Cathay Pacific CEO, Tony Tyler, stated reservations are "looking very good" as a rebounding economy revives travel demand. Mr Tyler said: “We can look forward to the next six months with some confidence. Forward bookings are looking very good for the rest of the summer. Cargo is looking good for the rest of the year” (Bloomberg, 05-Aug-2010). Mr Tyler also confirmed the carrier has hedged approximately 30% of its fuel requirements for the remainder of 2010 and into 2011, stating the airline is “reasonably satisfied with the hedging book".
Cathay Pacific's forward bookings 'looking very good'
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China and Australia remove airline growth restrictions as China cautiously embraces open skies
China has agreed to liberalise passenger flights and remove capacity restrictions with Australia, its largest outbound long haul market after the United States. This is a relief to Chinese airlines, which face bilateral constraints in North America and Europe. The result is already evident as Chinese airlines deploy more capacity and larger aircraft to Australia.
In North American and European markets the local governments hold back on traffic right expansion (let alone open skies). But for Australia it was the Australian government, which signalled some years ago that it wanted to liberalise once China was ready – a time that has now come.
Australia's view was progressive and detached from bygone days of national carrier interest; Chinese airlines hold 90% of the market to Australia. Elsewhere many governments still hold back on Chinese traffic right expansion so their local airlines can continue to grow. There are 15 Chinese airports that have nonstop flights to Australia with a total of 27 airport pairs – figures that should expand in 2017 as the market evolves further with the Virgin Australia-HNA partnership.
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.