Cathay Pacific

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Cathay Pacific
Cathay Pacific logo.svg
IATA ICAO Callsign
CX CPA CATHAY
Founded24 September 1946; 73 years ago (1946-09-24)
HubsHong Kong
Focus citiesTaipei–Taoyuan
Frequent-flyer program
  • Asia Miles
  • The Marco Polo Club
Alliance
Subsidiaries
Fleet size133
Destinations79
Parent companySwire Pacific
Traded asSEHK: 293
HeadquartersCathay City, Hong Kong International Airport, Chek Lap Kok, Hong Kong[1]
Key people
RevenueIncrease HK$111.060 billion (2018)[2]:58
Operating incomeIncrease HK$3.595 billion (2018)[2]:58
ProfitIncrease HK$2.345 billion (2018)[2]:58
Total equityIncrease HK$63.936 billion (2018)[2]:59
EmployeesMore than 32,400 (2018, incl. subsidiaries)[2]:27
Websitecathaypacific.com
Cathay Pacific Airways Limited
Traditional Chinese國泰航空有限公司
Simplified Chinese国泰航空有限公司
Literal meaningGwok taai Aviation Limited Company
Cathay Pacific Airways
Traditional Chinese國泰航空
Simplified Chinese国泰航空
Cantonese YaleGwoktaai Hòhnghūng
Literal meaningGwok taai Aviation
Brand name in Chinese
Traditional Chinese國泰
Simplified Chinese国泰
Cantonese YaleGwoktaai
Literal meaningPeace and prosperity

Cathay Pacific Airways Limited (CPA), also known as Cathay Pacific or Cathay, is the flag carrier of Hong Kong, with its head office and main hub located at Hong Kong International Airport. The airline's operations and subsidiaries have scheduled passenger and cargo services to more than 190[4][5] destinations in more than 60 countries worldwide including codeshares and joint ventures. Cathay Pacific operates a fleet consisting of Airbus A330, Airbus A350 and Boeing 777 wide-body aircraft.[6] Cathay Pacific Cargo operates two models of the Boeing 747. Wholly owned subsidiary airline Cathay Dragon operates to 44 destinations in the Asia-Pacific region from its Hong Kong base. In 2010, Cathay Pacific and Cathay Pacific Cargo, together with Cathay Dragon, carried nearly 27 million passengers and over 1.8 million tons of cargo and mail.

The airline was founded on 24 September 1946 by Australian Sydney H. de Kantzow and American Roy C. Farrell. The airline celebrated its 70th anniversary in 2016; and as of March 2018, its major shareholders are Swire Pacific. It is reciprocally one of the major shareholders of Air China and is positively responsive to pressure from the Chinese Communist Party.

Cathay Pacific is the world's tenth largest airline measured by sales, and fourteenth largest measured by market capitalisation.[7] In 2010, Cathay Pacific became the world's largest international cargo airline, along with main hub Hong Kong International Airport as the world's busiest airport measured by cargo traffic.[8]

It is one of the founding members of the Oneworld alliance. Cathay Pacific's subsidiary Cathay Dragon is an affiliate member of Oneworld.

History[edit]

1946–1960: The early years[edit]

A Douglas DC-3 named Betsy, Cathay Pacific's first aircraft, in the Hong Kong Science Museum.
Cathay Pacific DC-3 Niki.
Niki, a DC-3 painted to imitate the appearance of the carrier's second aircraft, outside Cathay City

