Mainland China is where the future lies for Cathay Pacific

How has 2007 fared for Cathay?
Since turning 60 years in September 2006, we have seen some dramatic developments at Cathay Pacific that are transforming the future of the airline.

It started with our integration with Dragonair and our cooperation agreement with Air China during the airline’s 60th anniversary, establishing an Asia and China footprint like no other, and providing many more network options to travellers. Since the integration with Dragonair, the Cathay Pacific Group combined network now covers 21 destinations in mainland China and over 120 destinations worldwide.
We expanded our fleet and network throughout the year. In November and December, the airline placed a direct purchase order of 25 aircraft valued at approximately $6.9 billion at list prices.
With the arrival of new Boeing 777-300ERs, it allows us to significantly increase our presence on ultra long haul services to North America.  A second daily non-stop flight to New York and San Francisco has been added respectively.  Services to other major truck routes including Vancouver, Paris, Melbourne, Adelaide, Perth, Tokyo, etc have been enhanced. Dragonair also introduced new services to Sendai and Fukuoka.

What are the company’s plans for 2008?
We have been seeing clear benefits from the integration with Dragonair and will continue to maximise synergy and growth potential arising from this landmark deal.
We will continue to demonstrate our commitment to grow the airline and strengthen Hong Kong’s position as a leading international aviation hub by investing in new products, adding more aircraft, growing our network and providing people with more services.
From January 1 this year, Cathay Pacific’s service from Hong Kong to Toronto, currently routed through Anchorage, will become a daily non-stop flight. Together with the three weekly flights with a stopover in Anchorage, this will take the number of flights to Toronto to 10 each week.
We will operate an extra flight each week between Hong Kong to Surabaya from February 1 2008, making a total of five flights per week. By March 2008, Cathay Pacific will offer three daily non-stop departures between Hong Kong and Vancouver.  
The airline currently operates 111 aircraft and has 55 other aircraft – 37 passenger aircraft and 18 freighters – on firm order. By 2012, taking into account retired aircraft and the return of leased aircraft, the airline will operate a total of 155 aircraft, while the Group’s fleet (including Dragonair and Air Hong Kong) will number 200 aircraft.

What is the company’s strategy in the face of competition?
Aviation remains one of the most fast moving and competitive businesses. It is imperative that our strategies are kept in tune with the changing landscape.
We will further enhance the airline’s position as a premium international carrier offering quality products and services to our passengers.
Our financial models indicate that we are better off offering more flight frequencies with a very efficient aircraft than adding more capacity to an existing frequency.

Is Cathay bullish about 2008? If yes, why?
We are fully committed to strengthening our fleet and expanding our services as we move forward, helping to further cement Hong Kong’s position as one of the world’s premier aviation hubs and a major gateway to mainland China. 
China is a huge market with the enormous potential for growth. China’s economy is growing at more than nine per cent annually, and last year the number of passengers passing through the country’s airports jumped by 17 per cent to 332 million.
Aviation is expected to grow at an average of 14 per cent a year until 2010. The mainland of China is where the future lies, and we are perfectly positioned to take advantage of that through Cathay Pacific/Dragonair synergies and our growing strategic and financial relationship with Air China.

What can travellers look forward to in the New Year?
More and more of our passengers will be able to enjoy a brand-new flying experience with Cathay Pacific when more aircraft are fitted with the new seats and cabin features in three classes.
Additional frequencies and enhanced services to Toronto and Vancouver, etc will provide greater flexibilities and more travel options to our passengers.

What will be the biggest challenges facing you in the Middle East in 2008?
With increasing awareness about environmental issues, concern about climate change is one of biggest challenges. Fuel costs remain a worry as jet fuel prices continue to rise. And with consumer behaviour and expectations changing, there is even tougher competition among traditional carriers.
We also need to look at the emergence of newcomers and other low cost carriers which are operating different business models. But we welcome competition – it’s good for all of us.
The Middle East has witnessed appreciable growth in recent times with new developments taking place all over the region. Our services to Dubai, Bahrain and Riyadh have been performing well and there is a range of products available for passengers, including our popular Hong Kong SuperCity packages. South East Asian destinations have also been in great demand.
Our focus is clearly to continue to provide what our customers expect of us - in terms of service levels, a range of leisure destinations, convenient schedules and improved passenger choice.
Our commitment to the region is as strong as ever and the possibility of adding capacity to meet increasing market demand may be looked into.