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Old June 13th, 2008, 09:51 AM   #1141
hkskyline
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Quote:
Originally Posted by ddes View Post
Yes, CX can mitigate the problem by increasing frequencies and therefore pleasing the business traveller. But please ask yourself if CX can realistically add more flights to London, or a 4th or 5 daily to New York?

And what happens if the flight that favours the business travellers the most gets too full? CX is now also tapping the India-US market. Add 2 or 3 more dailies to Los Angeles, San Francisco and New York? It is for these few situations that require a VLA, not just the 773ER.

Yes, I am also conceding that CX's need for A380 are restricted to a few routes where increasing frequencies is not an option. Remember, CX is not in Japan, where the airlines there can afford not to get a VLA. CX is one of the gateways to Asia and China, a region of growth.

If in the end, CX doesn't mind flying B773ERs to London, with BA, VS, QF all using the A380s onwards to London and Australia, happily flying less passengers and happy to yield more passengers to their Oneworld partners on their home turf, I'll raise my case.

And hetfield85's post about introducing CX's new interiors on Malaysia routes is a little un-needed. You don't see me posting Cathay introducing the new interiors on the HKG-SIN route, the HKG-BKK-SIN route, the HKG-SIN-CMB route.
With a slowing US economy and rising fuel prices, any substantial increase is highly questionable from a business sense, let alone investing in a new aircraft that has seen numerous delays of several years. The reality is airlines are cutting flights and destinations altogether now, and not thinking about substituting a bigger plane or adding frequencies - that applies even to the larger markets such as London and New York as they are suffering from these economic problems, perhaps moreso since they're financial centres.

Cathay has always been going after US-India traffic. This strategy has been around for some time. The constraining factor, until recently, has been the restrictive air services agreement between Hong Kong and India. However, would increased traffic between Hong Kong and India result in a substantial rise in transpacific traffic that may warrant a 33% capacity increase with an A380? Also keep in mind these new flights are not all about transfer passengers to North America. There's also a lot of business and tourism activity to Hong Kong as an end-point or a transfer point to the immediate East Asia region. Hence, I don't see a strong argument to gamble a 33% capacity increase on India alone, especially when the Middle Eastern carriers are aggressively marketing and pricing their US-India routes, which take roughly the same amount of flying time through the Middle East.

A region of growth is not the answer to all of life's problems. Revenue management requires a more detailed analysis beyond growth and market size figures. What about the travelling patterns and the demographics of people travelling? For example, Europeans are rich and the continent has a huge population but airplanes compete with trains, and seem to be losing. Then there is cost management, which looks at whether the revenue side can cover the rising cost of fuel, the opportunity cost of failing to meet key milestones when buying a new plane, and the contingency costs when the manufacturer can't send the plane out as originally promised. I don't think the mere fact that Asia is large and growing can justify defying the business reality and pushing ahead with a new plane that is experiencing so many teething problems. The Middle East is a huge example of how your type of thinking doesn't work. That part of the world is not heavily populated, albeit very rich, but the pace of their aviation industry's growth is quite staggering nevertheless.

And whether other airlines fly the A380 around the world isn't a key concern. What's important is who makes the most profit at the end of the day. The business world doesn't function on who flies the newest and biggest planes. It's about who has the $$$ to stay afloat. That's why the rest of the world is watching so cautiously as the A380 deliveries fall behind schedule time after time - senior management at the world's major airlines are obviously concerned on what their bottom lines will be rather than who can get these things the fastest. We see in reality that the A380 hasn't been on the shopping list of many airlines at all. Orders are not pouring in.

In fact, the number of passengers being flown is quite irrelevant in the profit analysis. It's all about the operating margin. American carriers carry a lot more passengers yet they're going bankrupt one after another. If any of the competitors are yielding more margin than Cathay, then that will be a cause for concern, but Cathay's profitability is among the top in the industry, so what's the concern there?

