Cathay Pacific is in talks with Boeing and Airbus for B787 and A350 aircraft to replace ageing planes. The airline is favoring smaller long-range jets more suited for carrying cargo than Airbus A380 superjumbo and Boeing’s 747-8, the biggest airliner the Chicago-based company has ever built, CEO Tony Tyler said recently. “We have no plans at the moment to have a campaign on the A380 or on the 747-8 Intercontinental,” he said. “We’re talking to Boeing about 787s and to Airbus about A350s.”

Cathay also agreed recently to sell a HK$2.62 billion (US$336 million) stake in Hong Kong Aircraft Engineering Co. partly to help pay for new planes, including 33 due for delivery within four years. The airline is also building a cargo terminal in Hong Kong and buying a stake in affiliate Air China Ltd.’s freight unit to bolster its cargo operations.

“Cargo demand collapsed but it bounced back very well, very healthily and we fully believe in the long-term future as a business stream,” Tyler said according to Bloomberg. “We sit in a very lively aircargo market.”

Cathay’s outstanding orders include ten B747-8 freighters, eight Airbus A330s and two A320s for its Hong Kong Dragon Airlines Ltd. unit. The carrier also has 13 B777s on order. “It’s a great cargo carrier and has a huge belly and doesn’t have that many passengers,” Tyler said of the B777. “The A380 doesn’t have such a huge belly, and you’ve got 500- plus passenger bags to accommodate.”

The airline expects to win Chinese regulatory approval to buy 49 per cent of Beijing-based Air China’s cargo unit within months, Tyler added.