Cathay Pacific Airways Ltd agreed to buy six new Airbus SAS A300-600 freighters worth as much as US$780 million as it starts new routes in Asia and handles more DHL Worldwide Express packages.
The wide-body aircraft are scheduled to be delivered between the second half of next year and the first quarter of 2005, Cathay said in an e-mailed statement. Airbus' listed price for the A300-600 aircraft is between US$110 million and US$130 million, according to its spokesman, Anthony Phillips. Analysts say Cathay probably paid less.
Europe's Airbus SAS is targeting Asia and offering discounts to achieve its target of 300 plane deliveries this year, a figure that would allow it to beat Boeing Co. Cathay wants to quadruple the fleet of its Air Hong Kong cargo unit since Deutsche Post AG's DHL bought a 30 percent stake in October and decided to use Hong Kong as its Asian hub.
"Airbus seems to be having all the success recently and they're pricing very aggressively," said Peter Harbison, managing director of the Centre for Asia Pacific Aviation in Sydney, who said other Chinese carriers may also be eyeing orders. "The orders reflect what's been an extremely strong six months for freight in Asia, and anticipation that strong growth will continue."
According to the latest figures from the International Air Transport Association, air freight grew 12 percent for the first 10 months of last year from the previous year for Asia Pacific, outpacing the worldwide average gain of 5.4 percent.
Air Hong Kong now operates scheduled flights with two planes -- one from parent Cathay and one from a US leasing company -- to Tokyo, Osaka and Seoul. It wants to fly to Malaysia, Singapore, Thailand, Taiwan, Korea and China, adding eight more destinations in Asia within 15 months.
"They're getting themselves into the express market," which is more profitable than ordinary cargo, said Philip Wickham, an analyst at ING Financial Markets.
Air Hong Kong said it hasn't decided who will supply the engines for its new Airbus freighters. General Electric Co and United Technologies Corp unit Pratt & Whitney both make engines for the aircraft.
The cargo operator expects to handle about 160,000 tonnes of express cargo a year. The volume is expected to grow between 15 percent and 20 percent annually over five years, it said earlier.
Cathay Pacific Chairman James Hughes-Hallet said last month that he is "very confident that the global economy will continue to deliver double-digit growth for Hong Kong as far as air cargo is concerned."
Cargo traffic in Hong Kong has exceeded the pre-Sept. 11 figures, said Albert Lam, director general of civil aviation in Hong Kong in a statement yesterday. Hong Kong's cargo throughput for the 12 months ended Nov. 30 was 16 percent higher than during the 12 months preceding September 2001.
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