Welcome to the business world.
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Old June 14th, 2008, 05:52 AM   #1142
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Cathay Pacific May Passengers Up 15% On Year At 2.11 Mln
13 June 2008

HONG KONG (Dow Jones)--Cathay Pacific Airways Ltd. (0293.HK) said Friday it carried 15% more passengers in May than it did in the same month last year, though the airline said the rise was lower than its increase in capacity.

The Hong Kong-based carrier and its China-focused unit, Hong Kong Dragon Airlines Ltd., carried 2.11 million passengers in May. The airline group also carried 140,698 metric tons of cargo during the month, up 7.8% from a year earlier.

The airline didn't provide year-earlier figures.

'Looking ahead, we are cautiously optimistic about passenger demand as we head towards the summer peak season,' said Ian Shiu, Cathay Pacific's general manager for revenue management.

Cathay Pacific's passenger capacity, as measured by available seat kilometers, rose 16% to 9.81 billion ASKs.

The airline's passenger load factor rose 2.3 percentage points from a year earlier to 77.4%.
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Old June 14th, 2008, 07:07 AM   #1143
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Quote:
Originally Posted by hkskyline View Post
777-300ER has 301 seats (57 J class) while the 777-300 has 385 seats (59 J class). The trend is now moving towards the ER model, hence an extra 100 seats is a 1/3 (33%) increase in capacity.

The 747-400 with the new long haul product only has 379 seats (46 J class), and an additional 100 seats will be a 1/4 (25%) increase in capacity. This is a significant jump considering the prevailing trend now is to cut capacity and not increase it.

Yes, busy routes may be able to absorb more seats, but that can be done by increasing frequencies, hence attracting the business traveller with multiple flights per day. It goes back to the business rationale over how capacity increases can be implemented. Cathay prefers adding frequencies to provide more choice to the traveller.

Alliances are meant to optimize revenue management by allowing carriers who would otherwise not fly to a destination because of profitability concerns to get there via an alliance carrier. Obviously, if there is an economic incentive to fly to a destination in the first place, they would fly their planes to it directly. I doubt any alliance would knowingly restrict its partner carriers' expansion concerns. That doesn't make business sense, and alliances are not life-time contracts either. Partner carriers are free to get in and out of them as they please.

Economic feasibility was the primary concern why Air New Zealand decided to stop flying to Singapore altogether and rely on its Star Alliance partner SQ instead. Instead, NZ decided to fly to Hong Kong and China where profit margins and prospects were higher.
i agree. Actually, the strategy of having higher frequency is more than just serving the business traveler. For example, if a passenger want to travel from Shanghai to HK, and then HK to London. The first legs has tons of frequency, like one flight every hour. If HK-London frequency increase even further, the waiting time for this kind of passenger would decrease even further. This benefit both the economy seat and business seat passenger.
That's another reason for airlines to use the frequency strategy. But of course, there is always a optimal point (in the operational cost perspective) to balance between frequency vs capacity. I just can't imagine CX or Dragonair would use all A320 for all HK to Shanghai flight, and then reduce the interval time between each flight from 1 hour to 30 mins.
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Old June 14th, 2008, 09:57 AM   #1144
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Let me purposely divert attention a little.

Is there any chance that CX might actually diversify into opening a new hub somewhere, say China? Or will it always be a one-airport hub airline...
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Old June 14th, 2008, 04:48 PM   #1145
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Quote:
Originally Posted by ddes View Post
Let me purposely divert attention a little.

Is there any chance that CX might actually diversify into opening a new hub somewhere, say China? Or will it always be a one-airport hub airline...
It depends on the air services agreement between Hong Kong and China, but I'd imagine the Air China cross-ownership is supposed to make a China hub a lot easier to create.
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Old June 16th, 2008, 06:58 AM   #1146
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Turbulent Dragonair flight leaves 13 hurt
Hong Kong Standard
Friday, June 13, 2008

Five passengers and eight crew members of a Dragonair flight were injured yesterday when the aircraft encountered turbulence on a trip from Beijing to Hong Kong.

However, flight KA909, with 256 passengers and 18 crew, touched down safely at Hong Kong International Airport last night.

