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PepeTheFrog
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Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 5:08 am

Dominic Gates did find something out on Cathay's 777X order:

Last month, Cathay signed extended leases of 10 years or more on a dozen 777-300ERs with BOC Aviation. And according to a senior executive with an aircraft lessor — who asked not to be identified to preserve business relations with Boeing — Cathay is in talks with a different lessor to extend the leases on another 10 777-300ERs for another decade.

“Unofficially, Cathay is saying it won’t take the 777Xs,” said the senior lessor executive.


The entire article can be found at https://www.seattletimes.com/business/b ... roduction/
Good moaning!
 
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FrenchPotatoEye
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 5:13 am

Did he actually find anything?

It's not fact, it's heresay. And who is the unidentified person making the claims?

Until it happens, thread likes this is as useful as fake news threads on April's Fooled Day :)
 
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PepeTheFrog
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 5:15 am

FrenchPotatoEye wrote:
Until it happens, thread likes this is as useful as fake news threads on April's Fooled Day :)


If CX extended some 20 77W leases for another 10 years as the article points out, they certainly won't need the 777X capacity in the coming years.
Good moaning!
 
Blerg
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 5:16 am

But wouldn't this make sense? I mean CX was struggling since Hong Kong protests started so it's not like they are after new and expensive planes.
 
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MrHMSH
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 5:29 am

Would be a bit if a downsize, but for a struggling carrier larger isn't better, with the A350 on property already they have the equipment to makes the routes work a little better. If it is true then further down the line we could see a conversion to the 78X (can see Airbus pitching the A330neo heavily though). While not a huge order, it'd still be a sizeable blow to the 777X. While I didn't think the 777X would be a failure at all (just not as successful as the 77W) its future is possibly the most at risk from the virus crisis of the widebodies currently on offer.
 
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FrenchPotatoEye
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 5:40 am

PepeTheFrog wrote:
FrenchPotatoEye wrote:
Until it happens, thread likes this is as useful as fake news threads on April's Fooled Day :)


If CX extended some 20 77W leases for another 10 years as the article points out, they certainly won't need the 777X capacity in the coming years.


Key word - IF

Not extended leases yet.

Also, 77X rate is nil today. May take till 2022 or later to even get to 3 units-a-month.

Defferralls is cheaper than cancel, because the Cathay will lost deposits and even more moneys.

Traffic is bad for every airline.
 
LJ
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 5:43 am

PepeTheFrog wrote:
FrenchPotatoEye wrote:
Until it happens, thread likes this is as useful as fake news threads on April's Fooled Day :)


If CX extended some 20 77W leases for another 10 years as the article points out, they certainly won't need the 777X capacity in the coming years.


However, then they would probably defer the 77X for another 10 years, not "walk away from 77X order".
 
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PepeTheFrog
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 5:51 am

FrenchPotatoEye wrote:
Not extended leases yet.


Are we reading the same article?

Last month, Cathay signed extended leases of 10 years or more on a dozen 777-300ERs with BOC Aviation.
Good moaning!
 
Ishrion
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 5:52 am

Didn’t Cathay sell a few 77Ws to a leasing company or something?
 
reply1984
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 6:03 am

PepeTheFrog wrote:
FrenchPotatoEye wrote:
Not extended leases yet.


Are we reading the same article?

Last month, Cathay signed extended leases of 10 years or more on a dozen 777-300ERs with BOC Aviation.


This looks like a fake news. Per planespotter.com, Previously CX only leased 6 77Ws from BOC Aviation and in March they conducted a sell-and-lease-back with BOC Aviation for another 6 77Ws. I think this is how 'a dozen' comes from. If CX has already extended the lease, this only means they have 6 77Ws for longer time, instead of 12.

Even though,
1. I have not seen any news about lease extension of these 6 77Ws.
2. If CX would like to cut orders, the first batch of victims is their A350 orders. They still have 4 A350-900s and 8 A350-1000s on order, and by their original schedule, these 12 birds will be delivered by 2021. And B777X is likely to be delayed to 2022. Cutting A350 orders is a more urgent task.
 
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FrenchPotatoEye
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 6:25 am

PepeTheFrog wrote:
FrenchPotatoEye wrote:
Not extended leases yet.


Are we reading the same article?

Last month, Cathay signed extended leases of 10 years or more on a dozen 777-300ERs with BOC Aviation.


Yes. But you not reading the other parts which says:

"Cathay is in talks with a different lessor to extend the leases on another 10 777-300ERs for another decade"

So, it has not the happened yet.
 
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PepeTheFrog
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 6:30 am

reply1984 wrote:
This looks like a fake news.


I do want to point out that Dominic Gates is a well respected aviation journalist.