Cathay Pacific Airways was founded on 24 September 1946 in Hong Kong. Sydney "Syd" de Kantzow, Roy Farrell,[9][10][11] Neil Buchanan, Donald Brittan Evans and Robert "Bob" Stanley Russell were the initial shareholders.[10] Buchanan and Russell already worked for de Kantzow and Farrell at Roy Farrell Import-Export Company, the predecessor of Cathay Pacific,[12][11][13] which was initially headquartered in Shanghai.[9][10][14] Both de Kantzow and Farrell were ex-air force pilots who had flown the Hump, a route over the Himalayan mountains.[15] Farrell purchased the airline's first aircraft, a Douglas DC-3, nicknamed Betsy, at Bush Field, New York City in 1945.[12]:29 The company began freight services on 28 January 1946 from Sydney to Shanghai, after Farrell and Russell flew the plane to Australia and obtained a license to carry freight (but not passengers) earlier that month.[12]:36–37 Its first commercial flight was a shipment of Australian goods.[12]:37 The profitable business soon attracted attention from the Republic of China government officials.[12]:44 After several instances where the company's planes were detained by authorities in Shanghai,[12]:44 on 11 May 1946 the company relocated, flying its two planes to Hong Kong.[16] Farrell and de Kantzow re-registered their business in Hong Kong on 24 September 1946 as Cathay Pacific Airways Limited,[9][10] while another sister company, The Roy Farrell Export Import Company (Hong Kong) Limited, was incorporated on 28 August 1946[10] and chartered some flights from Cathay.[12]:58 (According to International Directory of Company Histories, two companies were formed for tax purposes.[15])

They named the airline Cathay, the ancient name given to China, and Pacific because Farrell speculated that they would one day fly across the Pacific[12]:56 (which happened in the 1970s).[17] Moreover, to avoid the name "Air Cathay" as it had already been used in a comic.[12]:55 The Chinese name for the company ("國泰") was not settled on until the 1950s.[citation needed] It comes from a Chinese idiom meaning "peace and prosperity"[18] and was at the time often used by other businesses called "Cathay" in English.

According to legend, the airline's unique name was conceived by Farrell and some foreign correspondents at the bar of the Manila Hotel,[9][12]:55 while another narrative was the name was taken in the Cathay Hotel in Shanghai Bund, during drinking and brainstorming, and choosing Cathay was to avoid the word China in the airline name.[12]:53 On Cathay Pacific's maiden voyage, de Kantzow and Peter Hoskins flew from Sydney to Hong Kong via Manila.[12]:53 The airline initially flew routes between Hong Kong, Sydney, Manila, Singapore, Shanghai, Saigon, Bangkok,[12]:58 with additional chartered destinations.[12]:59 The airline grew quickly. By 1947, it had added another five DC-3s and two Vickers Catalina seaplanes to its fleet.[12]:234[15]

In 1948, a new legal person of Cathay Pacific Airways was incorporated,[10][15] with John Swire & Sons (now known as Swire Group),[10][19] China Navigation Company, Australian National Airways being the new shareholders of the new entity,[10] acquiring the assets from the old legal person;[10] the old legal person, was renamed into Cathay Pacific Holdings, as well as retaining 10% shares of the new Cathay Pacific Airways.[10] de Kantzow, Farrell and Russell were the shareholders of Cathay Pacific Holdings at that time.[10] It was reported that the colonial British government of Hong Kong, required the airline was majority-owned by the British. Despite de Kantzow being a British subject through his Australian roots, Farrell was an American, thus forcing them to sell their majority stake.[12]:79[15] Under Swire's management, de Kantzow remained in the airline until 1951,[12]:123[15] while Farrell had sold his minority stake in Cathay Pacific soon after Swire's takeover in 1948, due to his wife's health problems.[12]:115[15] He returned to Texas and became a successful businessman.[12]:115

Swire later acquired 52% of Cathay Pacific Airways.[citation needed] As of 31 December 2017, the airline is still 45% owned by Swire Group through its subsidiary Swire Pacific Limited, as the largest shareholder.[20][21] However, Swire Group also formed a shareholders' agreement with the second largest shareholder Air China (which was controlled by state-owned China National Aviation Holding), which Cathay Pacific and Air China had a cross ownership.[21]:41, 104

In the late 1940s, the Hong Kong government divided the local aviation market between Cathay Pacific and its only local competitor, the Jardine Matheson-owned Hong Kong Airways:[12]:117–118 Cathay Pacific was allocated routes to the south (including South-East Asia and Australia), while Hong Kong Airways was allocated routes to the north (including mainland China, Korea, and Japan). The situation changed with the establishment of the People's Republic of China and the Korean War, which reduced the viability of the northern routes. In 1959, Cathay Pacific acquired Hong Kong Airways,[15] and became the dominant airline in Hong Kong.

Under Swire, another important sister company, HAECO, was established in 1950.[12]:130 Nowadays, it's one of the major aeroplane repair service companies of Hong Kong with divisions in other cities of China.

