Cathay Pacific boss accuses suppliers of overcharging airlines

Sep 8, 2009, 10:00 GMT

   Hong Kong - The chief executive of flagship Hong Kong airline Cathay Pacific Tuesday accused suppliers of aircraft components of overcharging.

   Tony Tyler, whose airline recorded its first quarterly loss since 2003 earlier this year, claimed on behalf of airline operators, 'Everyone else along the value chain is doing very well at our expense.'

   In a speech to the Asian Aerospace International Expo and Congress in Hong Kong, Tyler appealed to suppliers of aircraft seats and other components to stop hiking prices while airlines were suffering.

'We are all in this crisis together but you wouldn't believe that from the way many of the suppliers to the airlines conduct business with us,' he said.

   The Cathay Pacific boss said he was aiming his remarks directly at airframe, engine, parts, component and interiors suppliers present at the three-day event, Asia's biggest civil aviation showcase.

   'I am always astonished when I hear how much what you sell us costs,' 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 said escalation clauses in contracts with suppliers enabled them to keep raising the prices of products they sell to airlines.

'It's absurd to expect an industry which is estimated to be going to lose around 9 billion US dollars this year to keep paying higher costs for the same thing. There has to be a closer alignment in future between the interests of airlines and suppliers,' he said.

   The Asian Aerospace International Expo, held every two years, runs until Thursday. It has 356 exhibitors, more than 200 less than in 2007, and is expected to draw 10,000 guests over the three days.