Cathay Pacific to buy Airbus A321neo jets for $4.1 billion

Bloomberg

Cathay Pacific Airways Ltd. agreed to purchase 32 Airbus SE single-aisle jets in an order worth $4.1 billion as it seeks to upgrade and expand the fleet of its affiliate Cathay Dragon.
The Hong Kong carrier entered into a non-binding preliminary agreement to buy the A321-200neo aircraft, it said in a statement to the city’s stock exchange on Monday. The jets, scheduled to be delivered between 2020 and 2023, carry a list price of $127 million each, excluding discounts that are customary for huge orders.
The airline, which last week reported its worst half-year loss in at least two decades, is in the midst of a corporate revamp that includes job cuts and measures to improve services. The new aircraft will replace Cathay Dragon’s 15 A320s and eight A321s, the airline said in a statement separately. Besides the 23 single-aisle jets, it also operates 24 wide-body A330s, serving 56 destinations in Asia.
“The substantial investment we are making in new aircraft underlines our confidence in the future of the Cathay Pacific Group, as well as our commitment to bolstering Hong Kong’s position as Asia’s largest international aviation hub,” Chief Executive Officer Rupert Hogg said.
The A321neo has a seating capacity of up to 240 and has an extended range of up to 7,400 kilometers (4,600 miles), according to Airbus.

Cathay CEO bets on service
Bloomberg

Cathay isn’t going to embrace the discount-fare revolution.
Undaunted by the worst half-year loss in at least two decades, declining passenger numbers and cheaper fares, Cathay Pacific Airways Ltd.’s new Chief Executive Officer Rupert Hogg rejected suggestions for a budget carrier with an emphatic no.
Instead, he plans to focus on better services such as new lounges in major airports, offering Wi-Fi on board planes, more dining options and self-check-in facilities to nurse the carrier back to financial health.
“Broadly speaking, we have no plans to start a low-cost airline,” Hogg, 55, said.
“But we compete with low-cost carriers on lots of different routes and clearly we have to have a proposition that price sensitive and first-time travellers find attractive and prefer to fly on our airline relative to the alternatives.”
Analysts including Corrine Png, chief executive officer of Singapore-based Crucial Perspective Pte., and Shukor Yusof, founder of Endau Analytics in Malaysia, have said Cathay needs to take a leaf out of rival Singapore Airlines Ltd. and start a budget a carrier, or turn its affiliate Cathay Dragon into one to keep a grip on Hong Kong passengers.
Singapore Air has operated a low-fare airline for about a decade from its base in Changi Airport, where about 50 percent of all travelers are now taking a budget carrier.
The marquee airline reported a net loss of HK$2.05 billion ($262 million) for the six months through June in its 70-year history.