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HongKong - Hong Kong's de facto flag carrier Cathay Pacific is reportedly in talks with Boeing to convert its 777X order to 787-10 the largest variant of the Dreamliner family.

The move of the airline would be consistent with a desire to reduce capital expenditure amid the ongoing COVID-19 pandemic, sources who are close to the matter say.

Since the virus outbreak and the global travel restrictions hit the industry severely, airlines around the world struggling with the near-complete collapse. The operators have been increasingly delaying and canceling deliveries.

“Cathay is a valued and long-standing partner and we will work to continue supporting their fleet and operational requirements. Conversations with our customers are private and as a matter of rule we don’t comment on speculation,”

A Boeing spokesperson said.

Cathay Pacific placed an order for 21 Boeing 777X in late 2013. They are expected to join the Asian carrier's fleet between 2021 and 2024.

Boeing has so far received 309 orders for the 777X family from several airlines including Emirates, Qatar Airways, and Lufthansa. However, the 777X has been dogged by production and testing delays, and lockdowns from COVID-19.

“A combination of order conversions and delivery deferrals is the likeliest outcome. There aren't that many orders for the 777X, and there aren't that many customers. Losing Cathay would be a blow, but given HK's pre-Covid traffic issues, Boeing had probably prepared for this contingency,”

Richard Aboulafia, an analyst at aviation consulting firm Teal Group, said.

Cathay and its home airport were some of the first and worst to be hit by the pandemic. Given the slowdown in international travel and warnings that a fully-fledged recovery might not come until 2023, Cathay’s need for so many planes enabled for long hauls is likely to be reduced.

By the start of 2025, however, Hong Kong’s airport expansion will be complete and Cathay will need to begin renewing its regional aircraft fleet, which includes more than 50 Airbus A330s and 12 high-density Boeing 777s.

Emirates has the largest order for 777Xs with 115 copies, down from 150 that was previously ordered. The carrier converted 30 orders for an equivalent number of 787s last year.

Lufthansa, another major 777X customer is also said to negotiate with Boeing to convert its 777X orders to 777F since the passenger traffic is not expected to return pre-outbreak levels for years.

Also read: Lufthansa to Convert Boeing 777-9 Orders to 777F

There was recent speculation that Cathay might cancel its order altogether, but that would risk losing significant payments made upfront through pre-delivery payments for each aircraft. With Cathay’s first 777-9 delivery about 18 months from delivery, well-informed industry sources said Cathay could have paid for up to 50 percent of that aircraft already.

Boeing has also been grappling with hundreds of cancellations for its much-troubled 737 MAX jet after two fatal crashes within five months. The company was also poised to cut the number of 787 planes it produced by half, from 14 a month to a single-digit rate, and announce job cuts when it disclosed first-quarter earnings next week.

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