...Cathay Pacific [Case Analysis] Due to substantial deregulation of the airline industry in the 1980s, a highly competitive environment arose for airline carriers. Cathay Pacific, for one, was particularly efficient in making the most of this new environment, and this is largely attributable to how the airline has managed its IT operations. By outsourcing (mainly non-strategic) functions that were not core competencies, for example, they did not only cut down on costs but they also effectively reduced risks. So as the airline continued to grow, it rigorously transitioned from “strictly building and operating to acquiring and managing.” Facilitated by its global linkages, Cathay Pacific now found itself in a better position to identify key suppliers and infrastructure. This new stance allowed the airline to narrow searches down to optimal combinations of suppliers that remained competitive. Although this would later become a hindrance, as newfound partners would hold “partner” statuses that made it difficult for the airline to issue standard requests for pricing, it had an overall significant effect that put the company in a stronger position to compete. Cathay, did however, eventually replace the “smart-sourcing” strategy around 2004, when the new theme of corporate purchasing process was competition. smartsourcing: Under this new strategy, the airline focused on using fewer and longer-term suppliers that consistently demonstrated flexibility and competitiveness...
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...(2012) indicated the growth rate of China’s gross domestic product has resulted in a three-year low, a slow growth for industrial production as well as retail sales, contributing a slow growth rate at 4.4% in China's domestic passenger markets. In Lanman, S. and Panckhurst, P., (2012)'s news report, China’s export growth cooled to 9.2 percent in the first half of the year, a 24 percent decrease in the first six months of 2011, the figure reflected declining number in both cargo and passengers carrier for Cathay Pacific and China Southern Airways, accompany with the high jet fuel prices, the future in airlines industry is pessimistic.According to Wallis (2012), China Southern Airlines claimed there is 50% drop in net profit compare to last year, contributed by high jet fuel costs, losses in exchange rate (6.3760 against the dollar) and China’s slowing down economy due to Europe’s austerity measures and government debt burdens. On the other hand, its major rival Cathay Pacific announced billions dollars investment on more fuel efficient and nautical miles aircrafts airbus A350-1000. With better fuel efficiency aircraft and well-tailored flight patterns, Wallis (2012) believes it shall remain its competitive position in the industry.IATA (2012) believes that both the air travel and freight volumes are likely to show slow growth in the coming period due to deepening economic recession and consumer confident. Although the fuel price has a significant...
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...Analysis of Cathay Pacific Airlines General Environment Cathay Pacific was established in 1946 and is now the largest airline company in Hong Kong. It operates both passenger services and cargo services and operates in more than 30 countries throughout Asia, the Pacific, the Middle East, Africa, Europe and North America to more than 80 destinations. From Hong Kong, where its headquarter is based, Cathay operates 36 of their destinations in the Asia-Pacific region. Therefore the general environment in especially Hong Kong and the rest of the Asia-pacific region has an effect on Cathay Pacifics business procedure. The general environment is composed of factors that can have dramatic effects on a firm’s strategy and events and changes in the general environment can he hard to predict and even harder to control (Dess et al. 2012, p.87). The demographic segment of the general environment is the genetic and observable characteristics of a population (Dess et al. 2012, p. 87). Hong Kong’s population was in 2009 7.03 million. About 95% of the population are of Chinese descent. The majority are Taishanese, Chiu Chow, other Cantonese people, and Hakka. The remaining 5% of the population is non-ethnic Chinese people and consists of a South Asian population of Indians, Pakistanis, Neplaese, Vietnamese refugees, Europeans, Americans, Japanese and Koreans. This means that the population of Hong Kong consists of many different nationalities and in addition Hong Kong is one of the most...
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...According to the internal and external analysis and we found out there are some room for Cathay Pacific for compete more aggressively if it wishes to develop its business in the Asia region. Cathay Pacific already has had a good network within South East Asia and serves most major cities from Hong Kong with reasonable frequency. Currently most of those passengers who fly to Hong Kong on Cathay flights terminate their journey at that destination (with the possible exception of Taiwan). With Cathay already having a impressive long-haul network in place a smaller number of passengers are choosing to use Hong Kong as a ‘stopover’ in order to fly on to another destination. This is an area that Cathay Pacific can exploit. Whilst the Cathay serves most major cities with good frequencies and therefore covers a large geographical segment within Asia there is one area which Cathay is not well represented, China. Because of this Cathay looses out in three ways: o Loss in potential revenue from Chinese nationals wishing to visit Hong Kong and vice versa; and o Loss in potential revenue from Chinese nationals wishing to fly to Europe, the USA or Australia and potentially using Hong Kong as a ‘stop-over’ o Loss in potential revenue from international travellers coming from outside Asia who wish to visit China potentially using Hong Kong as a ‘stop-over’. As can be seen from the analysis Cathay Pacific Airways has a well respected brand and is a well run company that is able to make...