Previously CX only leased 6 77Ws from BOC Aviation and in March they conducted a sell-and-lease-back with BOC Aviation for another 6 77Ws. I think this is how 'a dozen' comes from. If CX has already extended the lease, this only means they have 6 77Ws for longer time, instead of 12.


Obviously, the sell-and-lease-back deal would be for another 10 years. That makes 6 (sell-and-lease-back) + 6 (extended lease) = 12 aircraft for the longer time from BOC.

And the article claims CX is working with another lessor to extend the lease for another 10 77W aircraft.

That would make more than 20 77W aircraft for the long term.

It should ring a bell.

1. I have not seen any news about lease extension of these 6 77Ws.


B2B deals are not always communicated with the general public.

2. If CX would like to cut orders, the first batch of victims is their A350 orders. They still have 4 A350-900s and 8 A350-1000s on order, and by their original schedule, these 12 birds will be delivered by 2021. And B777X is likely to be delayed to 2022. Cutting A350 orders is a more urgent task


As the A350 is already in the fleet, deferring would be the more logical option. Introducing a new airplane when the airline doesn't need the capacity for the coming years seems rather unlikely.
Last edited by PepeTheFrog on Thu Apr 16, 2020 6:36 am, edited 1 time in total.
Good moaning!
 
FluidFlow
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 6:35 am

The CX 777X order will be like the UA 350 order. Always on the books, never on the tarmac.
 
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PepeTheFrog
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 6:40 am

FrenchPotatoEye wrote:
PepeTheFrog wrote:
FrenchPotatoEye wrote:
Not extended leases yet.


Are we reading the same article?

Last month, Cathay signed extended leases of 10 years or more on a dozen 777-300ERs with BOC Aviation.


Yes. But you not reading the other parts which says:

"Cathay is in talks with a different lessor to extend the leases on another 10 777-300ERs for another decade"

So, it has not the happened yet.


Clearly it is happening, as both parties are in talks.

That says something about CX future plans.

And that's something we can debate on a forum. A lot of deals that are in progress are discussed on this forum. So let's discus.
Good moaning!
 
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SEPilot
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 6:58 am

Of all the airlines in the world I would list CX as the one under the most pressure. Before the Coronavirus hit they were suffering more than any other from the side effects of the Hong Kong protests. And, being a Chinese carrier, they are also hit harder than most by the Coronavirus situation itself. So it would be surprising if they did NOT make some retrenching moves. The 77X represents a huge investment and an increase in capacity, and may well be a bridge too far at present. The Coronavirus situation will blow over, but nobody knows what ultimately will come out of the Hong Kong protests. I would suspect they would defer rather than cancel the orders at this point. The 77Ws will not stay in the fleet forever.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
Gremlinzzzz
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 7:10 am

reply1984 wrote:
PepeTheFrog wrote:
FrenchPotatoEye wrote:
Not extended leases yet.


Are we reading the same article?

Last month, Cathay signed extended leases of 10 years or more on a dozen 777-300ERs with BOC Aviation.


This looks like a fake news. Per planespotter.com, Previously CX only leased 6 77Ws from BOC Aviation and in March they conducted a sell-and-lease-back with BOC Aviation for another 6 77Ws. I think this is how 'a dozen' comes from. If CX has already extended the lease, this only means they have 6 77Ws for longer time, instead of 12.

Even though,
1. I have not seen any news about lease extension of these 6 77Ws.
2. If CX would like to cut orders, the first batch of victims is their A350 orders. They still have 4 A350-900s and 8 A350-1000s on order, and by their original schedule, these 12 birds will be delivered by 2021. And B777X is likely to be delayed to 2022. Cutting A350 orders is a more urgent task.
They will defer everything. None of the airframers have an option with the market as is today.
 
JayinKitsap
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 7:12 am

At least Cathay did the sale & lease back before the window slammed shut. Today the sale price would be far lower.

779 deliveries may start in 2021 but production will be low for at least a year, than rise. It would be pretty easy to defer the first for CX for 3 to 4 years. That does not seem inconsistent with sale leasebacks. A smattering of articles I found showing some of their other work on their discussions and actions.

It is now trying to negotiate the early return of some of its leased Boeing Co 777-300ER planes, according to a person familiar with the plans, as it focuses on operating more fuel-efficient A350s.

