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Taiwan's China Airlines delays retirement of older aircraft due to Boeing 787 delay

The newly appointed chairman of Taiwan's China Airlines said that the airline is delaying the retirement of older aircraft because of delays in receiving Boeing 787-9 jets, which could result in compensation payments by the planemaker.

Taiwan's oldest carrier, founded in 1959, has been renewing its fleet. Last year, Boeing and European rival Airbus split an order worth nearly $12 billion in list prices for new long-haul planes.

China Airlines also ordered 24 Boeing 787s, including six 787-10s and 18 787-9s.

China Airlines Chairman George Kao has said that delays in delivering new aircraft, particularly the 787-9s, have hampered China Airlines' fleet replacement plan. The plan is to replace ageing Airbus A330s or Boeing 737-800s by 787-9s or A321neos.

"We are currently being severely impacted." "We are currently being greatly impacted."

Boeing hasn't given China Airlines a specific timeframe for the delays of the 787-9, but it has stated that deliveries will "basically start" from the end 2025. Kao, who was trained as a pilot and started her career as a flight attendant before becoming chairman in March, said.

When asked if China Airlines would seek damages, he replied: "This is in the contract."

Boeing is responsible for compensation if the incident occurs in the supply chain. If it is not in the supply chain, there will be no compensation. The contract will detail everything.

Boeing has not responded to our request for a comment.

Similar issues are also being faced by other airlines.

Willie Walsh is the Director General of International Air Transport Association, which represents all airlines in the world. He called this month's predictions about aircraft delivery delays for this decade as "outrageously unacceptable".

Kao, however, was optimistic about the expansion plans. He cited the fuel-efficient A350-1000s and 777-9s that were ordered last year, which will allow more capacity to be added on routes such as New York and London. And he also mentioned the new third terminal, of which the first section is expected to open this year, at Taoyuan Airport.

He announced that Mandarin Airlines would be adding more aircraft in the future. Mandarin Airlines currently flies ATR-72 turboprops on almost all domestic routes, but is now re-engineering its fleet to fly regional routes out of southern and central Taiwan using new jet aircraft.

He said he could discuss this with aircraft lessees, but refused to reveal the jet models that they might add. "We have a plan to let Mandarin Airlines develop."

Starlux Airlines, a rapidly-growing airline that has placed ten more A350s in its order last week, is also a competitor to China Airlines.

Kao stated that while the Taiwanese market was small, transit traffic - on which all three carriers are focused - meant that supporting three full service airlines was not a problem.

He said that the new terminal at Taoyuan Airport will improve travel experiences for passengers. The airport in Seoul, Incheon, is too large, and can be confusing. Tokyo's landing charges are also too high, while Hong Kong suffers from "political problems".

Many of our passengers are transit. Taiwan's central location connecting the Pacific with all of Asia is very convenient. Reporting by Ben Blanchard, Editing by Jamie Freed

(source: Reuters)