Air China taking wait-and-see attitude on A380
BEIJING, July 23 |
BEIJING, July 23 (Reuters) - Air China Ltd. is sticking to a wait-and-see attitude on ordering Airbus' much delayed A380, but expects a large ramp-up in lucrative international routes once it starts adding Boeing Co. (BA.N) 787s next year, executives said.
Beijing-based Air China (0753.HK)(601111.SS) has ordered 15 of the 787s, part of a fleet expansion and modernisation programme, but has held off on the giant A380, finally expected to enter passenger service with Singapore Airlines (SIAL.SI) in October.
"We must wait and see how it performs in other airlines," Air China Senior Vice President Song Zhiyong told a small group of foreign reporters on Friday, in comments embargoed until Monday.
"It's been delayed for a long time," added Board Secretary Huang Bin.
Airbus, a unit of EADS (EAD.DE)(EAD.PA), has won 165 orders for the A380, whose delivery was delayed for around two years due to manufacturing problems. Only five were from China's rapidly growing market, for China Southern (1055.HK) (ZNH.N) (600029.SS).
Air China, which in the last year or so has spread its wings to India, Spain and Brazil, will keep adding cities to its global network, especially in Europe and North America, as the 787 starts entering service, said Zhang Lan, who oversees sales.
"The Brazil route has performed much better than we expected," she said.
The airline even wants to fly to isolated North Korea's capital, Pyongyang, Zhang added. North Korean flag carrier Air Koryo currently offers the only scheduled services to the city, although China Southern flies the route intermittently.
Once Air China -- partly owned by Hong Kong's Cathay Pacific Airways Ltd. (0293.HK) -- joins the Star Alliance, new sources of revenue will be opened up, she added.
"We're preparing for formal entry by the end of the year," Zhang said.
But the carrier is not looking to set up either a low-cost or a regional unit, a model which some of its other global rivals have tried.
"We will cook our own food properly first," said He Li, vice president in charge of engineering. "If we try to cook everything all at once, the result will not be good."
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