Boeing’s delays in certifying the larger 777X means Cathay can also put off taking delivery of those aircraft, which it has already ordered.


https://www.freemalaysiatoday.com/categ ... anagement/

As reported by Flight Global, Cathay Pacific Group was due to take delivery of 17 Airbus aircraft later this year. Seven A350s were to go to Cathay Pacific, six A321neos to Cathay Dragon and another four A320neos to its low-cost carrier HK Express. Cathay Pacific was also expecting its first Boeing 777X by summer 2020, but this delivery has been delayed by the manufacturer until 2021; a fact that may offer some reprieve to the hard-pressed airline.


https://simpleflying.com/cathay-pacific ... eliveries/
 
GoSharks
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 7:12 am

SEPilot wrote:
And, being a Chinese carrier, they are also hit harder than most by the Coronavirus situation itself.

Since when has CX been considered a Chinese carrier?
 
reply1984
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 7:13 am

PepeTheFrog wrote:

Obviously, the sell-and-lease-back deal would be for another 10 years. That makes 6 (sell-and-lease-back) + 6 (extended lease) = 12 aircraft for the longer time from BOC.

And the article claims CX is working with another lessor to extend the lease for another 10 77W aircraft.

That would make more than 20 77W aircraft for the long term.


It seems like you need to look through these numbers more carefully.

CX previously own 6 77Ws.
And they sell-and-lease-back these 6 77Ws.

Do CX own more 77Ws for the long term after the sell-and-lease-back?
No. This is just for financing.

Here is CX's fleet strategy:
(Happening) Add A350-900 to replace A330s, and explore new destinations;
(Happening) Add A350-1000 to replace three-cabin B77Ws, and add new capacity;
(Planning) Add B779 to replace four-cabin B77Ws.(The order of 21 is one for one replacement)
It is very obivious that if they decide to stop receiving new planes, they have to extend lease of their 77Ws.

The current situations are:
1. CX need to preserve cash and cut capital expenditure in the near term;
2. They do not need to add capacity before 2021;
3. It is previously anticipated that CX will top up B779 orders after they get their B779s, for capacity expansion after HKG's third runway starts to operate in 2024.
4. A359/A35K will be delivered much earlier than B779.
5. Don't forget the compatibility between B77W and B779.

Please tell me, which one is a better option?
1. Defer/cut A359/A35K orders to save cash in the near term, and adopt wait-and-see approach on B779.
2. Cut the B779 orders even though the capital expenditure won't happen in two years or even longer.
 
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FrenchPotatoEye
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 7:27 am

PepeTheFrog wrote:
FrenchPotatoEye wrote:
PepeTheFrog wrote:

Are we reading the same article?



Yes. But you not reading the other parts which says:

"Cathay is in talks with a different lessor to extend the leases on another 10 777-300ERs for another decade"

So, it has not the happened yet.


Clearly it is happening, as both parties are in talks.

That says something about CX future plans.

And that's something we can debate on a forum. A lot of deals that are in progress are discussed on this forum. So let's discus.


But is has not happened, has it?

That's why they are talking. When it happens, we will know. Many talks happen and deals not materialize. Talk is cheap!!

Beyond that, not much to discuss. Let's see if they extend leases first. :)
 
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PepeTheFrog
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 7:32 am

reply1984 wrote:
No. This is just for financing.


It's not about owning, it's about the 77W aircraft CX will operate for the next 10 years. Whether they are owned or leased, it's difficult to deny that CX will operate far more 77W than planned for a long time to come.

It is very obivious that if they decide to stop receiving new planes, they have to extend lease of their 77Ws.


Yes, but not for 10 years. CX could have extended the leases for a short period of time (not unusual in the industry) to bridge the crisis, but instead chose to extend for 10 years.

3. It is previously anticipated that CX will top up B779 orders after they get their B779s, for capacity expansion after HKG's third runway starts to operate in 2024


We are in the middle of a crisis and you seem to be looking at capacity expansion while airlines are downsizing for the new world that is to come:

1. Defer/cut A359/A35K orders to save cash in the near term, and adopt wait-and-see approach on B779.
2. Cut the B779 orders even though the capital expenditure won't happen in two years or even longer.


When this crisis is behind us, the aviation industry will not be the same anymore. Growth may not come back for years, if ever. As such, I wouldn't even start thinking about topping up orders and runway expansions.
Good moaning!
 
reply1984
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 7:40 am

PepeTheFrog wrote:

When this crisis is behind us, the aviation industry will not be the same anymore. Growth may not come back for years, if ever. As such, I wouldn't even start thinking about topping up orders and runway expansions.


Runway expansion and fleet planning are long term projects compared to pandemic. Fullstop.
 
oschkosch
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 7:46 am

FluidFlow wrote:
The CX 777X order will be like the UA 350 order. Always on the books, never on the tarmac.



you could be right!
:stirthepot: :airplane: "This airplane is designed by clowns, who in turn are supervised by monkeys" :airplane: :stirthepot:
 
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PepeTheFrog
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 7:49 am

FrenchPotatoEye wrote:

But is has not happened, has it?

