Asia-Pacific Airlines Sustain Order Momentum

After pruning out older aircraft during the pandemic, many Asia-Pacific airlines are placing large orders to rebuild their fleets with new-generation models that will form their operational backbone for many years to come.

These moves ramped up in 2023, with several airlines in the region signing major aircraft deals. More are expected this year as multiple carriers are preparing to place widebody and narrowbody orders.

• Major deals are pending this year following 2023’s order boom
• Massive orders from Indian airlines have boosted sales

A primary driver is fleet renewal, but some airlines are also looking to grow or shift focus to take advantage of opportunities they see in a changed industry environment. And a few startup carriers have ambitious plans to scale up their fleets quickly to challenge incumbents.

Among the airlines planning to place orders this year are Cebu Pacific, Malaysia Airlines, Thai Airways and Cathay Pacific. Others that have been less forthcoming about their plans will also no doubt emerge as 2024 progresses.

One of the largest impending orders is likely to come from Philippines-based Cebu Pacific. The carrier revealed last year that it was considering an order of up to 150 narrowbody aircraft.

Cebu issued a request for proposal (RFP) and is now holding negotiations with manufacturers. In early January, the carrier said it will make a decision on the order in the first half of this year.

The Cebu Group currently operates 79 aircraft. These comprise 55 Airbus narrowbodies, eight A330/A330neos and 16 ATR 72 turboprops flown by subsidiary CebGo. Cebu already has 38 aircraft on order, and the group intends to boost its fleet to 91 by the end of 2024. These near-term deliveries will be for replacement and growth, as Cebu is transitioning its narrowbody fleet from A320-family aircraft to A320neos and A321neos.

Cebu’s longer-term plan is for the new orders to double its fleet size by 2035. This reflects the carrier’s confidence in market growth opportunities in the Philippines and the broader Asia-Pacific region, Cebu says. Airport development plans in Manila and elsewhere in the country should help support demand growth.

Malaysia Airlines is also planning to place a significant order this year, primarily to complete the second half of its narrowbody refresh program. The airline tells Aviation Week it expects to issue an RFP during the first quarter.

The carrier previously ordered 25 Boeing 737 MAX aircraft via a lessor to begin the process of replacing its fleet of nearly 50 737-800s. The first of the MAXs was delivered in November after multiple delays.

Despite the selection of MAXs for the earlier order, Malaysia Airlines CEO Izham Ismail stresses a range of manufacturers and aircraft will be considered for the follow-up. Numbers have not yet been finalized, but the narrowbody order is likely to be at least as large as the first one, and the airline may also add more widebody orders to its backlog.

In addition to the 737s, Malaysia Airlines operates 23 A330s and seven A350-900s. It has orders in place for 20 A330neos to replace the A330s, with first delivery planned for the third quarter of this year.

The carrier aims to have about 50 widebodies and 50 narrowbodies operational by 2035, representing a jump in the widebody fleet in particular.

Cathay Pacific intends to take another major step in its fleet renewal process by ordering aircraft to replace the widebodies it uses on medium-haul routes within the Asia-Pacific region. These are primarily A330s, as well as some of its older Boeing 777s.

Cathay executives have confirmed that the medium-haul widebody order is under consideration, although they have given few details as to the size and timing of such a deal.

The carrier operates more than 40 A330s, which have an average age of 15 years. Cathay is intending the new aircraft to be for growth as well as replacement, which will allow it to take advantage of opportunities offered by the expansion of Hong Kong International Airport.

The medium-haul widebody order is the third phase in Cathay’s post-pandemic fleet renewal initiative. The carrier began this process last September, when it announced orders for 32 A320neo-family aircraft to continue the refresh of its narrowbody fleet.

Cathay also ordered six A350Fs in December, with purchase rights for an additional 20. This signals that the A350F will eventually be its primary freighter type. The carrier currently operates a mix of Boeing 747-400ERFs and 747-8Fs in its freighter fleet.

With the narrowbody and freighter needs taken care of, Cathay can now focus on the medium-haul widebody fleet, Cathay Chief Customer and Commercial Officer Lavinia Lau recently told Aviation Week.

The carrier already had orders in place for 21 777-9s that will cover its long-haul passenger fleet replacement requirements for the medium term.

