This website uses cookies to ensure you have the best experience. Learn more

Cathay Pacific Airlines Essay

4333 words - 17 pages

Case AnalysisStrategic Marketing in Asia~ CATHAY PACIFIC ~IntroductionSince its establishment in 1946, Cathay Pacific has been a profitable airline company, which experienced periodical growth. In 1998 however, the airline experienced a loss of US $70 million, a stark contrast from earning $218 million in profits in the previous year. For Cathay Pacific, this was the first loss experienced by the air carrier since 1963. Cathay Pacific's economic hardship was mainly the result of a financial crisis, which affected the Asia-Pacific region at that time. As a result of this crisis, air travel heavily declined, resulting in low passenger loads and yields. For Cathay Pacific, this translated into a decline of 12.9% in revenue. Additionally, Cathay Pacific also faced a series of problems with its labor department due to disagreements over negotiations and the handling of in-flight operations. This conflict resulted in strikes and delays for the airline. Cathay Pacific's problems were exacerbated by the media, which closely scrutinized the airline's actions. As a result, Cathay Pacific also had a crisis in Public Relations. This report discusses the key issues that have surrounded Cathay Pacific and provides an analysis with some recommendations to tackle the situation at hand.AnalysisDespite its well-known reputation in the Asia-Pacific region, Cathay Pacific faced many challenges that would have a significant impact on its business. By examining the changes that have taken place in the company and the airline industry over the years, the following key issues can be identified. Cathay Pacific needs to address these key issues in order to be successful in the future.Update - What has happened since 1999In a bid to escape its 18-month financial slump, Cathay Pacific strategically used Hong Kong as the main hub for air transport in Asia. Additionally, the company's performance in Europe and North America was able to compensate for the airline's poor performance in Asia. These initiatives paid off as Cathay Pacific earned a profit of $285 million in 1999. Cathay Pacific was also fortunate in its timing, as its participation in the "One World Alliance" began to increase traffic for the airliner. "One World Alliance" is a joint effort among different airlines to share frequent flier points and promotions in a bid to attract fliers.2000 was a good year for Cathay Pacific for several reasons. Firstly, the Asian economy was gradually improving which resulted in more passengers returning to travel. Secondly, Cathay Pacific's continued cost cutting and capital investment strategy began to show significant results. The company posted profits of $642 million, a jump of 130%.In 2001, the entire air industry suffered a large blow from the September 11th terrorist acts. As a result, airline travel dramatically declined, affecting all the companies. Cathay Pacific's response to this business climate was to maintain its strategy of cost cutting and investment.In 2003,...

Find Another Essay On Cathay Pacific Airlines

Crisis Management: Cathay Pacific Labor Dispute Analysis

7119 words - 28 pages backgrounds and education levels. Airlines that were able to keep their labor costs low enjoyed a significant competitive advantage in the industry.The organizational issues that have aversely affected Cathay Pacific in recent months are not new to the industry as a whole. In fact, the history of the industry is riddled with labor disputes, pilot walkouts, regulatory involvement, and other forms of organizational conflict. Since 1946 there have been

Discussion Surrounding Global Alliances Operating in the Airline Industry

1587 words - 6 pages Lufthansa, United Airlines, Singapore Airlines and Air China (Air New Zealand, 2011). Another major airline alliance operating today is the Oneworld alliance. Founded on 1 February 1999 by giants such as British Airways, Cathay Pacific, and Qantas, it has expanded to include twelve member airlines, and has an additional twenty non-voting affiliate members, such as QantasLink, subsidiary of Qantas, and Dragonair, subsidiary of Cathay Pacific

Business Strategy of Virgin Atlantic Airlines

1627 words - 7 pages players; with many of them having worldwide operations. There are many large airline chains such as BA, Cathay Pacific, and Lufthansa. Furthermore, a large number of independent airlines especially in the European region provide acquisition opportunities to large chains. Merging in the airline industry would strengthen competition and result in loss of revenues. Intense competition threatens to wear away the group’s market share and reduce its

Analysis for Airline Industry

7701 words - 31 pages in-flight catering operations and contracting-out of specialist non-core activities. And that is the reason why Cathay Pacific Catering Services (H.K) Limited, a wholly owned subsidiary of Cathay Pacific, serves flight-kitchen for over 30 airlines in Hong Kong.7. Economic of Scales and Yield ManagementFrom the airline operator's perspective, the main objective in supply terms is to maximize profitability from the available capacity, which is