Three passengers and eight crew were taken to Princess Margaret Hospital. Two passengers were treated at the airport.

Dragonair management went to the hospital to check on the injured. A spokesman for the carrier said an investigation would be carried out.

The company also apologized for any inconvenience and promised to provide assistance to the affected passengers and crew.
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Old June 27th, 2008, 02:44 AM   #1147
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Two not so good news for Cathay.

RTHK News:
8 hurt when Cathay plane hits turbulence

Cathay Pacific in price-fixing probe
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Old June 27th, 2008, 05:14 AM   #1148
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Scare for 170 Cathay passengers as pilot forced to abort landing
26 June 2008
South China Morning Post

A passenger described frightening scenes aboard a Cathay Pacific flight that aborted its landing shortly before it was due to touch down at Chek Lap Kok yesterday morning.

Peter Krien, one of the 170 passengers aboard flight CX829 from Toronto, said it was the scariest flight he had ever taken.

The Airbus A340 approached Chek Lap Kok at 6am when both the No8 typhoon signal and the red rain warning were in force.

"As the plane began to descend, the weather was so bad that I could not see anything but a grey mass outside the windows," Krien, who is a journalist, said. "And there was turbulence {hellip} little kids were scared and some people clasped their hands and started praying."

He said that when the screen on the seat back read that the flight was one minute away from landing, he felt the plane pick up speed rapidly and gain height.

"In all those years I have flown, this was the scariest flight," Krien said. "Finally, the flight landed after making a big circle. We were so happy that it landed safely. Everyone was clapping and shook hands with the pilots as we left the cabin."

A Cathay Pacific spokeswoman confirmed that the flight was forced to abort a landing. She said pilots had the power to make decisions about landing when there were safety concerns over bad weather.

The Airport Authority said Severe Tropical Storm Fengshen had delayed 135 inbound and 182 outbound flights and caused 25 flights to be cancelled.
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Old July 3rd, 2008, 05:36 AM   #1149
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Cathay Pacific warns profits to disappoint as rising jet fuel costs hurt bottom line
2 July 2008

HONG KONG (AP) - Cathay Pacific Airways Ltd. warned Wednesday that its profits would be "disappointing" this year because of rapidly rising fuel costs.

The Hong Kong-based airline said it paid 60 percent more for jet fuel in the first half of the year compared to the same period in 2007. The most recent spot price for jet fuel was more than 90 percent higher than the company's average price last year, it said.

Earnings during the first-half and full-year periods "are expected to be disappointing," the carrier said in a filing to the Hong Kong Stock Exchange. "It is not possible to estimate accurately the effect of high jet fuel prices on the 2008 financial results."

The airline hiked its ticket surcharge by 37 percent last month to help offset high fuel prices after receiving approval from regulators.

Cathay shares were down 6.3 percent at HK$13.2 during late-day trading in Hong Kong. Its stock has shed more than 27 percent this year amid worries over fuel prices.

Airlines around Asia are struggling to cope with the record fuel costs.

Australia's Qantas announced in May it would lay off staff and lower capacity across its domestic and international networks. Also that month, Singapore Airlines increased its fuel surcharge on all flights.

Cathay Pacific's 2007 net profit surged 72 percent on strong demand for first- and business-class travel despite the rise in fuel prices that began at midyear. Net profit for the 12 months that ended Dec. 31 rose to 7.02 billion Hong Kong dollars (US$900 million) from HK$4.09 billion in 2006.
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Old July 14th, 2008, 06:57 AM   #1150
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Cathay Sticks to Expansion Plans
11 July 2008
The Wall Street Journal

HONG KONG -- Cathay Pacific Airways Ltd. plans to strengthen its presence in the lucrative Middle East air market and stick by its previous expansion efforts in the Pacific and India, even as it contends with rising fuel prices that threaten to saddle the airline with its first annual loss in a decade.

In an interview, Chief Executive Tony Tyler said he sees opportunities for his carrier to grab business from rivals, particularly from U.S. carriers flying between North America and Asia, which are paring back as oil prices hit the industry world-wide.

