Cathay Pacific nears lease deal for 18 Airbus A321neos

Cathay Pacific Airways Ltd. is closing in on a deal to lease 18 of Airbus SE’s largest single-aisle aircraft to bolster its short-haul fleet, according to people familiar with the matter.

Hong Kong’s main airline is targeting delivery of the A321neo jets from late 2025 through 2027, one of the people said, asking not to be identified because the discussions are private.

Cathay is tapping lessors that already have orders on their books to get the planes faster than it would directly through Airbus. The European planemaker is nearly sold out of delivery slots for A320neo-family jetliners through 2029. Megadeals from Indian low-cost carrier IndiGo and others have swelled order books for Airbus and Boeing Co., spurring operators to turn to leasing firms to secure planes.

A deal for 18 jets would go partway toward fulfilling Cathay’s goal for securing leased planes. Bloomberg News reported in March that the carrier and its low-cost unit HK Express could source as many as 50 A320-family aircraft from lessors.

Cathay is in discussions with only a handful of lessors, the people said.

Cathay said in a statement that it continues to “invest in and grow our fleet with the addition of new, state-of-the-art and fuel-efficient aircraft. We have no specific updates or announcements to make at this time regarding the fleet.” Airbus declined to comment.

Cathay Pacific Group, which includes all-cargo carrier Air Hong Kong, operates a fleet of 225 aircraft. It originally ordered 32 A321neos that are split equally between Cathay and HK Express — 12 are flying for Cathay and one so far for its low-cost subsidiary. Airbus is the sole supplier for its single-aisle jets.

The airline group is committed to majpr investments in aircraft to renew and expand its fleet as it bounces back financially from its Covid nadir. The growth spurt is timed to coincide with Hong Kong International Airport adding a third runway, boosting capacity by 50% by the end of 2024 when construction is set to be completed.

The carrier is currently undergoing a review to replace its 43 Airbus A330 widebody jets, which are mostly used for short- and medium-haul flights around Asia Pacific, and adding more freighter aircraft.

Cathay CEO Ronald Lam said in a March interview that the carrier was assessing its options for new aircraft.

“We have replacement needs for the wide-body fleet and we have growth needs for the narrow-body fleet, and we will look at all options and make sure that we get the most suitable deals,” he said.