Airline Alliances

1828 words - 7 pages the second largest alliance with eight airlines, Quantis, British Airways, American Airlines, Cathay Pacific, Finnair, Iberia, LanChile, Aer Lingus. The alliance offers frequent flyer sharing, employees 260,000 people in over 130 countries serving 550 destinations. oneworld creates value by "treating the continents of the world as individual stepping stones, fares are based on the number of continents you visit and your class of travel". Another

American Airlines - The Advantage Airline

1026 words - 4 pages , 2003).American Airlines runs a frequent flyer program called AAdvantage and is part of the Oneworld alliance, giving its loyal passengers the added advantage of being able to use their earned frequent flyer points and status with other international airlines, like Ireland's Aer Lingus, Australia's QANTAS, Hong Kong's Cathay Pacific, and British Airways. Combined, Oneworld serves over 573 destinations in 136 countries (Oneworld).Airline food has

Thai airways

1303 words - 6 pages the contract of the customers. Competitors The direct competitors of Thai airways are Singapore Airline and Cathay Pacific. Both of the competitors of Thai Airways are considered to be 5 stars company in this industry from Skytrax. This make sure that they are very strong in term of service section both the service provider and the customer satisfaction. However, Thai Airline only received 4 stars from the chart. This lead Thai airways to step

A Decline in Revenue at Quantas

1600 words - 7 pages and making a record at that time. In 1999 Qantas set up the one world international air union with some international airline company such as American airlines, Canadian Airlines, British Airlines and Cathay Pacific airlines. And now it is air routes and subsidiary Qantas link and Jet connect and now Qantas airlines have covered Oceania, Southeast Asia, East Asia, Britain, Germany, South Africa, USA, Canada, and any other country around the world

Assignment 2

1121 words - 5 pages competitors to the company? The major competitors in the aviation industry are Emirates, Qatar Airways, ANA All Nippon Airways, Asiana Airlines Cathay Pacific Airways, Etihad Airways, Garuda Indonesia, Turkish Airlines, Qantas Airway and other operating airlines in the world. Works Cited - - -

British Airways plc

4933 words - 20 pages and fly home the Delta Way". Meanwhile, Canadian Pacific established its own integrated airline, hotel, railroad and passenger-ship network. Since the 1980s, airlines have been becoming increasingly involved in horizontal relationships. The ultimate objective, in any case, is to develop a mutually advantageous agreement, which strengthens market share.Changes in the industry structureThe transportation industry was traditionally among the most

Competitive Advantage and its Application within the Aviation Industry

1689 words - 7 pages effective and service excellence (Heracleous, Wirtz, & Johnston, 2004). When passengers are provided exceptional customer service, it increase the chances of them flying with SIA again (Heracleous, Wirtz, & Johnston, 2004). SIA has successfully implemented their competitive advantage as indicated by their high profit margin of 6.68 percent. In comparison, Cathay Pacific and Qantas’s profit margin were 2.16 percent and 4.08 percent, respectively

Similar Essays

Cathay Pacific Management Report

4697 words - 19 pages resulted in Cathay Pacific recording a paper fuel hedging gain for its half year reports for 2009. However, as a result of the global economic situation, the Group reported an operating loss. Given the current economic climate, and in line with the steps being taken by other major airlines around the world, the airline has undertaken a comprehensive review of all its routes and operations. This has resulted in frequencies being reduced to certain

Management Report

4697 words - 19 pages resulted in Cathay Pacific recording a paper fuel hedging gain for its half year reports for 2009. However, as a result of the global economic situation, the Group reported an operating loss. Given the current economic climate, and in line with the steps being taken by other major airlines around the world, the airline has undertaken a comprehensive review of all its routes and operations. This has resulted in frequencies being reduced to certain

Quality Management: Cathay Pacific Airways Essay

2467 words - 10 pages aircrafts, these investments include catering, aircraft maintenance and ground handling companies, as well as their corporate headquarters at Hong Kong International Airport; Cathay Pacific and its subsidiaries and associate employ 25,000 staff in Hong Kong. The airline's two major shareholders are both Hong Kong companies listed on the Hong Kong Stock Exchange, as is Cathay Pacific itself.Cathay Pacific is the major shareholder in AHK Air Hong

Financial Analysis

1987 words - 8 pages – coordination. At the end, the product will access a continuous improvement which preserves a competitive to against other airlines and make a good use in financial activities. Safety first Cathay Pacific offers various insurance plans to employees but their priority planning has place safety first. Since employees had been being company assets, they had hurt during working. The compensation is necessary adjust after the incident and accident