Cathay Pacific to fly more corporate travellers on way to faster growth

Mumbai: At a time when domestic airlines like Jet, Kingfisher, SpiceJet and GoAir are making huge losses, Asia’s third largest carrier Cathay Pacific is strengthening its operations in India. The Hong Kong-based airlines, which has a formidable presence in India, the Middle East and Australia, is planning to focus on Indian corporate travellers.
The airline says the load factor between India and Hong Kong in business class is still high compared to Hong Kong-US and Hong Kong-UK routes. The move to target the Indian corporate traveller is a fallout of declines in travellers in this class from the US and UK.
Cathay has increased its staff strength in India to 220 from just 80 in February last year. With an increase to 35 flights per week from 12 flights, Cathay witnessed a 250% growth last year.
The airline is also making some moves to cut costs. For this, the company plans to replace a few older aircraft with new fuel-efficient planes. Globally, Cathay suffered a loss of $85 million in the first-half of the current fiscal year due to the surge in aviation turbine fuel (ATF) costs.
Tom Wright, general manager (India, Middle East, Africa & Pakistan), Cathay Pacific told ET: “We are analysing different strategies to set off the losses due to the surge in ATF costs as the airline industry is passing through extremely difficult times. The carrier is banking on new fuel-efficient aircraft rather the old ones to save on cost.”
An industry analyst said for bigger airlines, the Indian market still offered a huge potential amid a global economic slowdown. He said even Cathay’s earnings would be hit hard if the US and UK economies slip into recession. Although crude oil prices have fallen from their peak, the price Cathay is paying is still higher, he pointed out.
09/10/08 Mithun Roy/Economic Times

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Categories: Foreign Oct 2008