FlightGlobal.com
Home
Premium
Archive
Video
Images
Forum
Atlas
Blogs
Jobs
Shop
RSS
Email Newsletters
You are in:
Home
Aviation History
2000
2000 - 0056.PDF
HONG KONG AVIATION load, the airline can carry 2.5t of cargo in an A320,4t in an A321 and 15t in an A3 30. "With the gradual removal of its cargo uplift restrictions in China, the airline has been able to focus on developing this business to counter balance the weakness in the passenger cabin," says equity research firm Salomon Smith Barney. "In fact, weak passenger volumes make incremental cargo space available, which the airline has also attempted to fill." Since it was founded in 1946, Cathay Pacific has become one of Asia's biggest carriers, with an all-widebody fleet of almost 60 operational aircraft with an average age of just over 4.7 years. The fleet is based primarily around Boeing 747-400s, 777-300s and -200s and Airbus A3 30-300s and A340-300s. Lastyear was disastrous for the airline, which reported a HKS542 million ($70 million) loss - Cathay's first full-year loss since 1963. The poor performance was blamed on a combination of the region's economic woes and the chaos that accompanied the opening of the new Hong Kong International Airport at Chek Lap Kok. Cathay says almost all routes suffered "Cargo has had a very good year," -Antony Tyler, Cathay Pacific through the economic downturn, particularly those tojapan and South-East Asia. "Long-haul services to Europe and North America per formed better, but even these were affected," says the airline. Tyler describes the airline's first-half perfor mance this year as "rather indifferent". Cathay endured a messy industrial dispute with its pilots, which disrupted operations for two weeks from the end of May when the pilots - whom Tyler describes as "difficult to manage" - reported in sick en masse. The airline finally extracted a reluctant acceptance of pay cuts for some pilots from the Hong Kong Aircrew Officers Association, as part of a package of new contract terms that the airline claims will save HK$ 1.4 billion over the next 10 years. Apart from the impact of this action, passen ger numbers fell by 1 % compared with the first half of 1998, when the airline suffered a HKS175 million loss. Despite this, turnover rose by 1.4% to HK$ 13.17 billion in the six months up to the end ofjune this year, and a net profit of HKS108 million was reported. "Things have picked up rather snappily [in the second half]," says Tyler. "Loads are strong. Yields are weak, but we have not seen a dramat ic collapse like last year. Some markets are recovering quite strongly: the inbound market [to Hong Kong] is beginning to pick up again, Seoul and parts of South-East Asia have been strong, [and] it'snice to seejapan coming back." Japan used to account for 25% of Cathay's rev enue, but made up only 8% in 1998. "Cargo has had a very good year - exports from Asia have been strong," says Tyler. This was underlined in mid-October when Cathay revealed it had ordered two Boeing 747-400 freighters to meet growing demand. The airline already owns nine freighters: two 747-400Fs, four 747-200Fs, and three more -200Fs operat ed by Air Hong Kong. Cargo business account ed for 28% of the airline's first-half turnover. RETURN TO PROFIT The first-half return to profit has led Cathay to consider bringing forward plans for new aircraft orders, as well as leasing three Airbus A3 40- 300s from Air China at the beginning of October, and starting in November to hire new flight attendants for the first time in over a year. Cathay has also just announced a new order for three A3 3 0-3 00s for delivery in the first quarter of 2001 and is understood to be consid ering leasing more A340s. The airline is exam ining new aircraft types for future ultra- long-haul transpacific routes, as well as future large aircraft types to replace its 19 747-400s. "We have got the fleet planning group look ing at new aircraft, but the types are still in the melting pot," says Cathay engineering director Derek Cridland. On potential North Pacific routes, Cridland says the proposed Airbus A340-500/600 four-engined types are under consideration, as are the Boeing 777- 200X/300X twinjet proposals. "One obvious issue is that we are Rolls-pow ered, and the 777Xs are General Electric," says Cridland, adding that Boeing is working with Cathay to find a resolution. Boeing and GE will have to convince the airline that it is worth bringing the GE90 powerplant into Cathay's fleet, while Rolls-Royce and its partners will have to demonstrate that the Trent 500, which powers the Airbus types, will perform as promised and meet reliability standards. In November, the airline formally opened its new, HKS4.9 billion, headquarters at Chek Lap Kok Airport, consolidating 19 corporate offices and operations centres in the building, called Cathay Pacific City. Close by, Dragonair is approaching the completion of its own HK$ 1.4 billion facility, Dragonair House. Dragonair is still dwarfed by its neighbour and shareholder, but the day may be coming when the Cathay Goliath faces a less-than-wel- come challenge on its own doorstep. • 54 FLIGHT INTERNATIONAL 22 December 1999 - 3 January 2000
Sign up to
Flight Digital Magazine
Flight Print Magazine
Airline Business Magazine
E-newsletters
RSS
Events
