Cathay Pacific adds A350 to Vancouver, preparing for Hong Kong Airlines' long haul entry

Premium Analysis

Cathay Pacific's fortunes have been weakened in recent years as competition mounts, mostly from greater regional capacity, some of which feeds other airlines' long haul hubs. Locally Cathay has faced home market competition from Hong Kong Airlines and LCC HK Express, which together have weakened Cathay on its regional services. Yet Cathay has been relatively insulated from the growing direct competition on long haul routes, which have supported its network in recent times and account for a high share of revenue.

Hong Kong Airlines is growing long haul to Australia and New Zealand, but its major threat to Cathay is on North American and European routes, to be launched with forthcoming A350s. Cathay appears to be making a pre-emptive strike by deploying its attention-getting A350 to increase flights to Vancouver, which Cathay expects to be an early Hong Kong Airlines destination.

This is the first time that Cathay is growing Vancouver since the entry of Oasis Hong Kong in 2007. After Oasis' subsequent collapse Cathay withdrew the additional capacity it had mounted. Hong Kong Airlines, however, has stronger backing – HNA – and is already known in the territory. Hong Kong Airlines' impact is guaranteed, but the question is to what extent. This depends on how Hong Kong Airlines sharpens as it becomes the city's second flagship airline.

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