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...use. Dragonair: Company Background2,3,4 Hong Kong-based Dragonair was founded in May 1985 as a wholly owned subsidiary of Hong Kong Macau International Investment Co by local industrialist K.P. Chao. The airline started operations in July 1985 with a Boeing 737 and service between Hong Kong and Kota Kinabalu in Malaysia. With a fleet of only one aircraft, Dragonair was known in its early days as the “when-it’s-in-the-air-there’s-nothing-on-the-ground” airline. After much effort by Chao to rally support from both the Chinese central government and the British government, Dragonair began service to Phuket and six cities in mainland China in 1986. In 1990, CITIC Pacific, the Swire Group 5 and Cathay Pacific Airways (“Cathay Pacific”) acquired an 89% stake in Dragonair. After the acquisition, Cathay Pacific transferred its 1 In the aviation industry, a piece of equipment was usually deemed BER when the cost of repair exceeded 70–80% of the new equipment cost. 2 Wikipedia (2008) “Hong Kong Dragon Airlines Company Ltd.”, http://en.wikipedia.org/wiki/Dragonair (accessed June 2008). 3 Dragonair (2008) “About Dragonair”, http://www.dragonair.com/da/en_INTL/aboutus/aboutdragonair/history (accessed June...
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...Advantage for Cathay Pacific | |Background | | | |Cathay Pacific Airways announced 2014 annual results in March 2015, the company stated that the business outlook for 2015 looked to be improved when| |compared to the previous year. However, a number of factors had a significant negative impact on their business. | | | |The principal adverse factors were reduced passenger yield, the continued high fuel price and the increased competition on Hong Kong routes and | |within the region have led to price wars in a climate of economic uncertainty. The Hong Kong-based airline faces a potentially more daunting | |challenge: budget carriers. | | | |In response to the situation, Cathay Pacific continues to...
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...Background: - Cathay Pacific was founded in Hong Kong on september 24 1946 - it is held amongst two, Roy Farrel and Sydney de Kantzow - as mentioned in the video, in its early stages, cathay pacific only flew to few routes between hong kong, sydney, manila, singapore - when it bought butterfield and swore it expanded its fleet and its destinations routes to European and North American countries. - this has continued to the current days in their developments Future Forecast: - in the short term, revenue of cargo may increase because cathay pacific is introducing new cargo terminals in hong kong this year - the firm has ordered around 92 fleets expecting to introduce new flights and destinations which will allow it to increase Industry Comparison: - revenue: throughout the years, it is shown that british airways' revenue has been higher than cathay pacific, because of the financial crisis in 2008, they had begun to face negative drawbacks and growth, they began to operate in different markets and expand their fleets and destinations which had allowed their revenue to increase, british airways was bound to take such an action in order for them to keep gaining profit and remain in the industry, as the scale of the company grows the revenue will increase with it - expenses: we can also notice that both company's share similar expenses where as their revenues have a drastic difference, this shows that cathay pacific may be more efficient in delivering their service...
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...Hong Kong Dragon Airlines Case A In this case, Hong Kong Dragon Airlines was trying to figure out the appropriate discount rate in order to determine whether purchase or lease an engine for replacing the spare one. Since Dragon Airlines was acquired by another main Hong Kong airline company ‘Cathay Pacific’, we shall use the data of Cathay pacific to find out the weighted average cost of capital. Unfortunately, Cathay Pacific does not issue any bonds that there is no bond or credit rating to assist us calculate the cost of debt. I chose to use the credit rating of Singapore Airlines as an alternative, because according to Hoover’s.com, they have very similar size, revenue and net profit margin with Cathay Pacific. They are also main competitors to each other. The credit rating of Singapore Airline from 2003 to 2004 is not provided. Instead the credit rating is provided in the period of 2011-2012. According to their annual report of 2011-2012, roughly 80% of their financial assets are rated with grades of A to Aaa and 0% of them are rated at Baa. Therefore their credit rate is approximately Aa, in which this case, the bond yield spread over treasuries is 0.9%, the risk-free rate is 0.43% and the risk premium is 0.43%. By calculation, the cost of debt is 0.7% and cost of equity is 0.89% by using CAPM approach. After a brief discussion with Joseph Mann, the total equity is $32989 which equals the sum of share capital, reserves, and minority interest. Total debt is $22631 which...