That's why they are talking. When it happens, we will know. Many talks happen and deals not materialize. Talk is cheap!!


You seem to be missing the point, so I'll try to provide an example.

When an airline signs a MoU or LOI, the deal is far from complete. Perhaps the deal will never get signed. Yet people like to discus the MoU and talk about future routes the airline might operate. This forum is full with that kind of discussions.

As such, we can perfectly discus why CX is in the progress of extending leases for another 10 77W aircraft.

Beyond that, not much to discuss. Let's see if they extend leases first. :)


The BOC deal was signed last month. The other lease deal is in progress.

Not sure why you keep ignoring the BOC deal.
Good moaning!
 
Geoff1947
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 7:50 am

GoSharks wrote:
SEPilot wrote:
And, being a Chinese carrier, they are also hit harder than most by the Coronavirus situation itself.

Since when has CX been considered a Chinese carrier?


Since 1997.
 
BrianDromey
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 8:07 am

reply1984 wrote:
Please tell me, which one is a better option?
1. Defer/cut A359/A35K orders to save cash in the near term, and adopt wait-and-see approach on B779.
2. Cut the B779 orders even though the capital expenditure won't happen in two years or even longer.


CX are likely doing both. However there will be penalties for delaying delivery from Airbus for aircraft already built, or in production. My understanding is that deposits secure slots on the line and progress payments are made as the aircraft is built. The final payment on delivery is not 100% of the purchase price. It’s not just the airframe, as maintenance and engines will have been purchased/leased/agreed too, based on a certain fleet size. So it may be cheaper to take these frames than cancel them.
The 777x on the other hand has been delayed by Boeing, CX will be due some compensation and/or flexibility on that order, as Boeing is the one who is altering the contract. CC may prefer not to take new aircraft in 2020/21 but the realities of financing long-term production facilities (aircraft) means they are committed.
 
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FrenchPotatoEye
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 8:08 am

PepeTheFrog wrote:
FrenchPotatoEye wrote:

But is has not happened, has it?

That's why they are talking. When it happens, we will know. Many talks happen and deals not materialize. Talk is cheap!!


You seem to be missing the point, so I'll try to provide an example.

When an airline signs a MoU or LOI, the deal is far from complete. Perhaps the deal will never get signed. Yet people like to discus the MoU and talk about future routes the airline might operate. This forum is full with that kind of discussions.

As such, we can perfectly discus why CX is in the progress of extending leases for another 10 77W aircraft.

Beyond that, not much to discuss. Let's see if they extend leases first. :)


The BOC deal was signed last month. The other lease deal is in progress.

Not sure why you keep ignoring the BOC deal.


I'm not interest in the boc deal since that has been done.

The other talks for 10 more extend leases is what being discussed sir. And of now, those extensions NOT happened. Doesn't matter on the talks until something concluded.

Talk is cheap. I'm not missing any points.
 
VSMUT
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 8:20 am

I wonder if this would be an outright cancellation, or perhaps a conversion to 787s? The value of 21 777-9s should amount to roughly the right amount of 787-10s to replace the remaining A330 fleet :bouncy:

reply1984 wrote:
2. If CX would like to cut orders, the first batch of victims is their A350 orders. They still have 4 A350-900s and 8 A350-1000s on order, and by their original schedule, these 12 birds will be delivered by 2021. And B777X is likely to be delayed to 2022. Cutting A350 orders is a more urgent task.


With a 2021 delivery timeframe, most if not all those A350s will already have metal cut. No manufacturer is going to let them back out of an order once they pass that point. See the recent EasyJet deferral: 2020 deliveries weren't touched at all. Adding a small handful of 12 planes to an existing fleet of 36 is anyway not as painful as adding a completely new type.

Sometimes your favorite OEM wins, sometimes they lose. That's how it has always worked. This isn't the first time we may see Boeing lose out due to the crisis, and there will be plenty of cases where Airbus loses out.
Last edited by VSMUT on Thu Apr 16, 2020 8:24 am, edited 1 time in total.
 
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PM
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 8:23 am

As well as the BOC frames, Cathay lease a fair number (8? more?) from BBAM. I assume that is the other lessor being referred to.

Airlines make - and change - their fleet strategy all the time according to market conditions. When Cathay ordered the 777x things were very different.

If they can get out of the deal, it would make a lot of sense for them to do so. Oil is cheap and the 77Ws can easily soldier on for another decade (or more) with a healthy fleet of A350s behind them.

Makes sense to me.
 
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BoeingVista
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 8:29 am

reply1984 wrote:

5. Don't forget the compatibility between B77W and B779.

Please tell me, which one is a better option?
1. Defer/cut A359/A35K orders to save cash in the near term, and adopt wait-and-see approach on B779.
2. Cut the B779 orders even though the capital expenditure won't happen in two years or even longer.


