Cathay Pacific to Christchurch: contentious Air New Zealand JV as Cathay seeks greater "agility"

Premium Analysis

As Cathay Pacific is being forced to undergo a competitive metamorphosis it is exploring all options. The latest example is an expected announcement of a new Cathay Pacific route from Hong Kong to Christchurch in New Zealand's South Island. The service is expected to be seasonal (for the New Zealand summer), and is only Cathay's second seasonal long haul route after the Jan-2017 announcement of northern summer service to Barcelona.

New Zealand is a small network component for Cathay but one of its last strongholds, due to a joint venture with Air New Zealand. The New Zealand government reluctantly extended approval for the JV despite Cathay and Air NZ reneging on an offer to use it to link Hong Kong with Christchurch, as well as Auckland. This would thereby have extended the JV to benefit more of New Zealand - a sensitive local matter based on the assertion that Auckland was receiving disproportionate air service benefit.

Air NZ's JV with Cathay arch rival Singapore Airlines has resulted in SIA growing its presence in Christchurch. Cathay has been more frugal, and the NZ government determined that although the JV reduced competition, there was no prospective third competitor, so no harm done.

But now that Hong Kong Airlines has entered Auckland, and then expanded, the Cathay-Air NZ JV faces disbanding. By finally committing to a Christchurch route Cathay appears to be bidding to keep the JV in play. But the New Zealand government will still probably withdraw approval of the Air NZ-Cathay JV.

Become a CAPA Member to access Analysis Reports

This CAPA Premium Analysis Report is 3,207 words.
Become a CAPA Member

Our Analysis Reports are only available to CAPA Members. CAPA Membership provides exclusive access to in-depth insights on the latest developments in the aviation and travel industry, developed by our team of dedicated analysts located in Europe, North America, Asia and Australia.

Each report offers a fresh perspective on the latest industry trends and is available online or via the CAPA mobile app, with customisable alerts to help you stay informed and identify new business opportunities.

CAPA Membership also provides access to our full suite of tools, including a tailored selection of more than 1,000 News Briefs every week and comprehensive data and analysis on thousands of companies around the world.