1960–1990: Expansion[edit]

A Cathay Pacific Convair 880, as operated from 1964 until 1974.

The airline prospered in the late 1950s and into the 1960s, helped by buying its archrival, Hong Kong Airways, on 1 July 1959.[12]:118 Between 1962 and 1967, the airline recorded double digit growth on average every year and became one of the world's first airlines to operate international services to Fukuoka, Nagoya and Osaka in Japan.[9] In 1964, it carried its one millionth passenger[22] and acquired its first jet engine aircraft, the Convair 880.[15]

Lockheed L-1011 TriStar at Osaka International Airport
A Lockheed L-1011 TriStar at Osaka International Airport in 1970–1994 livery with the British Union Flag and the logo of parent company Swire.

In the 1970s, Cathay Pacific installed a computerised reservation system and flight simulators. In 1971, Cathay Pacific Airways received the first wide-body aircraft 707-320B produced by Boeing. The new aircraft sported a new lively green colour known as Brunswick green.[23] In 1974, Cathay Pacific almost purchased the McDonnell Douglas DC10 to open a new flight route. During the flight route application process with the British government, due to the pressure from the British government, Cathay Pacific Airways changed the application to apply for a route from Hong Kong to London using a Boeing 747. The application was ultimately rejected.[12][page needed][24] In 1979, the airline acquired its first Boeing 747 and applied for traffic rights to fly to London in 1980, with the first flight taking place on 16 July. By 1973, Cathay Pacific were carrying one million people every year.[25] Expansion continued into the 1980s. Due to the worldwide economic boom, more business travelers, tourists, and cargo were flying more than ever before. Cathay Pacific kept its nonstop service to Vancouver in 1983, with continuing service on to San Francisco in 1986 when an industry-wide boom encouraged route growth to many European and North American centres including London, Brisbane, Frankfurt, Amsterdam, Rome, Paris, Zurich and Manchester.[22] In 1982, Cathay Pacific Airways set up Cathay Pacific Cargo, which provided cargo service to ingratiate the trend of Hong Kong becoming one of the largest re-export trading ports of the world. The airline's long-haul dedicated cargo services started a twice a week with Hong Kong-Frankfurt-London service operated jointly with Lufthansa.[26]

On 15 May 1986, the airline went public and was listed in the Main Board of the Stock Exchange of Hong Kong.[27]

1990–2000: Rebranding, renewal, and Oneworld[edit]

In January 1990, Cathay Pacific and its parent company, Swire Pacific, acquired a significant shareholding in Dragonair, and a 75% stake in cargo airline Air Hong Kong in 1994.[28][29] During the early 1990s, the airline launched a program to upgrade its passenger service. The green and white striped livery was replaced with the current "brushwing" livery.[30] In 1994 the airline invested in a new corporate identity, with a 23 million Hong Kong dollar program to update its image. The fleet was expected to have the new logo within four years.[31]

VR-HOR, a Boeing 747-400 that served Cathay Pacific from 1990 to 2015 in the green lettuce livery.
Top: The plane still bearing the Union Flag taxing at Paris Charles de Gaulle International Airport (CDG / LFPG) in May 1993.
Bottom: The same aircraft in 1995 at Frankfurt Airport without the Union Flag, two years before the 1997 handover.

The airline began a US$9 billion fleet replacement program during the mid-1990s that gave it one of the youngest fleets in the world.[30] In 1996, CITIC Pacific increased its holdings in Cathay Pacific from 10% to 25%, while the Swire Group holding was reduced to 44% as two other Chinese companies, CNAC(G) and CTS, also bought substantial holdings.[32] According Cathay Pacific's entry in the volume 1 of International Directory of Company Histories, the disinvestment of 12.5% stake of Cathay Pacific by Swire Pacific, to a Chinese state-owned company, was regard "as evidence of China's sincerity in maintaining the prosperity of Hong Kong."[19]