You guys crack me up, your argument seems to be that there is more compatibility between the 777W and 777-9 than the A350 and the... A350... :rotfl: :rotfl: :rotfl: :rotfl:

Defer A350, cancel 779. Its obvious that the market for the 777x has disappeared, unless you can fill it its a gas guzzler and nobody is going to be able to fill it.
BV
 
Opus99
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 8:49 am

When the 777x was launched the market outlook at the time was more demand and they were correct more people traveled just that instead of more people clustering to major hubs and then going long haul more demand for point to point travel increased meaning you didn’t really need that many big planes but there was still a business case. The 777x now hasn’t even had a chance to prove itself and quite frankly following the coronavirus and the general economic impact and especially on aviation it seems a bit irresponsible to be looking for an aircraft that size for the next 3-4 years.

A35K/77W is really the max I think airlines will be willing to go for now and the distant future and EVEN when demand does eventually come back I think it will remain that way to mitigate the risks. It’s sad because the aircraft didn’t really get to prove itself but for now I don’t think airlines really give a damn what it can and can’t do, that’s too expensive a bet to take right now or in the near future
Last edited by Opus99 on Thu Apr 16, 2020 8:54 am, edited 1 time in total.
 
FluidFlow
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 8:52 am

The 777X is by any means not a good choice from Boeing and for airlines. I never knew why it was even developed, especially after the A380 and the 747-8. Boeing shiftet the market with the 787 to light efficient WBs. Airbus countered with the A350 while letting the A380 rightfully die. Now Boeing only had two options: Let the A350 take the upper end of the WB market and keep the lower end with the 787 or build something even bigger on top of the A350 and hope it will be needed.

The result was a heavy, huge aircraft with too much capability on 99% of routes flown. It is build to a market that is tiny and now with the current crisis even smaller. Boeing would have been more than ok with only the 787 in the WB departement and all the money invested into the 777X could have been used to further improve the 787, increase MTOW and Range, or stretch it once more for more capacity. This was no option with the 777X launched because it would have cannibalized even more 777X sales.

It might start with CX but other airlines will follow to deferr or outright cancel 777X orders. There is no more market for it. A few might be build for BA (slot congestion means big aircrafts work) and LH (as they fly every aircraft ever build it seems) and maybe Emirates will also take a few. Still why buy an expensive, heavy and overbuild aircraft if you can almost get two perfect 787s.

I just can not see the reasoning behind it.
 
reply1984
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 8:56 am

BoeingVista wrote:

You guys crack me up, your argument seems to be that there is more compatibility between the 777W and 777-9 than the A350 and the... A350... :rotfl: :rotfl: :rotfl: :rotfl:



They need to train their A330 crew (if there are enough) for A350. It seems that it is much easier to make B77w crew ready for B779.
 
Opus99
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:00 am

FluidFlow wrote:
The 777X is by any means not a good choice from Boeing and for airlines. I never knew why it was even developed, especially after the A380 and the 747-8. Boeing shiftet the market with the 787 to light efficient WBs. Airbus countered with the A350 while letting the A380 rightfully die. Now Boeing only had two options: Let the A350 take the upper end of the WB market and keep the lower end with the 787 or build something even bigger on top of the A350 and hope it will be needed.

The result was a heavy, huge aircraft with too much capability on 99% of routes flown. It is build to a market that is tiny and now with the current crisis even smaller. Boeing would have been more than ok with only the 787 in the WB departement and all the money invested into the 777X could have been used to further improve the 787, increase MTOW and Range, or stretch it once more for more capacity. This was no option with the 777X launched because it would have cannibalized even more 777X sales.

It might start with CX but other airlines will follow to deferr or outright cancel 777X orders. There is no more market for it. A few might be build for BA (slot congestion means big aircrafts work) and LH (as they fly every aircraft ever build it seems) and maybe Emirates will also take a few. Still why buy an expensive, heavy and overbuild aircraft if you can almost get two perfect 787s.

I just can not see the reasoning behind it.

The reality was the 777X was an answer to emirates saying look we want a new 777 that’s more efficient and even bigger now coming from airline that operates over 100 A380s the 777x was tiny for them but not for the rest of us however they were prepared to order 150 and that alone was enough confidence to get the program going...but not enough to sustain it Clearly because Emirates have now backtracked a bit and will backtrack even further because they generate revenue from long haul connection traffic which will be low for the foreseeable future. Now at that point when Emirates is asking for that type of aircraft in those numbers the Boeing we know well and good will definitely build it.
 