"Despite all the dire forecasts of gloom and doom in the world economy and so on, we're not seeing -- yet -- any real sign of that," he said. "What we are facing at the moment is a cost problem, not a revenue problem."

At the same time, he acknowledged industry conditions could limit expansion efforts. "There are opportunities, but it's not going to be easy to make profitable use of them in the short term. It's more about consolidating our market share," Mr. Tyler said.

Cathay -- historically well run and a bellwether for the Asian market -- is adding more fuel-efficient aircraft such as the Boeing 777-300ER to its fleet to expand service on routes where it sees a high potential for profit. It plans, for example, to add flights in October to three destinations in the Persian Gulf -- Dubai, Bahrain and Riyadh, Saudi Arabia.

The airline has increased its aircraft capacity on trans-Pacific routes by 37% since the start of this year, and its passenger traffic on these routes has grown by 33% over the same period, Mr. Tyler said. At the same time, cash-strapped U.S. carriers including Northwest Airlines Corp. and UAL Corp.'s United Airlines are scaling back flights or delaying planned service between the U.S. and China.

"Now is the time to go in there and capture market share, so that when the U.S. economy strengthens again, we'll be in a great position to feed the whole Cathay Pacific network," he said.

Cathay has ramped up service to India. The airline and its Dragonair unit fly 35 times a week to India, up from eight weekly flights in December.

It also is raising fares for first- and business-class passengers on most of its routes to and from Hong Kong. The fare increases, ranging from 3% to 15%, will take effect starting Friday. But the airline concedes it runs the risk of driving away customers, particularly as the economy weakens in much of the developed world.

"Fares have to go up," said Mr. Tyler, 52 years old. "The amount people have to pay to travel has to climb. The unknown question is, what impact will that have on traffic demand?"

The cost of jet fuel accounts for 49% of Cathay's total operating costs, up from 39% 12 months ago. Fuel surcharges have failed to keep pace, offsetting only $3 of every $10 of this increase, and Cathay is hedging fewer of its fuel requirements this year compared with 2007. As result, the Hong Kong carrier issued a profit warning last week for only the second time in its 62-year history.

Investment bank Cazenove said in a July 3 research note that the airline stands to post a loss of 1.6 billion Hong Kong dollars (US$205 million) this year because of higher fuel bills. Cathay plans Aug. 6 to announce its financial results for the first six months of the year. Mr. Tyler declined to give a forecast.

Cathay is in a better position than many of its counterparts to tough out the new hardships. Its balance sheet and brand are strong, it has a loyal base of high-margin corporate customers and its vast international network serves high-volume destinations. It also has the strongest network in China of any airline based outside the Chinese mainland.

Cathay last month ordered its pilots to fly slower to burn less fuel. Its flights now take an average of four minutes longer, enough to save "several million U.S. dollars" over the remainder of this year but not so much slower that passengers might miss connecting flights, Mr. Tyler said.

Cathay also could ground some aircraft if the potential savings justify such a drastic step, but Mr. Tyler draws the line at the idea of delaying deliveries of new aircraft. "It's always very expensive to defer deliveries. Manufacturers can hold your feet to the fire, and they tend to do that," he said.
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Old July 14th, 2008, 07:06 AM   #1151
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Cathay to lift fares by up to 15pc
11 July 2008
South China Morning Post

Cathay Pacific Airways yesterday announced fare increases ranging from 3 to 15 per cent for first- and business-class passengers from today but left economy-class fares unchanged.

The airline said fares on flights to Europe, Australia and Canada would rise by double-digit percentages, while those to the US and Asian countries would have single-digit rises. It blamed soaring fuel bills.

"What the company is facing at the moment is a cost problem, not a revenue problem {hellip} the increase in the fuel bill is too great for the company to absorb," chief executive Tony Tyler said. "We have to ask our passengers to pay more for their flights - either through increased surcharges or by increasing fares."

A spokeswoman said fuel costs now accounted for about half the carrier's total costs, compared with 30 per cent last year.

