Hong Kong Airlines May Scrap All of Its A380 Orders

   By Joanne Chiu 
 

HONG KONG--Regional carrier Hong Kong Airlines Ltd. may scrap all of its orders for Airbus A380 superjumbo jets as part of its effort to focus on short-haul routes.

The carrier has already scaled back an initial order for 10 A380s to "not more than five," and is in talks with Airbus about either dropping the remaining orders or switching to another type of aircraft, Hong Kong Airlines President Yang Jianhong told Dow Jones Newswires on Thursday.

The carrier could opt for smaller A330 or A350 widebody aircraft instead, and the discussions "could leave us without a single A380 on order," he added.

Airbus, a unit European Aeronautic Defence & Space Co. (EAD.FR), said Thursday it doesn't comment on commercial discussions with customers.

Hong Kong Airlines has been seeking to break the dominance of bigger rival Cathay Pacific Airways Ltd., but intensifying competition and high fuel costs have forced it to stop operating long-haul flights and focus mainly on regional flights to China and other parts of Asia.

The carrier operates more than 20 Boeing and Airbus jets and serves short-haul routes between Hong Kong and other leisure destinations in Asia, including Thailand's Phuket, China's Sanya and Japan's Osaka.

Hong Kong Airlines is backed by China's HNA Group Co., which also controls China's fourth-largest carrier, Hainan Airlines Co.

The airline's discussions with Airbus come as other Chinese carriers have recently begun placing new orders with the European company. An earlier dispute between the European Union and China over the E.U.'s plans to impose carbon taxes on airlines flying to or through the euro zone had led to a lull in aircraft orders from Chinese carriers. The E.U. in mid-November said it would delay implementation of the tax for a year.

In recent weeks, Airbus has sealed 70 aircraft orders from China Eastern Airlines Corp. and China Southern Airlines Co. worth US$7.27 billion at list prices.

Write to Joanne Chiu at [e-mail]

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