Thai Airways appears to be finally getting close to announcing sizable deals for widebody and narrowbody aircraft. The carrier is preparing to reveal orders for about 70 widebody aircraft in February, an industry source tells Aviation Week.

At least some agreements have already been reached. A firm order for 45 787s listed by Boeing under an undisclosed customer is likely for Thai Airways, Aviation Week has learned. It is not clear whether the overall total of 70 would also include options and purchase rights. A separate order for narrowbody aircraft may come later.

The carrier has been talking about its desire to place orders for the past several months, with signals about order size varying. CEO Chai Eamsiri said last June that Thai was aiming to place firm orders for about 30 widebody aircraft, although it now looks as if the order will be larger.

Fleet renewal arrangements are long overdue for Thai Airways. The carrier has had no orders on its books for years, and the state-owned airline has struggled to gain government approval for fleet deals due partly to poor financial results.

The need for replacement orders was heightened by Thai’s decision to phase out several of its older aircraft as part of a restructuring initiative during the pandemic years. It has since been trying to provide short-term capacity gains by leasing additional widebodies, including A350s. However, it still needs to place orders to meet its long-term strategic goals.

Thai currently operates 20 A320s, three A330s, 16 A350-900s, 22 777s and eight 787s in its passenger fleet.

A few other large orders that were pending in late 2023 have been announced or confirmed by Asia-Pacific carriers in the early weeks of 2024.

Taiwan’s EVA Air confirmed an order for 18 A350-1000s and 15 A321neos on Jan. 9, after stating its intention to do so in a November stock market filing. The move more than triples the number of aircraft the carrier has on order.

The A350s are expected to be used to replace EVA’s 777s, although delivery dates have not been announced. The carrier currently operates 34 777-300ERs.

EVA also operates four 787-9s, 11 787-10s and 12 A330s in its widebody passenger fleet. It still has 15 787s yet to be delivered, which are its only other firm orders for passenger aircraft. On the narrowbody side, EVA has 18 A321s.

New Indian low-cost carrier (LCC) Akasa Air announced a massive order for 150 737 MAX aircraft on Jan. 18. The deal was revealed at the Wings India event in Hyderabad, although it had been officially placed in December and listed by Boeing as an undisclosed customer.

Akasa started operations in August 2022, after placing an initial order for 72 737 MAX aircraft in 2021. It followed this up with an additional order for four MAXs in June 2023 and now the latest order.

The carrier operates 22 aircraft and is due to take delivery of the remaining 204 over the next eight years. Akasa has said it intends to boost its fleet to 40 aircraft by March 2025.

According to the Aviation Week Network Fleet Discovery database, Akasa’s order backlog comprises 103 737-8-200s, 99 737-10s and two 737-8s. Akasa says it is on track to be the first Indian carrier to achieve an orderbook of more than 200 aircraft within 17 months of starting operations.

The airline increased its fleet to 20 aircraft relatively quickly, as this is the minimum number required by the Indian government for carriers to operate international flights. Akasa is preparing to launch international routes this year to Middle East and Asian destinations.

Akasa’s forthcoming deliveries “will help us bolster the strength of our operations as we expand our footprint and foray into international skies in the very near future,” CEO Vinay Dube says.

The latest Asia-Pacific order activity follows what was a very busy 2023 in terms of new aircraft deals.

There were 5,305 widebody and narrowbody passenger jets on order by Asia-Pacific airlines in January 2019, according to the CAPA – Center for Aviation database. In January 2023, the backlog had declined to 4,879.

However, by the end of 2023, the number of aircraft on order had increased dramatically to 5,976—well ahead of the pre-pandemic total as well as the backlog at the beginning of 2023.

Narrowbody types dominate orders in the Asia-Pacific region. The accompanying chart shows that 46.8% of orders are for Airbus narrowbodies, with 25.6% for Boeing narrowbodies.

Indian carriers were a big contributor to the rise in Asia-Pacific orders during 2023—even before the Akasa commitment announced in January of this year.

Air India signed agreements with Airbus and Boeing in February 2023 to order a combined 470 aircraft. The Airbus orders comprise 140 A320neos, 70 A321neos, 34 A350-1000s and six A350-900s. From Boeing, Air India ordered 190 737 MAXs —including both the -8 and -10 versions—20 787-9s and 10 777-9s.