She declined to predict the impact of fare increases on passenger loads, which averaged 78 per cent in the first half of the year.

Last Wednesday, Cathay Pacific issued the second profit warning in its history amid record high fuel prices, warning that its half-year earnings, to be released next month, would be "disappointing".

The company's first profit warning was issued in 2003 after Sars crippled the aviation sector.
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Old July 15th, 2008, 08:50 AM   #1152
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Cathay attendants march to protest their plight

Tuesday, July 15, 2008

Cathay Pacific Airways flight attendants yesterday marched from Pacific Place to the central government offices to protest about pay and conditions.
The union claims that for six years the company had not paid hourly-paid crew for 33 days of the year - 21 days of paid annual leave and 12 statutory holidays - amounting to over HK$100,000 per employee.

Chairwoman of the Cathay Pacific Airways Flight Attendants Union Becky Kwan Siu-wa said they were fed up with the ongoing industrial problems at Cathay and accused the Labour Department of not fulfilling its duty.

For monthly-paid crew, the company had left out the element of line duty allowance which was previously used as an incentive for turn-around or split duty flights, they said.


An hourly-paid flight attendant surnamed Kwok, who has worked for over eight years, said she had to chase Cathay for her wages during the 2003 SARS epidemic and when she took maternity leave. Monthly-paid flight attendant Huang, who has worked at Cathay for 13 years, said she was owed about HK$30,000 in line duty allowances.

Another major grievance centered on the company's medical policy.

JENNIFER LAI
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Old July 15th, 2008, 01:21 PM   #1153
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Cathay Pacific June Passengers Up 13% On Year To 2.12 Mln
14 July 2008

HONG KONG (Dow Jones)--Cathay Pacific Airways Ltd. (0293.HK) said Monday it carried 13% more passengers in June than it did in the same month last year due to new capacity on routes to India, Australia, and North America.

The Hong Kong-based carrier and its China-focused unit, Hong Kong Dragon Airlines Ltd., carried 2.12 million passengers in June. The airline group also shipped 137,680 metric tons of cargo for the month, up 4% from June 2007.

Year-earlier figures weren't provided.

For the month, the airline's passenger load factor, or the proportion of seats filled on its flights, rose 0.3 percentage point to 81.3%.

The airline's passenger capacity, as measured in available seat kilometers, rose 16% to 9.54 billion ASKs.

For the first half of this year, Cathay Pacific carried 14% more passengers to 12.46 million, matching a 14% rise in capacity to 56.95 billion ASKs.
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Old July 24th, 2008, 04:41 AM   #1154
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Cathay seeks another fuel surcharge hike
Hong Kong Standard
Tuesday, July 22, 2008

Four airlines including Cathay Pacific are seeking an increase in fuel surcharges starting August 1.

It is the second time in two months for Cathay to seek an increase. Nepal Airlines and Saudi Arabian Airlines are also asking permission from the Aviation Department to increase fuel surcharges. The fourth airline was not named.

Neither the Aviation Department nor the airlines would reveal the new surcharge level, saying the figure is under review.

The department will make a decision on the applications and announce the surcharge by the end of the week. Current fuel surcharges range from HK$118 to HK$710 depending on the route and the airline.

In May, 11 airlines including Cathay were allowed to increase their fuel surcharges by as much as 37 percent. Nepal Airlines and Saudi Arabian Airlines did not hike their charges.

Fuel surcharges are reviewed and adjusted every two months. The levels will be adjusted downwards should aviation fuel prices decrease.

Aviation fuel now hovers around US$178 (HK$1,388) a barrel, almost double the level of a year ago. It cost US$159 in May and US$106 at the beginning of the year.

Oil prices surged past US$147 a barrel this month but have been hovering around US$130 lately.

Oil was traded at more than US$130 for the first time in May this year.

According to Cathay, the increase in the May surcharge covered less than half the increased cost of fuel. Jet fuel prices now account for 40 percent of the company's net operating costs, compared with 30 percent last year.