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...2.Evaluation of Business Environment (SWOT/5-Forces Model) 1. Evaluate the progress Cathay Pacific has made on outsourcing their IT activities. Do their ideas make sense to you? Why? 1. Threat of new entrants--LOW * Large capital requirements * Industry regulation * Technical requirements * Pilot shortages * Government control () The airline industry requires large capital and high technical. Also, there are a lot of regulations within the industry. And many government now put pressures on new start-up aviation companies, take China as an example, Civil Aviation Administration of China now do not approve to set up new airline companies. New entrants into this field would face large barriers. Thus, the treat of new entrants is low. 2. Threat of substitutes—Medium * International routes-shipping * Domestic routes Long distance bus Railway High-speed rail… In the international routes, the substitute for airline is shipping. In domestic routes, the substitutes are long distance bus, railway, and high-speed rail. Although, these would take more time to reach destination. However, they are cost- effective choices especially the high-speed rail comparing with airplane. High-speed rail is gradually operating in a large scale with convenience and comfort. There is a saying that in the future, once the airplane could reach, so could high-speed rail. So we judge the threat of substitutes is medium. 3. Bargaining power of suppliers—LOW ...
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...Cathay Pacific Airways Introduction Cathay Pacific Airways was founded in 1946. It is an airline from Hong Kong. It takes passenger and cargo to over 120 cities world-wide. Its main base is at Hong Kong International Airport. In addition to the fleet of aircraft, these investments include catering, aircraft maintenance and ground handling companies, as well as the corporate headquarters at Hong Kong International Airport. Cathay Pacific and its subsidiaries and associates employ over 20,000 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 Kong Limited, an all cargo carrier that offers scheduled services in the Asia region, and is a shareholder in Hong Kong Dragon Airlines Limited. Cathay Pacific is one of the six airlines in the world to get a five star rating from Skytrax. It won "Airline of the Year" award from Skytrax in 2003, 2005 and 2009. Its sister airline is Dragonair which serves destinations in mainland China and Asia, the member of the oneworld global alliance whose combined network serves over 700 destinations worldwide. Anticipated problem/limitation We can found many information, data, literature in the internet and library, but it had many things that didn’t need. We need to look thought those information, then classify it and choose what we need. Also, there had many literatures in the internet...
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...Delta Airlines, USA 3rd. Emirates Airlines, UEA Module 1- Lesson 1 General Airline Knowledge Professional Diploma in Aviation & Hospitality Program Instructor: Mary TOH 11/22/2013 1 11/22/2013 2 Cathay Pacific Airways (CX) Founded: World War 2 Pilots: Aircraft: Headquarters: Subsidiaries: About Cathay Pacific http://www.youtube.com/watch?v=D4rIpBrCreA 11/22/2013 24 September 1946 Royal Farrell (American) & Sydney de Kantzow (Australian) DC3 – Betsy and Niki Hong Kong. Dragonair & Air Hong Kong (Cathay Pacific & DHL joint venture partners) 4 3 11/22/2013 Parent Company: Swire Pacific Alliance: Frequent flyer program: Fleet Size: Destinations: Oneworld The Marco Polo Club 133 including cargo 112 including cargo Airport Lounge 1. The Arrival 2. The Pier 3. The Wing 4. The Cabin 5. G16 Lounge 11/22/2013 5 11/22/2013 6 M1 _ Lesson 1 1 The Marco Polo Club The Marco Polo Club is an exclusive loyalty program that offers a range of privileges to their most frequent flyers. There are 4 tiers:1. Diamond 2. Gold 3. Silver 4. Green 11/22/2013 CX Slogan People They Make an Airline http://www.youtube.co m/watch?v=lz1RfUTC 7mI 7 11/22/2013 8 Members of oneworld Alliance: 1. 2. 3. 4. 5. Cathay Pacific, HKG American Airlines, USA British Airways, UK Finnair, Finland Iberia, Spain 9. Qantas, Australia 10. Royal Jordanian Airlines, Jordan 11. S7 Airlines, Russia 12. Air Berlin, Germany 13. Malaysian Airlines...