On 1 July 1997, the administration of Hong Kong was transferred from the UK to the People's Republic of China as part of the Hong Kong handover. Most of the airline's aircraft were registered in Hong Kong with a registration beginning with "VR". Under the terms of an agreement within the Sino-British Joint Liaison Group (JLG), all registrations were changed by December 1997 to the prefix "B" used by the People's Republic of China and the Republic of China (Taiwan).[33] Cathay Pacific aircraft formerly carried a painted UK Union Flag on the tail, but these were removed several years before the 1997 takeover.[34][35]

On 21 May 1998, Cathay Pacific took the first delivery of the Boeing 777-300 at a ceremony in Everett.[36] On 21 September 1998, Cathay Pacific, together with American Airlines, British Airways, Canadian Airlines, and Qantas, co-founded the Oneworld airline alliance.[37][38] Cathay Pacific temporarily took over the domestic and international operations of Philippine Airlines during its fourteen-day shutdown from 26 September to 7 October 1998.[39] The airline was hurt by the Asian financial crisis of the late 1990s, but recorded a record HK$5 billion profit in 2000.[40]

New Hong Kong International Airport and transpolar flights[edit]

On Monday, 6 July 1998, at 00:00 HKT, Kai Tak International Airport saw its last commercial departure, Cathay Pacific Flight 251 (a Boeing 747-400 with reg B-HOW) to London Heathrow Airport, after over 73 years of operation. The next day, Cathay Pacific Flight 889 (a Boeing 747-400 from New York John F. Kennedy International Airport piloted by Captain Paul Horsting with reg B-HUJ), was the first arrival to the new Hong Kong International Airport at Chek Lap Kok, Hong Kong. Also on board were Captain Mike Lowes and First Officer Kelvin Ma.[41] This flight was also the world's first nonstop transpolar flight from New York to Hong Kong. The flight, dubbed Polar One, takes about 16 hours between Hong Kong and New York Kennedy, saving about three to four hours compared to the one-stop flight via Vancouver. It is one of the longest in the world at 8,055 mi (12,963 km).[42]

2000–2010: Industrial troubles and acquisitions[edit]

Cathay Pacific operated three Airbus A340-600s from 2002 to 2009.

The 2000s saw Cathay Pacific experience labour relations issues while completing the acquisition of Dragonair.

On 28 November 2002, the airline took delivery of its first Airbus A340-600 aircraft at a ceremony at the Airbus factory in Toulouse. Cathay Pacific was the launch customer in Asia for the A340-600 and the aircraft was the first of three leased from International Lease Finance Corporation (ILFC).[43] On 1 December 2005, Cathay Pacific ordered 16 Boeing 777-300ER aircraft, four on lease from ILFC, to be delivered between September 2007 and July 2010, plus options on 20 more of the type, two of which were converted to orders on 1 June 2006. The airline also ordered 3 more A330-300 on the same day, with the delivery of the aircraft scheduled for 2008.[44][45][46] On 7 August 2007, Cathay Pacific ordered five more wide-body Boeing 777-300ER aircraft for a total price of about US$1.4 billion, increasing its commitment to a total of 23 of the aircraft type.[47]

The 49ers – employment dispute[edit]

In 2001, the Hong Kong Aircrew Officers Association (HKAOA) launched a "work to rule" campaign to further its campaign for pay improvements and changes to roster scheduling practices. The action involved pilots refusing to work flights that were not scheduled on their roster. Although this alone did not cause extensive disruption, rostered pilots began to call in sick for their flights. Combined with the work to rule campaign, the airline was unable to cover all of its scheduled flights, and cancellations resulted. Cathay Pacific steadfastly refused to negotiate with the HKAOA under threat of industrial action.[48]

A Cathay Pacific Airbus A330-300 at Chennai International Airport
A Cathay Pacific Airbus A330-300 at Taiwan Taoyuan International Airport.

On 9 July 2001, reportedly following a comprehensive review of the employment histories of all its pilots, the company fired 49 of its 1,500 pilots. This group became known colloquially as "the 49ers". Nearly half of the fired pilots were captains, representing five percent of the total pilot group. Of the 21 officers of the HKAOA, nine were fired, including four of the seven union negotiators.[49]

Then-HKAOA president Captain Nigel Demery took the view that "the firing was pure intimidation, a union-bust straight up, designed to be random enough to put the fear in all pilots that they might be next, no reason given".[49] The dismissals were challenged in a number of legal proceedings, but none were reinstated. The airline later offered the 49 pilots it terminated in 2001 the chance to reapply for pilot positions with its cargo division, guaranteeing such applicants first interviews, subject to passing psychometric testing. Nineteen former employees applied and twelve were offered jobs.

