As Cargo Facts has been predicting for several months, Cathay Pacific Airways, Air China, Air China Cargo (in which Cathay is a 49% stakeholder), and Boeing have formalized an agreement that will see a massive shakeup of the two carriers’ fleets. We will update this post as more details become available, but in brief this is what has been agreed to:
- Cathay placed a firm order for three more 747-8Fs
- Cathay cancelled its order for eight 777Fs. Pre-delivery payments on the 777Fs will be applied to the 747-8F order
- Cathay acquired options to purchase five 777Fs at a future date
- Boeing has agreed to purchase four 747-400BCFs from Cathay
- Air China Cargo placed a firm order with Boeing for eight 777Fs, with delivery to take place 2013 through 2015.
- Boeing agreed to purchase seven 747-400BCFs from Air China Cargo
- Air China placed firm orders for two 747-8I (pax version), one 777-300ER, and twenty 737-800s
The net effect of these agreements (once all the aircraft involved have been delivered) will be to leave Cathay with a twenty-five unit freighter fleet made up of thirteen 747-8Fs, six 747-400ERFs, and six 747-400Fs. For its part, Air China Cargo will have a modernized fleet that includes three 747-400Fs and eight 777Fs.
Of course, it is possible the two carriers may sell, retire, or return to the lessor some of their 747-400Fs as the newer freighters enter their fleets. No announcement has been made on that subject, but Cathay’s notice to the Hong Kong Stock Exchange is worded in a way that suggests Air China Cargo will end up with an all-777F fleet. (We also point out that Air China Cargo currently operates two 747-400BDSFs, but these are leased (from Guggenheim Aviation Partners) rather than owned, and will likely be returned to the lessor when their contracts expire.)
Nick Rhodes, Director Cargo at Cathay Pacific, will be among the speakers at our upcoming 2013 Cargo Facts Asia Aircraft Symposium on April 16-17 in Hong Kong. To attend, click here.
David, This has been an excellent string of news coverage on this situation. We saw the statement by Boeing that 747-8 positions were in jeopardy, then the item on delivery deferrals, now the announcement of this deal. Great coverage by you and cargofacts.net. It’s very dynamic for everyone involved right now. Thanks, Mike Stewart
Thanks Mike. Always good to hear from you.
And while a lot of the recent news has been less than pleasant, at least this Cathay/Air China/Air China Cargo/Boeing deal looks like a winner for all concerned — particularly if Cathay converts some of those 777F options in the next few years.
Update as of 4 March: I’ve added a couple of things to the post above, including the delivery schedule for the Air China Cargo 777Fs (2013 to 2015), and our speculation that Air China Cargo will likely sell, retire, or return to the lessor all the other freighters in its fleet, leaving it with just the eight 777Fs.