plan.
The European manufacturer will be anxious that the A350’s travails stop with the -1000; as part of United’s restructured deal the handover of the smaller -900s won’t now begin until 2022, years later than planned. The retention of the order earmarks the A350 as a preferred replacement for the current generation 777.