The company said it is considering shortening routes and other measures to save on fuel costs.
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Old July 26th, 2008, 06:35 AM   #1155
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Cathay Pacific fuel surcharge increases approved
25 July 2008
Press Release

Cathay Pacific Airways has been notified by the Civil Aviation Department of Hong Kong today that it is one of the airlines granted approval to increase its passenger fuel surcharge.

In the case of Cathay Pacific, approval has been granted for an increase in fuel surcharges, for a two-month period effective 1 August 2008, to US$29.60 (HK$231) for short-haul services in South and North East Asia and US$118.50 (HK$924) for long-haul services.

The current surcharges are US$21.90 (HK$171) for short-haul services and US$91 (HK$710) for long-haul services. Even with the latest increase, the airline estimates that surcharges cover less than half of the increased cost of fuel.

Soaring jet fuel prices are posing an enormous challenge to the aviation industry. Jet fuel costs now account for about half of the Cathay Pacific's net operating costs, compared with 39% a year ago.

The airline issued its second-ever profit warning earlier this month, in which it said its financial performance was being materially and adversely affected by the high price of jet fuel, with the average price paid in the first half of this year 60% above that paid in the first half of last year. The most recent spot price for jet fuel was at double the average price paid in 2007.

As the Civil Aviation Department (CAD) has pointed out, despite the recent drop in crude oil prices, jet fuel prices are still very expensive and higher than the levels when fuel surcharges were last adjusted two months ago.

A Cathay Pacific spokesperson explained: “There is a significant time lag of two to three months from the time we submit our fuel surcharge application to the CAD to the time the new surcharges become effective. For example, the supporting information we submitted earlier this month to the CAD was based on average jet fuel prices in May and June since the last review.

“Also, the difference between jet fuel and crude oil prices had widened dramatically in recent months because of additional refinery costs, limited refinery capacity and persistent demand.”

Cathay Pacific regrets the need to impose this further surcharge on passengers, but the airline reiterates that it is important to the sustainability of its business that the fuel surcharge level keeps pace with the increase in fuel prices.

Even after the latest adjustment, Cathay Pacific’s fuel surcharges still lag far behind the surcharges imposed by other international airlines on comparable routes outside Hong Kong. This is confirmed by the CAD which points out that fuel surcharges on Hong Kong routes remain lower than international levels – by about 50% on short-haul routes and less than 65% on long-haul services.

Most major airlines currently levy fuel surcharges ranging from US$32 to as much as US$82 per short-haul sector and surcharges of US$150 to more than US$200 on long-haul flights are not uncommon. Some even impose surcharges of more than US$260.

Cathay Pacific’s policy is to balance the interests of its customers with the need to run a cost-efficient airline in the interests of its staff and shareholders. The airline has taken a number of cost-efficiency measures to tackle increased costs and will continue to develop ways to counter the impact.
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Old July 30th, 2008, 12:28 AM   #1156
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Damaged Cathay Pacific flight lands at Vancouver

VANCOUVER, British Columbia, July 29 (Reuters) - A Cathay Pacific Airways Ltd (0293.HK: Quote, Profile, Research) Boeing 747 aircraft with 363 passengers suffered mid-air damage while descending for a landing at Vancouver on Tuesday, officials said.

There were no injuries but officials were trying to determine what happened to the plane at 20,000 feet while on a flight from New York to Hong Kong via the western Canadian city of Vancouver, said Jennifer Pearson, a Cathay Pacific spokeswoman.

An external panel on the aircraft's fuselage was damaged in the incident, according to Pearson, but she could not confirm or deny local media reports that the panel had been separated from the plane.

A Qantas Airways Ltd (QAN.AX: Quote, Profile, Research) Boeing 747 was forced to make an emergency landing last week in the Philippines after it suffered a hole in its fuselage during a flight from Hong Kong to Australia. (Reporting Allan Dowd, editing by Rob Wilson)

http://uk.reuters.com/article/govern...36319320080729

Plane makes safe emergency landing at YVR

Maria Cootauco
The Province


Tuesday, July 29, 2008



VANCOUVER -- A Cathay Pacific plane that lost its air conditioning panel mid-flight landed without incident at Vancouver International Airport early Tuesday morning.

