Along with Singapore Airlines, Cathay Pacific is one of the models of successful Asian aviation. The Hong Kong-based airline has been an integral part of the aviation history of the British colony and then the financial metropolis. The carrier is one of the oldest in Asia, having celebrated its 70th anniversary in 2016. The two carriers are models of management: Cathay Pacific has only posted losses twice in its history, compared with just once for SIA - in 2012/13 - over a period of 20 years.
However, Cathay Pacific has to contend with the onslaught of Middle Eastern airlines, which have a strong presence in Hong Kong. There are six carriers from this region at the Cathay hub (Emirates, Etihad, El Al, Qatar Airways, Royal Jordanian, Saudi Arabian), to which we can add Turkish Airlineswhich competes in the same market segment.
The Hong Kong-based airline is now at a turning point. While Cathay continues to thrive on long-haul routes - notably Europe and North America - the carrier is in the process of difficult position on the regional. In 2016, its passenger traffic grew by just 0.8%, while total passenger traffic at its Hong Kong hub was up by 2.9%. The Cathay group now has a market share of just 48.7% at the Chinese airport.
For the third time in its history, Cathay could record a loss, according to financial analysts' estimates. This is mainly due to its decision to consolidate its oil purchases on a very long-term basis, with a four-year hedge. The hedge has since been halved, but the Hong Kong company accumulated losses with the fall in oil prices from 2014 to 1016.
Cathay Pacific Group at the end of 2016:
|
In fact, the airline is losing points on the network Asia in the face of the growing power of low-cost and hybrid airlines. The change from Dragonair to Cathay Dragon will therefore help the group to consolidate and harmonise intercontinental and regional networks, strengthening the Hong Kong hub. For example, from March, Cathay Pacific will transfer one of its two daily flights to Kuala Lumpur à Cathay Dragon. Pending its complete withdrawal from the route by 2018. Other regional flights should follow, under the leadership of Cathay Dragon, an essential element in the reconquest of local markets.
Low-cost air transport is gradually nibbling away at market share in Hong Kong, even if its influence in the former British colony remains modest: 6% of the total number of passengers, with a dozen airlines present on the hub, well behind the 45% of Kuala Lumpur or the 25% of Singapore. But every year, low-cost air travel makes progress, and Cathay Pacific could in the medium term position itself in this niche, as Singapore Airlines did in its day. The competition could gain strength once the third track inaugurated on theHong Kong airport by 2024. With the expansion of Terminal 2The infrastructure will be able to handle an additional 30 million passengers.
the biggest restructuring exercise of the last two decades
Cathay is losing passengers in the premium segment due to intense competition. Its management has therefore decided to set up a restructuring plan on 18 January last, in order to preserve its competitiveness. The company has announced drastic cuts in staff numbersand the reorganisation of its general management. According to those in charge, the move is the " the biggest restructuring exercise of the last two decades".. " 2017 will be a year of significant change in an increasingly complex aviation landscape. competitive "says the carrier in an official press release. Management is targeting the local market, while connecting traffic is stagnating. Hence the probable need to offer more competitive prices in the face of low-cost competition.
The carrier wants to set up a lighter hierarchical structureThe first measures of this change are due to take place in the middle of the year. It would appear that the biggest changes are to be expected in the administrative area, as the carrier continues to develop its network and services. The arrival of a dozen new Airbus A350s will provide greater flexibility in managing the network, with the possibility of opening lines to other countries. secondary destinations. New destinations in the Pacific (Canberra, Wellington), Europe (Geneva or Hamburg for example) and on the North American continent. In addition to the new flight on Barcelonathe company has confirmed the opening of Tel Aviv and an increase in capacity with more frequencies on BostonLondon-Gatwick, Manchester, Toronto and Vancouver. The carrier is also opening new exhibitions in Hong Kong and Singapore. While the current year is likely to end in losses, Cathay Pacific hopes to return to growth in the next financial year.
Hong Kong reaches 70 million passengers in 2016Last year, Hong Kong's Chek Lap Kok hub reached the 70 million passenger mark for the first time in its history. With exactly 70.5 million passengers registered in 2016, the hub recorded a 2.9% increase in traffic. Hong Kong is the Asia's leading international airport in passenger numbers, surpassing Tokyo-Haneda and Beijing, excluding domestic traffic. Last year, the airport finally reached its saturation point and has embarked on construction work that includes a third runway, maximising the capacity of Terminal 1, and extending Terminal 2 with a new satellite designed to handle an additional 30 million passengers, linked by automatic shuttle to the existing infrastructure. This would bring total terminal capacity to 102 million passengers, compared with 70 million today. This figure could be reached by 2030. |
