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UPDATE 2-Cathay favouring Airbus for widely watched freighter deal - sources

(Adds Cathay Pacific comment in paragraph 3)

Nov 27 (Reuters) - Cathay Pacific Airways Ltd is leaning towards placing an order for around six Airbus A350 freighters as the Hong Kong carrier renews the oldest section of its fleet of dedicated 747 cargo jets, industry sources said.

If confirmed, the selection marks a bounce back for the Airbus freighter after Cathay earlier this year appeared to favour the competing Boeing 777-8F, before postponing a decision for several months, said the sources, speaking on condition of anonymity to discuss confidential matters.

"We will continue to evaluate what potential new-generation freighters may provide additional capacity and generate value for our customers and shareholders, and we remain open to all possibilities," a Cathay Pacific spokesperson said by email.

Airbus and Boeing had no immediate comment.

Cathay's decision on where to place bets for the next phase of its cargo development has been seen as a key test for the two freighters because the airline operates the underlying 777 and A350 passenger models.

Airbus and Boeing have been battling hard for the business of one of the world's top five freight airlines, which has been comparing the all-freight version of the future Boeing 777X jet family with an upcoming cargo model of the existing Airbus A350.

Cathay Pacific is the world's fifth-largest air freight carrier and the third-largest traditional freight airline behind Qatar Airways and Emirates when specialist express parcel carriers FedEx and UPS are excluded, according to latest available data from the International Air Transport Association.

Industry sources have said the competition pointed to an initial purchase of around half a dozen aircraft, worth some $2 billion at list prices before traditional airline discounts.

Cathay Pacific told analysts in August it was looking at freighters and "continuing to study various opportunities".

On Friday, it told analysts cargo demand had softened but was "still much higher than pre-pandemic times". (Reporting by Tim Hepher and Valerie Insinna Editing by Lincoln Feast and Mark Potter)

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