Cathay boss lashes out at suppliers

CATHAY PACIFIC       BOEING       AIRBUS

Hong Kong - Cathay Pacific CEO Tony Tyler lashed out at aircraft and parts suppliers Boeing and Airbus for their price increases in spite of difficult trading conditions.

Tyler was speaking at the Asian Aerospace International Expo and Congress, during which he expressed discontent at part manufacturers' insistence to hike prices during the downturn.

"I am always astonished when I hear how much what you sell us costs. Big things, small things, seats, engines parts of all kinds - how can they be so expensive?" he said. "The result is that a premium seat and its furniture costs more than a top-quality sports car. If our passengers only knew what some of our costs were, there would be no complaints about the costs of premium fares."

Tyler urged members in the industry to work closer together in the face of a continued turbulent trading environment in which the International Air Transport Association (IATA) predicted full year losses of US$9 billion.

"It's absurd to expect an industry which is estimated to be going to lose around US$9 billion dollars this year to keep paying higher costs for the same thing," he said, adding that suppliers were keeping prices high and "making good profits even in these dark recessionary days".

However, Laurent Rouaud, Airbus' senior vice president of market and product strategy told the delegates that the price increases were necessary to "ensure that we are going to provide a better type of aircraft" to meet future challenges. These include more fuel-efficient aircraft.

Tyler also marked Boeing and Airbus down for their order delivery delays. "I'd have more sympathy for suppliers if they provided the sort of on-time performance our customers expect from us. But they don't even do that," he said.

"I'll try to be even-handed: the world's two leading aircraft manufacturers have had well-publicised problems with aircraft delays," he said.

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