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BoeingVista
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:00 am

reply1984 wrote:
BoeingVista wrote:

You guys crack me up, your argument seems to be that there is more compatibility between the 777W and 777-9 than the A350 and the... A350... :rotfl: :rotfl: :rotfl: :rotfl:



They need to train their A330 crew (if there are enough) for A350. It seems that it is much easier to make B77w crew ready for B779.


Total BS. A330/A350 is a single type rating
BV
 
VSMUT
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:01 am

reply1984 wrote:
BoeingVista wrote:

You guys crack me up, your argument seems to be that there is more compatibility between the 777W and 777-9 than the A350 and the... A350... :rotfl: :rotfl: :rotfl: :rotfl:



They need to train their A330 crew (if there are enough) for A350. It seems that it is much easier to make B77w crew ready for B779.


The A330 and A350 share the same type rating. They only need a short differences course. A simulator isn't even mandatory. Cathay should already have an established training program set up for this.
 
reply1984
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:02 am

BrianDromey wrote:
reply1984 wrote:
Please tell me, which one is a better option?
1. Defer/cut A359/A35K orders to save cash in the near term, and adopt wait-and-see approach on B779.
2. Cut the B779 orders even though the capital expenditure won't happen in two years or even longer.


CX are likely doing both. However there will be penalties for delaying delivery from Airbus for aircraft already built, or in production. My understanding is that deposits secure slots on the line and progress payments are made as the aircraft is built. The final payment on delivery is not 100% of the purchase price. It’s not just the airframe, as maintenance and engines will have been purchased/leased/agreed too, based on a certain fleet size. So it may be cheaper to take these frames than cancel them.
The 777x on the other hand has been delayed by Boeing, CX will be due some compensation and/or flexibility on that order, as Boeing is the one who is altering the contract. CC may prefer not to take new aircraft in 2020/21 but the realities of financing long-term production facilities (aircraft) means they are committed.


Obviously they will delay all deliveries for sure, but I will say they have more flexibility to adopt wait-and-see approach on their B779 order given to production delay by Boeing. At least now they don't have to rush to cancel their B779 order, while re-negotiation for their A350 order is more urgent.
 
reply1984
Posts: 55
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:03 am

VSMUT wrote:
reply1984 wrote:
BoeingVista wrote:

You guys crack me up, your argument seems to be that there is more compatibility between the 777W and 777-9 than the A350 and the... A350... :rotfl: :rotfl: :rotfl: :rotfl:



They need to train their A330 crew (if there are enough) for A350. It seems that it is much easier to make B77w crew ready for B779.


The A330 and A350 share the same type rating. They only need a short differences course. A simulator isn't even mandatory. Cathay should already have an established training program set up for this.


Points taken with thanks!
 
TC957
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:06 am

Defer A350, cancel 779. Its obvious that the market for the 777x has disappeared, unless you can fill it its a gas guzzler and nobody is going to be able to fill it.[/quote]
Maybe for the next couple of years or so, yes. Long term, I think it has a future. But with oil at current low prices, the need for more fuel efficient new expensive aircraft may not be as urgent as otherwise hence we will see more mainstream airlines keeping present fleets on extended lease deals.
 
Opus99
Posts: 819
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:06 am

reply1984 wrote:
BrianDromey wrote:
reply1984 wrote:
Please tell me, which one is a better option?
1. Defer/cut A359/A35K orders to save cash in the near term, and adopt wait-and-see approach on B779.
2. Cut the B779 orders even though the capital expenditure won't happen in two years or even longer.


CX are likely doing both. However there will be penalties for delaying delivery from Airbus for aircraft already built, or in production. My understanding is that deposits secure slots on the line and progress payments are made as the aircraft is built. The final payment on delivery is not 100% of the purchase price. It’s not just the airframe, as maintenance and engines will have been purchased/leased/agreed too, based on a certain fleet size. So it may be cheaper to take these frames than cancel them.
The 777x on the other hand has been delayed by Boeing, CX will be due some compensation and/or flexibility on that order, as Boeing is the one who is altering the contract. CC may prefer not to take new aircraft in 2020/21 but the realities of financing long-term production facilities (aircraft) means they are committed.


Obviously they will delay all deliveries for sure, but I will say they have more flexibility to adopt wait-and-see approach on their B779 order given to production delay by Boeing. At least now they don't have to rush to cancel their B779 order, while re-negotiation for their A350 order is more urgent.

Wait and see what? There’s nothing to wait and see the reality is unfolding in front of them and very fast and they’ve acted quick. They’ve taken those 77Ws for another 10 years and looking at extending more. They don’t have the money to wait and see then it’s becomes too late to back out without a penalty
 
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scbriml
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:14 am

reply1984 wrote:
BoeingVista wrote:

You guys crack me up, your argument seems to be that there is more compatibility between the 777W and 777-9 than the A350 and the... A350... :rotfl: :rotfl: :rotfl: :rotfl:



They need to train their A330 crew (if there are enough) for A350. It seems that it is much easier to make B77w crew ready for B779.


