Cathay Pacific COO Ivan Chu, speaking at the CAPA Australia Pacific Aviation Summit, stated (08-Aug-2013) Cathay Pacific Cargo’s Boeing 747-8F fleet is “doing well for us” adding “fuel prices have ended the days of old freighters making money.” Mr Chu said “the economics of the business have changed,” and cargo carriers “must fly fuel efficient aircraft in event the most robust market to achieve profitability.” Mr Chu added the carrier is “looking to focus on high value items and special products” and is looking “to increase cargo value by reducing transit time.” Mr Chu also said the “air cargo business will rebound, and we will be perfectly placed to capitalise.”
Cathay Pacific COO: 747-8F is 'doing well for us'
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Cathay Dragon evaluates A320/737 order to upgrade Asia's oldest fleet – if unions allow
It may seem surprising that Asia's oldest aircraft fleet is operated by Cathay Dragon, part of the Cathay Pacific Group that is one of Asia's historically blue-chip, but now challenged, aviation companies. Cathay, according to the South China Morning Post, is midway through an RFP to acquire 23 next-generation narrowbody aircraft from 2019. Meanwhile its local rival HK Express has already received its first A320neo.
Cathay Dragon operates 42 passenger aircraft, including 23 narrowbodies with an average fleet age of 12.6 years. The A330s – including the world's oldest – push average fleet age to 14.5 years, the highest of major Asian airlines. The A320s alone would still be the oldest fleet; Korean Air has the second oldest fleet, but at a younger 9.8 years.
The aircraft order is overdue and Cathay missed an opportunity five to ten years ago to grow a larger footprint in mainland China. Now the Singapore Airlines Group – thanks to narrowbodies and LCCs – serves more Chinese cities than Cathay does in its own backyard. Although it is a buyer's market for new aircraft these are precarious times at Cathay, whose fiery unions lack confidence in management spending and direction. As Cathay restructures it appears that inevitably staff will have to make salary sacrifices, further challenging how to communicate the necessity of long term investments.
Hong Kong Airlines becomes larger in Japan than in China: overlap with sister HK Express
The rapid growth of mainland China's HNA Group is resulting in companies being added ahead of integration. HNA's two Hong Kong-based airlines, Hong Kong Airlines and HK Express, are increasingly overlapping with each other. That their roles are undefined and uncoordinated risks the two fighting each other – rather than combining their different propositions to address multiple segments of the markets.
Hong Kong Airlines is rapidly growing in Tokyo and Osaka, and launching a new service to Seoul Incheon – its 11th new destination in 2016. These are strong O&D markets and present a change from Hong Kong Airlines' previous staple of connecting traffic from mainland China over Hong Kong, or competing mainly against Cathay Pacific in key regional Asian markets from Hong Kong.
Following Hong Kong Airlines' entry to Tokyo and Osaka it will further increase services to the point where Japan becomes a larger market for it than mainland China. This is of some concern given Hong Kong Airlines' still evolving strategy for Japan, and weakening of the market through the appreciation of the yen.