Cathay Pacific is considering major fleet renewal

Cathay Pacific is currently considering a significant fleet renewal as it prepares for the reopening of borders in Hong Kong and China. Recent reports highlight two key concerns for the airline: retaining pilots and upgrading its fleet. These reports raise important questions about Cathay Pacific’s level of preparedness for the resumption of travel.

According to a Bloomberg interview with Cathay Pacific Airways CEO Augustus Tang, fleet renewal is a priority for the airline. As of now, Cathay operates a fleet of 186 aircraft, with 91 currently active. The fleet consists of various Airbus models, including A320ceos, A321ceos, A321NXs, A330-300s, A350-1000s, and A350-900s. Additionally, it operates Boeing aircraft such as Boeing 777-300s, 777-300ERs, and 14 747-8Fs, and six 747-400ERF freighters.

Cathay also has pending orders for 21 Boeing 777-9s, five Airbus A350s, and ten A321NXs. The average age of the fleet is 11.5 years, with A330s being the oldest at 15.5 years, followed by A320/321ceos at 18 years and 777-300s at 21 years.

Cathay Pacific aims to renew its short- and medium-haul fleet, with a particular focus on the A330 and 777 aircraft. These planes are crucial for the airline’s services across Asia and to destinations like Australia, New Zealand, and India. Tang compared the importance of renewing the regional fleet to Cathay’s initial purchase of the 777s, which have become the backbone of its intercontinental operations. The fleet renewal decision is critical, and Cathay is actively evaluating its fleet requirements. Tang mentioned that although no firm decision has been made, the regional fleet is a topic of close consideration.

Cathay Pacific has already made some fleet renewal decisions, with pending orders for the 777-9, A350, and A321neo aircraft. The airline remains open to selecting aircraft from both Boeing and Airbus, including considering the 737 MAX. This presents a prestigious opportunity for both manufacturers, and they are likely to compete fiercely for the deal.

Since the closure of Cathay Dragon in October 2020, Cathay Pacific has experienced a loss of approximately 500 pilots. The second Bloomberg report, based on an online staff presentation by Greg Hughes, Cathay’s chief operations and service delivery officer, confirms that resignation rates are significantly higher than before, with COS18 being a contributing factor. In response to COVID-19, Cathay Pacific announced a 25% reduction in its workforce in 2020, which included 600 pilots primarily from the closure of Cathay Dragon. The airline also implemented employment condition changes (COS18) for all pilots and cabin crew, resulting in pay cuts ranging from 40% to 60% for pilots who joined before 2018, based on seniority.

In recent years, Cathay has downsized its workforce by approximately 40% due to factors such as anti-China riots and the pandemic’s impact, including strict lockdowns in Hong Kong. In the Bloomberg interview, Augustus Tang stated that Cathay plans to hire 4,000 individuals, including 700 pilots, by the end of 2023. The airline also intends to recruit and train 800 junior pilots by 2025. Tang emphasized that all new hires will receive competitive pay packages aligned with market standards.

As we anticipate the recovery of Hong Kong and global aviation in the next 18-24 months, we continually assess our personnel requirements and plan for recruitment and training accordingly. In terms of aircraft, we consistently evaluate our fleet needs. As a Group, we already have 51 aircraft on order, scheduled to join our fleet in the upcoming years.