Cathay to splurge $60b

Cathay Pacific Airways (0293) has confirmed its biggest ever investment, ordering 30 aircraft from Airbus for HK$60.84 billion, with an option to buy 30 more.

"It is a huge commitment. We are confident in Hong Kong as an international aviation hub," chief executive Tony Tyler said.

He said the new A350-900 can help the carrier save 25 percent in operating costs because of its lighter airframe and latest-generation engines.

The airline will begin payments on delivery, and has no plan to raise funds to finance the transaction, Tyler said. Cathay had more than HK$20 billion in cash on June 30.

The 30 A350-900 aircraft will begin delivery in 2016 and are scheduled to arrive over a three-year period.

Tyler expects the aircraft will increase Cathay's total capacity "modestly" as Boeing 777 aircraft are phased out.

Cathay has not yet decided which destinations it will add after the fleet is expanded, but will be looking at long-haul flights to the United States and Europe.

The A350-900 has a non-stop flying range of 8,000 nautical miles, Airbus Asia chief operating officer John Leahy said.

Despite the emerging budget airlines in the region, the carrier is optimistic about cargo and passenger traffic demand remaining strong in the fourth quarter, Tyler said.

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