The Boeing 747 aircraft originated at New York's JFK Airport and landed without incident at YVR at about 3 a.m.

"A panel that covers the air-conditioning unit in the belly of the aircraft became detached and is missing," said Bill Yearwood, regional manager of the Transportation Safety Board.

"The ground crew and flight crew, I gather, determined this after they landed here in Vancouver."

The missing piece didn't affect the pressurization in plane's cabin and there were no apparent handling changes.

Reports say that passengers heard a loud sound during the flight, but the Transportation Safety Board could not confirm if the the sound was linked to the panel.

A replacement panel is being flown to Vancouver. After the airplane has been examined, it will be allowed back into service.

"From time to time, there are panels that are lost off aircrafts, but it's not frequent," Yearwood said.

"We don't hear of it very often."

http://www.canada.com/theprovince/ne...5-3f4b66a11664
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Old July 30th, 2008, 07:50 AM   #1157
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Cathay Pacific says damaged plane posed no danger

HONG KONG, July 30 (Reuters) - Cathay Pacific Airways said mid-air damage suffered by a Boeing 747-400 aircraft with 363 passengers on board involved an air-conditioning vent but there was no danger.

The plane was on a flight on Tuesday from New York to Hong Kong via the western Canadian city of Vancouver.

"After landing (in Vancouver), it was found that one of the air-conditioning access panels had detached from the aircraft," the company said in a statement. "There was also some minor damage to other parts of the fuselage.

"The fibreglass skin panel is a secondary structure which has nothing to do with structural integrity. The event had no impact on the operation of the aircraft."

A Qantas Airways Boeing 747-400 was forced to make an emergency landing last week in the Philippines after it suffered a hole in its fuselage during a flight from Hong Kong to Australia.
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Old August 3rd, 2008, 07:18 AM   #1158
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Cathay Pacific celebrates launch of Chennai flights and rapid expansion of services to and from India
3 August 2008
Press Release

Cathay Pacific Airways on Saturday celebrated the launch of its latest destination and the conclusion of its recent rapid expansion of services to India, with 20 more flights being added to make a total of 28 per week.

The airline’s Chief Operating Officer, John Slosar, officiated at the inaugural celebration for the launch of flights to Chennai, attended by more than 300 guests in the southern Indian city. Guest of honour at the event were Mr. Dinesh Kumar, Airport Director, Airport Authority of India, and Mr Adit Atal, Vice President, Spencers Travel Services Ltd. while other guests included members of the diplomatic community, and representatives from India’s travel and freight industries.

Cathay Pacific launched its four-times-weekly service to Chennai on 2 June, connecting passengers from around the world to one of India’s most important industrial and commercial centres.

The airline has significantly expanded its services to and from India following the conclusion of an air services agreement between the Hong Kong and Indian governments in December last year. At the beginning of 2008 the airline had just four flights a week to both Delhi and Mumbai. Now it operates 14 flights each week to Delhi, 10 flights a week to Mumbai and four to Chennai. In addition, Cathay Pacific’s sister airline, Dragonair, recently launched a daily service to the information technology hub Bengaluru (Bangalore).

Speaking at the Chennai inaugural celebration, Mr Slosar said that Cathay Pacific was pleased to be able to serve Delhi and Mumbai with eight flights a week, “but we always knew that wasn’t enough - especially given the remarkable growth of the two new economic powerhouses, India and China,” he said.

“We were delighted – and very excited – when the Indian and Hong Kong governments reached a new bilateral agreement late last year that gave us the opportunity to launch additional services. It was the dawning of a new era for Cathay Pacific in India. Together with its sister airline Dragonair’s Bengaluru service we now have 35 passenger flights a week, opening up new horizons for the travelling public.

“That all adds up to a very significant presence in India, which is important for our company and also for Hong Kong. We have been working hard to build the Hong Kong’s reputation as one of the world’s leading international hubs, and that hub position has been considerably strengthened with the launch of our new India services.”

