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Airbus A350-1000 Buoyed by Cathay Order

July 10, 2012

Airbus A350-1000 Buoyed as Cathay Order Ends Four-Year Drought

Left to right, John Leahy, chief operating officer of Airbus SAS, Fabrice Bregier, chief executive officer of Airbus SAS, Christopher Pratt, chairman of Cathay Pacific Airways Ltd., and John Slosar, chief executive officer of Cathay Pacific Airways Ltd., with a model of a Airbus A350-1000 aircraft during a news conference on the second day of the Farnborough International Air Show on July 10, 2012. Photographer: Matthew Lloyd/Bloomberg

Airbus SAS’s A350-1000 won a vote of confidence from Cathay Pacific Airways Ltd. (293), which added 26 of Airbus’s largest twin-engine aircraft to its fleet, supporting a jet that hasn’t gained a fresh order in four years.

Cathay will convert 16 A350-900s on order into the larger variant, and buy an additional 10 A350-1000s, the companies said yesterday at the Farnborough air show. The A350-1000 has a list price of about $320 million.

Airbus pushed back entry into service of the A350-1000 by 18 months a year ago to add a more powerful engine. Airlines including Qatar Airways Ltd. have complained the aircraft still falls short of Airbus’s promise to deliver a plane that can outperform Boeing Co. (BA:US)’s bestselling 777 wide-body airliner.

Cathay’s purchase “confirms that when we do things right, we listen to the customers even if we’ve had to postpone a little bit the entry into service of this aircraft,” Airbus Chief Executive Officer Fabrice Bregier said at a press conference at the show. Bregier said he’s confident that Toulouse, France-based Airbus can deliver the jet to Cathay on time, even if the program remains “risky.”

Spirit Aerosystems Holdings Inc. (SPR:US) has delivered the center piece for the fuselage of the A350 static unit and another for the flight-test plane, said Jeff Turner, CEO of the Wichita, Kansas-based supplier. Spirit has also begun deliveries of A350 wing parts, he said.

The difficulties Airbus faced with the new wide-body design is typical in the industry, Turner said.

Usual Issues

“I don’t know of any new program that doesn’t have delays and issues,” Turner said in an interview at the air show south of London. “We’re still working very hard to work through the early issues that every program has.”

The A350-1000 has suffered a setback after Etihad canceled 13 jets, paring the Middle East carrier’s order book to 12 A350s. Hong Kong-based Cathay’s order upgrade brings the firm purchases of the A350-1000 to 78. The A350 program is powered only by Rolls-Royce Plc (RR/) Trent XWB engines.

Cathay Pacific shares rose as much as 2.7 percent in Hong Kong today before trading 1.6 percent higher at HK$12.92 as of 11:22 a.m. The stock has lost 3 percent this year, compared with the 5 percent advance in the city’s benchmark Hang Seng Index.,

Boeing’s new commercial-jet chief, Ray Conner, said on July 8 that he wants to confer with airlines about upgraded versions of the popular wide-body 777 and a new variant of the 787 Dreamliner before taking any new designs to the company’s board. Airbus’s stumbles with the A350-1000 have given Chicago-based Boeing some breathing room as it studies upgrades to its biggest twin-engine planes.

The mid-sized A350-900, the most popular variant, and the smaller A350-800 compete with Boeing’s Dreamliner, which entered commercial service in 2011 after a three-year delay. While the two smaller variants have built a broad order book, the A350-1000 has only won backing from five customers.

To contact the reporter on this story: Andrea Rothman in Toulouse at aerothman@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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Companies Mentioned

  • BA
    (Boeing Co/The)
    • $129.86 USD
    • -0.77
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  • SPR
    (Spirit AeroSystems Holdings Inc)
    • $30.17 USD
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