Cathay Pacific and Dragon have 56 A330s between them, so certainly no shortage of A330 crews. With common type rating between A330 & A350, all that's required is differences training. I'm not seeing too much of a challenge to be honest.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
Gremlinzzzz
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:17 am

reply1984 wrote:
BoeingVista wrote:

You guys crack me up, your argument seems to be that there is more compatibility between the 777W and 777-9 than the A350 and the... A350... :rotfl: :rotfl: :rotfl: :rotfl:



They need to train their A330 crew (if there are enough) for A350. It seems that it is much easier to make B77w crew ready for B779.
The A330 and A350 have the same type rating, and because they are not going to be taking all the planes at once, the differences training is not something that will bother CX or any other A330 operator.

Edit: Airbus was talking 8 days training to new equipment.

https://www.airbus.com/newsroom/news/en/2014/10/the-common-type-rating-is-approved-for-a350-xwb-and-a330-pilot-training.html
 
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BoeingVista
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:25 am

TC957 wrote:
Maybe for the next couple of years or so, yes. Long term, I think it has a future. But with oil at current low prices, the need for more fuel efficient new expensive aircraft may not be as urgent as otherwise hence we will see more mainstream airlines keeping present fleets on extended lease deals.


For it to have a future air travel needs to get to a higher level than today, thats going to need people to have jobs and money, I cant see air travel returning to 2019 level for a decade.

Also Boeing commercial needs to survive and have the x hundred million to certify the aircraft.
BV
 
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zkojq
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Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:29 am

Ishrion wrote:
Didn’t Cathay sell a few 77Ws to a leasing company or something?


They sent a couple of old 77Ws back to their lessors. B-KPB and B-KPG. My understanding is that more were about to be returned.

PepeTheFrog wrote:
As the A350 is already in the fleet, deferring would be the more logical option. Introducing a new airplane when the airline doesn't need the capacity for the coming years seems rather unlikely.


Indeed. Or they could be cancelling both.
First to fly the 787-9
 
FluidFlow
Posts: 667
Joined: Wed Apr 10, 2019 6:39 am

Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:30 am

Opus99 wrote:
FluidFlow wrote:
The 777X is by any means not a good choice from Boeing and for airlines. I never knew why it was even developed, especially after the A380 and the 747-8. Boeing shiftet the market with the 787 to light efficient WBs. Airbus countered with the A350 while letting the A380 rightfully die. Now Boeing only had two options: Let the A350 take the upper end of the WB market and keep the lower end with the 787 or build something even bigger on top of the A350 and hope it will be needed.

The result was a heavy, huge aircraft with too much capability on 99% of routes flown. It is build to a market that is tiny and now with the current crisis even smaller. Boeing would have been more than ok with only the 787 in the WB departement and all the money invested into the 777X could have been used to further improve the 787, increase MTOW and Range, or stretch it once more for more capacity. This was no option with the 777X launched because it would have cannibalized even more 777X sales.

It might start with CX but other airlines will follow to deferr or outright cancel 777X orders. There is no more market for it. A few might be build for BA (slot congestion means big aircrafts work) and LH (as they fly every aircraft ever build it seems) and maybe Emirates will also take a few. Still why buy an expensive, heavy and overbuild aircraft if you can almost get two perfect 787s.

I just can not see the reasoning behind it.

The reality was the 777X was an answer to emirates saying look we want a new 777 that’s more efficient and even bigger now coming from airline that operates over 100 A380s the 777x was tiny for them but not for the rest of us however they were prepared to order 150 and that alone was enough confidence to get the program going...but not enough to sustain it Clearly because Emirates have now backtracked a bit and will backtrack even further because they generate revenue from long haul connection traffic which will be low for the foreseeable future. Now at that point when Emirates is asking for that type of aircraft in those numbers the Boeing we know well and good will definitely build it.


If a call from Emirates is enough for Boeing to run towards an aircraft that had massive competition from A&B just to please one carrier and maybe pick up a few other orders, then Boeing had too much money to waste and did not learn from the 747 and the A380 at all.

Would Emirates have wanted a 777X if they would have gotten the A380neo? I would say no, they would have changed from 77W/A380 to 787/A380neo over time. Airbus pulled the plug on the A380neo and then the whole drama begun. Now after all the shenannigans and I bet halfe of the 777X wish from Emirates was just to piss Airbus off, Emirates will be stuck with old A380 that they cant fill, new 777X that they cant fill and will be forced to also fly/buy 787 and 350 from cancelling contracts if they do not outright want to lose money. All the cans are kicked down the road.

