CAL pens agreement with Airbus to revamp medium-range fleet

This article was written by Liu King-pong and published by the Taiwan Journal on January 4, 2008. It reports that the China Airlines (CAL) in Taiwan recently decided to sign an agreement of intent with the France-based Airbus to purchase 20 A350-900 passenger jets. Fourteen of the planes, scheduled to be delivered between 2015 and 2020, will be custom built, with the remaining six aircraft made according to standard specifications.

According to CAL, its procurement plan was based purely on commercial considerations, which will meet the company's demands for "a splendid aircraft fleet with a focus on sturdy operations all around". CAL representatives recently announced that the company will choose either the Airbus A380 or Boeing 747-8 when it comes to revamping its fleet of long-range, high-capacity passenger jets.

According to this article, CAL has a budget of US$4.2 billion for purchasing the new fleet. However, industry experts expect that CAL will only need to pay half that amount to acquire the long-range, medium-capacity aircraft, due to a 40- to 50-percent discount offered by Airbus.

As of December 2007, Airbus had received 149 orders for A350-900 jets from airliners around the world. According to this article, the A350 series will be equipped with new-generation, high-performance Trent1883 turbo engines developed by the U.K.-based Rolls-Royce Plc. This will be the first time that CAL has incorporated such a product into its fleet. Rolls-Royce engines are used comprehensively by Asia's major airlines, including Cathay Pacific Airways and Singapore Airlines.

According to CAL, the company's core values have always been safety, discipline, service, innovation and teamwork. It is hoped that the new aircraft will help renovate CAL's fleet and enhance its operating efficiency, as the company furthers its goal of boosting Taiwan's role as a regional transport hub in the Asia-Pacific.

Other industry experts point out that CAL's decision to purchase the aircraft from Airbus is a sound strategy to enhance its fleet capacity. If CAL can be offered a good deal for the new planes, after trading in six aging A340-300 aircraft, then its prospects of establishing a modern fleet of long-haul aircraft will be very promising.

The CAL-Airbus deal includes 14 firm orders with an option for a further six aircraft. Every plane has a maximum capacity of approximately 366 seats, which is more than CAL's existing A340 and A330 aircraft.

Currently, CAL's fleet is made up of 68 aircraft, including 48 passenger aircraft and 20 cargo planes. These consist of 15 Boeing 747-400s, 11 Boeing 737-800s, six Airbus A340-300s and 16 Airbus 330-300s. The average age of every plane is approximately five years.

For cargo operations, CAL currently deploys the largest fleet of Boeing 747-400F aircraft in the world. According to statistics compiled and released in December 2007 by the Canada-based International Air Transportation Association, CAL was ranked 21st and 6th in the world for volume of passenger and cargo services, respectively, in 2006.

CAL will aim for US$4.02 billion in sales for 2008, representing an increase of US$310 million from 2007's projected earnings of US$3.71 billion.