Hong Kong’s Cathay Pacific Airways has finalised a cut-price deal for 32 aircraft worth HK$36 billion (US$4.66 billion) from Europe’s Airbus, a move an analyst has said will guarantee the availability of new planes as the city’s flag carrier pushes ahead with expansion plans, Report informs via South China Morning Post.
The airline said in a filing on Friday it had bought the Airbus aircraft for the “basic price” of HK$36.35 billion, but had negotiated “significant price concessions”.
“Such price concessions were determined after arm’s length negotiations between the parties and, as a result, the actual consideration for the Airbus Aircraft is lower than the aircraft basic price mentioned,” Cathay Pacific explained.
The airline said the basic cost was made up of prices for the airframe, optional features and engine.
It added it was normal business practice in the industry not to disclose the actual amount paid as that would mean the loss of the price reduction.
Cathay said in August it intended to buy up to 32 Airbus 321neo and A320neo planes as it expanded its fleet.
The manufacturer said the acquisition doubled Cathay group’s total orders for the A320neo family to 64 and that 13 had already been delivered.
The extra 32 aircraft will be used to expand the fleets of Cathay Pacific and its budget arm HK Express.
The airline said the new jets would mostly be used on routes to mainland China and elsewhere in Asia.
Cathay, HK Express and the company’s cargo carrier Air Hong Kong operate 225 aircraft in total.