On 11 November 2009, 18 of the 49ers succeeded in the Hong Kong Court of First Instance concerning their joint claims for breach of contract, breach of the Employment Ordinance, and defamation.

Judge Anselmo Reyes ruled that the airline had contravened the Employment Ordinance by dismissing the pilots without a valid reason, adding that they had been sacked primarily because of union activities. He also held that remarks by then chief operating officer Philip Chen Nanlok and current chief executive Tony Tyler after the sackings were defamatory. The judge handed the pilots a victory in their long-running legal battle, with individual awards of HK$3.3 million for defamation together with a month's pay and HK$150,000 for the sackings.

On 24 December 2010, judges Frank Stock, Susan Kwan and Johnson Lam of the Court of Appeal overturned the judgment of the lower court to the extent that the claim for wrongful termination of the contract was dismissed. The finding that Cathay Pacific wrongly sacked the 18 pilots for their union activities was upheld. The court upheld the defamation claim but reduced the damages for the defamatory comments made by Cathay Pacific management. The judges also modified the judgment awarding payment of legal costs to the pilots and instead said that they should now pay some of Cathay's costs.[50]

The leader of the 49er Plaintiffs, Captain John Warham, launched a book titled The 49ers – The True Story on 25 March 2011.[51]

The pilots were awarded leave on 26 October 2011 to take their case to the Court of Final Appeal. The matter was heard before Hon. Mr. Justices Bokhary, Chan and Ribeiro who are all Permanent Judges of the Court of Final Appeal. The matters to be decided upon by the Court concerned wrongful termination of contract and the level of damages for defamation. The case was heard by the Court of Final Appeal on 27 August 2012.

On 26 September 2012, 11 years after they were sacked, the 49ers were finally judged[52] to have won the 3 prime issues of their legal case: breach of contract, breach of the Employment Ordinance, and defamation. The Court of Final Appeal agreed with the Court of Appeal's methodology for reducing the defamation damages. However, it reinstated one month's salary for each of the 49ers.

Regarding breach of contract,[53] the overall picture leading to dismissal and events immediately after were analysed by the courts, not just the dismissal letter. Regarding the Employment Ordinance, an important aspect was that the judge defined the scope of "union activities" and its protection for workers in Hong Kong. The Court concluded: "Accordingly, most (possibly all) union-sponsored action is potentially protected by s 21B(1)(b), but if the action is not carried out "at [an] appropriate time", it is excluded from the provision". There was no challenge by Cathay Pacific to the Court of Appeal's decision to uphold the original Judge's conclusion that the statements made by Cathay Executives were defamatory of the plaintiffs.

John Warham, referring to the effect the fight has had on pilots' families, said: "In terms of human life, three people are dead because of what Cathay Pacific did to us. That's on their conscience, I hope they can live with that."[54]

Acquisition and downsizing of Dragonair[edit]

On 28 September 2006, the airline underwent a shareholding realignment under which Dragonair became a wholly owned subsidiary but continued to operate under its brand. Acquiring Dragonair meant gaining more access to the restricted, yet rapidly growing, Mainland China market and more opportunities for sharing of resources. CNAC, and its subsidiary, Air China, acquired a 17.5 percent stake in Cathay Pacific, and the airline doubled its shareholding in Air China to 17.5 percent. CITIC Pacific reduced its shareholding to 17.5 percent and Swire Group reduced its shareholding to 40 percent.[55][56][57]

Twinjet side view on tarmac
A Dragonair Airbus A320-200.