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...Competitor Analysis of Cathay Pacific Airlines Cathay Pacific Airways is an international airline registered and based in Hong Kong, offering scheduled cargo and passenger services to more than 110 destinations around the world. The main competitors of Cathay Pacific are Singapore Airlines and China Southern Airlines . In this competitor analysis for Cathay Pacific we will assess China Southern Airlines only. 1. What are the objectives of this competitor? The objectives of China Southern Airlines are as follows: * To build an international network-oriented airline with core competitiveness and sustainable profitability. * Core value of "customer first * striving for excellence * continuous innovation and contributing to the society", and the vision and mission of "becoming the most favorite airlines for both customers and employees 2. What is its current strategy? Currently, China Southern operates more than 460 passenger and cargo transport aircraft, including Boeing 777, 747, 757 & 737 and Airbus A380, 330, 321, 320, 319. The airline fleet is ranked among the world’s top six airlines (in terms of fleet size) and with Guangzhou and Beijing as its central hubs, the carrier boasts a substantial route network spanning more than 150 destinations in China and more than 40 destinations in Asia with service to Europe, America, Australia and Africa.. * Substantial Flight Capabilities China Southern continues to be a leader in the Chinese aviation...
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...Medical examinations ² Group selection methods ² Situational tests ² Assessment centers. So I think When Air China does its recruitment, the interviewer should try to know if the applicant is interested in this industry, and weather he/she can meet the changing situation of it, do some texts to find weather the applicant can give some good suggestions to solve the problems for Air China or not, and can ask some practical questions about something relevant to its cooperation with Cathay Pacific. 3．Transfer of Employees: Because of Air China’s changing structures, I think it should find and attracting suitable candidates and put workers in right positions. It is very import for Air China achieving its high goals, only the workers tallying the work demand and policy, can he do his best and get more profit for his company. So, Air China might switch its workers over according new situation. Also, since it will cooperate with Cathay Pacific, I think the two companies can exchange some excellent workers who know their own companies very well, it means learning good skills and qualities each other, and the workers can provide logical information quickly, this can make...
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...Strategic Management Group Project Virgin Atlantic Airways Limited Instructor: Mr. Audun Fiskerud Presented by: Mikael Tving Therkildsen - Jacob Brodersen – Jonas Ravn Nielsen - Gary Chuyu Fang Executive summary This report strategically analyses the Strategy Business Unit (SBU), passenger transfer service, for Virgin Atlantic Airways Limited. The strategic analysis contains investigation of certain key business areas of Virgin Atlantic, such as: defining whom the Virgin Atlantic customer is; understanding of the external environment issues of the airline industry; competitor analysis, and analysis of the Human Resources within the organization. Through the analysis of Virgin Atlantic Airways Limited, some issues for the company were uncovered. Especially two main issues should be considered as potential problems for Virgin Atlantic’s business unit and so action needs to be taken within these areas: 1. Lacking economy of scale (size of the company). 2. Increasing environmental awareness among customers. 1. Virgin Atlantic lacks economy of scale because of the size of the company and limited routes available. To be able to compete effectively and gain greater profits through economy of scale, Virgin Atlantic has to expand by opening new routes. The implementation of this will require strategic financial planning and adjustment of the company structure. It is likely that this process will take several years; however, this change is necessary to increase Virgin...
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...Hong Kong International Airport Terminal 1. Business Class and Marco Polo Club Members - Aisle B; Economy Class - Counters C1 and C2. Please arrive at least 45 minutes before departure. | | No Bags to check in? * Proceed directly to the gate and present your travel documents for checking at least 30 minutes before departure. | Important Reminders | | 1. Immigration and Security Regulations require that your name on the boarding pass must match that on your travel document. If there is a discrepancy, please contact your Airport Check-In counter for assistance. 2. You MUST cancel your check-in online at least 60 minutes before departure if you cannot travel as planned. Failure to do so will require you to contact Cathay Pacific to reissue your ticket before future travel is allowed. This may result in re-issuance fees and payment of any fare differences as per the ticket conditions. 3. You must present valid travel documents at the Boarding Gate Service Desk AT LEAST 30 MINUTES BEFORE DEPARTURE. 4. Please check your flight status online before departing for the airport and the gate number at the airport. 5. If you are transferring from another airline, please contact our transfer desk to update your baggage information. Printed on 25 Nov 2013 09:34 (GMT) | | |...
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