Passengers to and from India can now connect through the Hong Kong hub to almost 120 destinations in Cathay Pacific’s international network and to more than 20 cities in Mainland China on sister airline Dragonair, providing a vital link between the two fastest-growing countries in the world.
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Old August 6th, 2008, 04:59 AM   #1159
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Cathay's woes expected to drag down earnings of Swire
4 August 2008
South China Morning Post

Higher fuel prices and slowing passenger demand will see Cathay Pacific Airways turn in disappointing interim results for the first half of the year, dragging down the earnings of parent company Swire Pacific, according to analysts.

A sharp half-year profit decline of 60 to 80 per cent was projected for Cathay from the HK$2.5billion earnings for the same period a year ago. Some analysts estimated that the airline's interim profit might be close to zero.

Stock analysts were quick to cut their forecasts after the company issued a profit warning early last month saying that the interim results would be "disappointing". In addition to rising fuel costs and government restrictions on Cathay's ability to raise fuel surcharges, the recent ruling by United States regulators to fine the airline US$60 million for its role in a fuel surcharge price-fixing conspiracy involving cargo flights came as another blow.

The airline's full-year earnings were also expected to fall significantly given the cautious prospects for the second half, with the most pessimistic forecast that Cathay would plunge into a loss.

CLSA analyst Robert Bruce forecast an 83 per cent decline in operating profit for Cathay this year as the rising cost base decimated margins.

"With the fuel cost rising 63 per cent from HK$24.6billion to HK$40.1billion, we expect the operating profit to decline from HK$7.7billion to HK$1.4billion with the margin narrowing from 10.3 per cent to 1.5 per cent," he said.

Mr Bruce said the increases in fuel surcharges were insufficient to cover the cost increase. Hong Kong regulations were keeping Cathay surcharges below its rivals, he added.

UBS projected that Cathay would report full-year earnings of HK$1.6billion and that the carrier's first-half net earnings would be close to zero due to high fuel costs. However, JPMorgan expected a 76 per cent drop in operating profit.

Swire Pacific is expected to take the hit from a decrease in Cathay's contribution and to report a fall in core earnings during the first-half period. Credit Suisse research analysts Cusson Leung and Ronney Cheung estimated that Swire's reported underlying earnings in the first half of the year would decline by 31 per cent year on year to HK$3.58billion.

They expected the contribution from aviation to decline by 61 per cent. Swire's other operations were expected to deliver an earnings increase of 10.5 per cent year on year, underpinned by an estimated 13 per cent rise in rental income, 20 per cent growth in the marine business and 43 per cent increase in beverage operations.

Credit Suisse said that Swire was likely to be the prime beneficiary of further decentralisation of the office market given the company's heavy exposure to the Quarry Bay area.

UBS analyst Eric Wong forecast that Swire would report an interim profit of HK$3.4billion on reduced aviation contribution and higher interest costs. Property rental income should increase by 18 per cent to HK$2.3billion. Despite the fall in Cathay's contribution, rising oil prices benefited Swire's offshore marine operations, he said.

For the whole of the year, Lehman Brothers expected Swire's underlying profit to decrease by 10 per cent year on year to HK$7.95 billion. On the property side, Swire's portfolio should still be fully let in the first half of the year and remained firm.

Lehman Brothers cautioned that office rentals had entered into an overshoot territory given the low vacancy levels, but this might change due to a slowing economy. But it expected Swire's rental income should still grow by 16 per cent this year due to a positive rental reversion and a reasonably healthy retail rental growth on strong domestic consumption.

JPMorgan expected Swire's full-year core profits to fall slightly to HK$8.31billion, taking into account a steep drop in profits expected from Cathay.

The brokerage firm said Swire had a hedge against the impact of rising oil prices on Cathay in the form of its offshore oil servicing division, which was expected to see very strong profit growth this year.
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Old August 6th, 2008, 09:06 AM   #1160
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Cathay Pacific Press Release:
Cathay Pacific Announces 2008 Interim Results

-- High fuel prices really hurts Cathay!
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