Dragonair had originally planned significant international expansion. It was already operating services to Bangkok and Tokyo, and was to have a dedicated cargo fleet of nine Boeing 747-400BCF aircraft by 2009 operating to New York, Los Angeles, Chicago, San Francisco and Columbus.[58] It had also acquired three Airbus A330-300 aircraft to commence services to Sydney and Seoul.[59]

Following the acquisition by Cathay Pacific, Dragonair's proposed expansion plans underwent a comprehensive route compatibility analysis with the Cathay network to reduce duplication. Dragonair services to Bangkok and Tokyo were terminated, and new services launched to Sendai, Phuket, Manila, and Kathmandu. With the merging of similar departments at the two previously separate airlines, some Dragonair staff have had their employment contracts transferred to Cathay Pacific, except Dragonair Pilots and Cabin Crew and others made redundant due to the efficiencies gained in the merger. This resulted in an approximately 37 percent decrease in the amount of staff contractually employed by Dragonair.[citation needed]

In January 2016, Cathay Pacific announced it was rebranding Dragonair as Cathay Dragon.[60]

Economic challenges[edit]

A Cathay Pacific Boeing 777-300ER arrives at London Heathrow Airport (2015).

To celebrate the airline's 60th anniversary in 2006, a year of roadshows named the "Cathay Pacific 60th Anniversary Skyshow" was held where the public could see the developments of the airline, play games, meet some of the airline staff, and view vintage uniforms. Cathay Pacific also introduced anniversary merchandise and in-flight meals served by restaurants in Hong Kong in collaboration with the celebrations.[61]

In June 2008, Cathay Pacific entered into a plea bargain with the United States Department of Justice in respect of antitrust investigations over air cargo price-fixing agreements. It was fined US$60 million. The airline has subsequently set up an internal Competition Compliance Office, reporting to chief operating officer John Slosar, to ensure that the Group complies with all relevant competition and antitrust laws in the jurisdiction in which it operates. The breaches for which Cathay Pacific Cargo were being investigated in the US were not illegal under Hong Kong competition law.[62][63]

In September 2008, three of Cathay Pacific's top ten global accounts, Lehmann Brothers, AIG and Merrill Lynch, hit financial trouble.[64]

A Cathay Pacific Boeing 747-400 at Singapore Changi Airport.

In March 2009, the airline reported a record full-year loss of HK$8.56 billion for 2008, which was also the carrier's first since the 1997 Asian Financial Crisis. The record loss included fuel-hedging losses of HK$7.6 billion and a HK$468 million charge for a price-fixing fine in the US It had to scrap its final dividend. The hedging losses were a result of locking in fuel prices at higher than the prevailing market price. As of the end of 2008, Cathay Pacific has hedged about half of its fuel needs until the end of 2011. The airline at the time estimated that it would face no further cash costs from the hedges if the average market price stood at US$75, enabling it to recoup provisions it made in 2008.[65]

The flattening out of fuel prices 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 destinations, ad hoc cancellations on other routes, deferred capital expenditure, parked aircraft and introduced a Special Leave Scheme for staff to conserve money.[66] According to CEO Tony Tyler, the yield from passengers was "hugely down" and the airline had lost "a lot of premium traffic". He noted that it could take 20 passengers in economy to make up for the lost revenue of one fewer first class passenger flying to New York from Hong Kong.[67]

Current developments[edit]

Cathay Pacific and Cathay Dragon aircraft at Hong Kong International Airport.

In 2010, the airline set another record high profit, amounting to HK$14.05 billion despite record losses set in the same decade. At the same time, Cathay Pacific had taken delivery of several new aircraft types, including the Airbus A330-300 and Boeing 777-300ER.[68] Tony Tyler left his position as CEO at the airline on 31 March 2010 to pursue his new job at the IATA. Chief operating officer John Slosar had succeeded as the new CEO.[69] In addition, New Zealand's Commerce Commission had dropped charges against Cathay Pacific concerning the air cargo price-fixing agreements.[70] In 2014, the airline underwent the largest network expansion in recent years which included the addition of links to Manchester, Zurich and Boston.

