Cathay Pacific Airways' long-haul growth could provoke Asian airline consolidation; ANA and SIA?

Locally in Hong Kong, Cathay Pacific has been in a rotating series of staff disputes with threats of work stoppages. But elsewhere in Asia competitor airlines have cast a worrying glow over Cathay and its long-haul growth. Cathay in Apr-2015 received its 50th 777-300ER; this in contrast to its previous long-haul workhorse, the 747-400, which numbered only 24 at its peak fleet size.

Cathay is the only Asian airline to have a significant presence in all three of Asia's core long-haul markets: Australia, Europe and North America. Europe and North America will receive further growth as A350s arrive, while Australia expansion hinges on gaining added traffic rights. Cathay's geography in the middle of Asia gives it cross-regional reach lacking at competitors, which are often smaller than Cathay.

A likely outcome of these dynamics is the evolution of deep partnerships between Northeast and Southeast Asian airlines. As they further consider endgame scenarios, consolidation becomes a possible future direction. Mergers will not be as integrated as in Europe, let alone North America, but the pressure for some forms of closer relationships is growing. One possible example could be a pairing of All Nippon Airways and Singapore Airlines.