Sensible option now would be to scrap all the big aircraft orders and work towards a 787/A350 fleet and also see what Boeing comes up with for the market below the 787. If Boeing cant get something there get some A339. Use 787-9 and A359 on long routes, 787-10 and A35K on thick routes and press Airbus for some super cheap A339 for short thick routes.

CX should go down the same route. Simplify and shrink. Keep the 77W and work with the A330 and A350 for now. No need for a fancy 777X without demand.
 
Gremlinzzzz
Posts: 68
Joined: Fri Jan 24, 2020 4:28 am

Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:32 am

FluidFlow wrote:
The 777X is by any means not a good choice from Boeing and for airlines. I never knew why it was even developed, especially after the A380 and the 747-8. Boeing shiftet the market with the 787 to light efficient WBs. Airbus countered with the A350 while letting the A380 rightfully die. Now Boeing only had two options: Let the A350 take the upper end of the WB market and keep the lower end with the 787 or build something even bigger on top of the A350 and hope it will be needed.

The result was a heavy, huge aircraft with too much capability on 99% of routes flown. It is build to a market that is tiny and now with the current crisis even smaller. Boeing would have been more than ok with only the 787 in the WB departement and all the money invested into the 777X could have been used to further improve the 787, increase MTOW and Range, or stretch it once more for more capacity. This was no option with the 777X launched because it would have cannibalized even more 777X sales.

It might start with CX but other airlines will follow to deferr or outright cancel 777X orders. There is no more market for it. A few might be build for BA (slot congestion means big aircrafts work) and LH (as they fly every aircraft ever build it seems) and maybe Emirates will also take a few. Still why buy an expensive, heavy and overbuild aircraft if you can almost get two perfect 787s.

I just can not see the reasoning behind it.
It is hard to not see why Boeing thought that the aircraft should be built. There are a lot of 777 operators that they maybe thought would make a jump to the A350-1000, a plane that is built to compete and potentially offer an option to 777 operators should need more efficiency at similar capacity. Plus it is an airline that offered A380 operators, and operators in slot restricted airports added capacity.

I think that it has its place in the market when things are going well, and so long as an A350 Neo is still some ways off.
 
VRHNM
Posts: 119
Joined: Mon Mar 13, 2017 2:02 pm

Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:32 am

Geoff1947 wrote:
GoSharks wrote:
SEPilot wrote:
And, being a Chinese carrier, they are also hit harder than most by the Coronavirus situation itself.

Since when has CX been considered a Chinese carrier?


Since 1997.


All Hong Kong based carriers are subject to Hong Kong laws and policies which are independent of those in mainland China. Hong Kong based carriers were never subject to the restrictions that mainland carriers have been subjected to (e.g. 1 carrier per route, central aircraft purchasing). Hong Kong and mainland Chinese aircraft are even registered differently so I would say that CX and all other Hong Kong based carriers are Hong Kong carriers rather than 'Chinese', which implies mainland China.

Anyway back on the topic of the 779 and CX... Seeing how uncertain the rebound may be post-Coronavirus, I would think that dropping the 779s would be a good place to start. One factor that might differ from other regions for CX is that the local outbound tourism traffic should rebound relatively quickly as travelling is really ingrained in the culture of Hong Kong people. Of course, whether or not this is a factor large enough to support stronger traffic growth is debatable.
 
VSMUT
Posts: 4246
Joined: Mon Aug 08, 2016 11:40 am

Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:36 am

reply1984 wrote:
Obviously they will delay all deliveries for sure, but I will say they have more flexibility to adopt wait-and-see approach on their B779 order given to production delay by Boeing. At least now they don't have to rush to cancel their B779 order, while re-negotiation for their A350 order is more urgent.


And as I also noted, re-negotiating aircraft with such short notice is not going to happen. The 7 or so they are receiving this year will almost certainly happen as planned, leaving just 5 to maybe juggle about, if not too late already. They are past the point of "urgent" and into the "point of no return".
 
xwb565
Posts: 159
Joined: Sun Dec 02, 2018 1:01 pm

Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:37 am

Perhaps smartplane can guess the answer for this- what would allow CX to walk away from the 777x? the delays? or a not so firm launch customer contract?
 
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PM
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Joined: Wed Feb 09, 2005 5:05 pm

Re: Rumor: CX to walk away from 777X order

Thu Apr 16, 2020 9:41 am

I'm getting deja vu.

For how many years did posters here (including me) insist that the A380 had a future. Just wait and see. Give it time.

We know how that worked out.

Put it another way. Would Boeing launch the 777X today?

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