In addition to these orders, the airline has secured purchase rights and options with both manufacturers that could convert to 370 aircraft orders over the next decade. If all of the options are exercised, it would push the total to 840 aircraft.

Such numbers dwarf the current Air India fleet size. The carrier has 127 aircraft in service, according to the Aviation Week fleet database. However, the total rises to 257 when including the other airlines controlled by Air India’s parent Tata Group: Vistara, Air India Express and AIX Connect.

While the majority of the new orders are scheduled to be delivered starting in 2025, some of the 737-8s and A350-900s have already begun arriving. The first of the Air India A350s was delivered in December and entered commercial service on Jan. 22. It will initially operate domestic flights for crew familiarization before switching to long-haul routes.

Indian LCC IndiGo placed an even larger order in June, signing up for 500 A320neo-family aircraft. Combined with its existing commitments, this expanded the carrier’s orderbook to almost 1,000 aircraft. IndiGo currently operates 275 jets.

IndiGo leased four 777-300ERs in 2023, and the carrier may look to order new widebody aircraft to supplement or replace them.

The mammoth orders by Air India, IndiGo and Akasa—together with previous commitments from other Indian carriers—mean more than 1,800 aircraft are destined for India. This highlights the industry’s belief in the potential of the Indian market. India overtook China last year as the world’s most populous country, although it still has far less air service per capita.

Other Asia-Pacific airlines placed significant orders last year, albeit not on the same scale as the Indian carriers.

Qantas announced commitments for additional widebodies in August. They comprised four 787-9s and eight 787-10s, which are due to begin arriving in the fiscal year beginning July 1, 2026, and 12 A350-1000s for delivery starting the following year.

These aircraft are primarily intended to replace Qantas’ 27 A330s on international routes, although their different sizes will allow greater flexibility in how they are used. In addition to the firm orders, the carrier secured purchase rights for A350s that will be used to replace its A380s starting around 2032.

Qantas already has 12 A350-1000s on order in ultra-long-range configuration for its Project Sunrise flights, which are due to begin in late 2025. It has 14 787-9s in its fleet from previous orders.

Philippine Airlines (PAL) ordered nine A350-1000s in June, for use on European and U.S. routes. The aircraft are due for delivery in the second half of 2025 and will likely replace PAL’s 777s. PAL currently operates two A350-900s in its widebody fleet, as well as 10 A330s and nine 777-300ERs.

Also in June, China Airlines ordered eight 787-9s, boosting its backlog of 787-9s and -10s to 24 aircraft. It operates 10 777-300ERs, 14 A350-900s and 18 A330s in its passenger fleet.

There was also a lot of activity in the narrowbody market in 2023. Hong Kong-based newcomer Greater Bay Airlines established its long-term fleet with an order for 15 737-9s announced in March. The LCC began service in 2022 and operates a fleet of five 737-800s.

In the same month, Japan Airlines confirmed orders for 21 737-8s, which will begin the replacement of its 42 737-800s.

Korean Air revealed in October that it was adding 20 more A321neos to its order backlog. The carrier had already ordered 30 A321neos, of which nine have been delivered so far.

An emerging competitor to Boeing and Airbus also gained narrowbody orders in 2023, with China’s Comac signing new deals to boost the backlog for its C919 model.

China Eastern placed an order for 100 C919s in September. The carrier already operates four C919s since its first delivery entered service in May. China Eastern also has about 100 A320neo-family aircraft and 12 737 MAXs on order. It operates more than 380 Airbus and 80 Boeing narrowbodies, so the carrier has a large potential replacement need.

Hainan Airlines Group signed a purchase agreement for 60 C919s in April, which will augment its existing orders for about 50 737 MAXs.

So far, the vast majority of C919 orders have come from Chinese airlines. However, lessor AerCap has ordered 20, and proposed Brunei startup GallopAir has announced its intent to order C919s when it launches operations.

The volume of orders by Asia-Pacific airlines in 2023 provided one of the best indications that the industry has moved its focus firmly back to investment and fleet refresh after the financial challenges of the pandemic years. The early indications are that this momentum will continue in 2024.

There are still concerns that must be addressed about whether workforce and infrastructure can be expanded to match the increase in aircraft numbers, but despite this, industry confidence in the long-term growth potential of this region remains high.