On 8 October 2016, Cathay Pacific retired their last passenger Boeing 747 (a 747-400 with reg B-HUJ) with a farewell scenic flight around Hong Kong after over 35 years of service of the type. Cathay operated the 747 since August 1979, when it was inaugurated on services to Australia.[71]

During the first half of 2016, Cathay Pacific's passenger yields fell 10 per cent, to the lowest in seven years as competing airlines from Mainland China increased direct service to the U.S. and Europe, hurting the company's revenue from its Hong Kong hub.[72] In October, Cathay Pacific scrapped its profit forecast for the second half of the year, less than two months after its issuance.[73]

From 15 September 2016, Cathay Pacific decided to reintroduce fuel surcharge on many flights after its half-year net profits dropped over 80% and it suffered HK$4.5 billion loss from wrong bets on fuel prices.[74] As of September 2016, Oil prices were halved from 2014 and stayed below US$50 a barrel.[74]

2018 data breach[edit]

The airline had a data breach in 2018.[75] Data of around 9.4 million passengers was compromised during the breach, with 860,000 passport numbers, 245,000 Hong Kong identity card numbers, 403 expired credit card numbers, and 27 credit card numbers without CVV being accessed. However, no passwords were stolen. The breach was suspected in March 2018, but was confirmed only in May 2018.[76][77]

2017–2019 transformation[edit]

Under new leadership, the airline started to transform its business after suffering from 2 years of consecutive loss. The strategy focuses on 5Ps - Places, Planes, Product, People, and Productivity to find new sources of revenue, deliver more value to its customers and improve efficiency and productivity.[78][79]

The airline restructured its organization to be more agile and faster in decision making as well as responding to customers' needs. It has also launched 13 new routes since 2017, introduced a wide range of changes to its service, including bringing back hot meals on its most busy route between Hong Kong and Taipei,[80] designed an inflight menu that features famous Hong Kong dishes[81] served in all cabins, and revamped its Business Class service proposition[82] to provide more choice, more personalization, better presentation and improved quality in its food and beverages offerings.

The airline has also invested significantly in other hard product and digital offerings such as an upgraded website, new or refurbished lounges across its network, including the first airline lounge yoga studio[83] at The Pier - Business in Hong Kong. Wifi was introduced in 2017 and will be retrofitted across its fleet by 2020.[84]

In February 2019, the airline issued a profit alert to the Hong Kong Stock Exchange indicating a profit of HK$2.3 billion for the 2018 financial year, signalling early signs of success of its transformation.[85]

Acquisition of HK Express[edit]

On 27 March 2019, Cathay Pacific officially announced it would acquire HK Express, the only low-cost carrier in Hong Kong, citing to "expect synergies in generating a new business model and is a practical way to support long-term development and to enhance competitiveness". The transaction takes Cathay Pacific HK$4.93 billion total. The transaction is closed in July 2019 and HK Express has become Cathay Pacific's wholly owned subsidiary.[86][87]

2019 Hong Kong protests[edit]

During the 2019 Hong Kong anti-extradition bill protests Cathay Pacific employees participated in protests at Hong Kong International Airport. The Beijing government which is a shareholder in Cathay Pacific ordered Cathay to suspend any employees that participated in the protest. Cathay chairman John Slosar responded saying: "We employ 27,000 staff in Hong Kong doing all sorts of different jobs... we certainly wouldn't dream of telling them what they have to think about something."[88] Cathay Pacific later suspended a pilot who was arrested during a protest, and CEO Rupert Hogg declared their support to the government, and reiterated that employees who violated the company's code of conduct could be dismissed.[89] On 16 August, Hogg resigned due to "intense criticism" from Chinese authorities as a result of Cathay staff participating in the protests.[90] "Chief customer and commercial officer", Paul Loo also resigned.[91] By late September, Cathay Pacific and Cathay Dragon had terminated the employment of 31 aviation professionals or forced their resignations on the basis of their participation in protests or expressions of support for them.[92][93]

Corporate affairs and identity[edit]

Cathay City
Cathay City, the airline's head office, located at Hong Kong International Airport.

Cathay Pacific's head office, Cathay City, is located at Hong Kong International Airport.[1] Cathay City was scheduled to be built in increments between April and September 1998.[94] The headquarters opened in 1998.[95] Previously the airline's headquarters were at the Swire House, which was a complex in Central named after the airline's parent company.[96]

Subsidiaries and associates[edit]

Cathay Pacific has diversified into related industries and sectors, including ground handling, aviation engineering, inflight catering.[97]

Companies with Cathay Pacific Group stake include:

Company Type Principal activities Incorporated in Group's Equity Shareholding
Air China Corporate Airline China 20%[98]
Air China Cargo Joint Venture Cargo airline China 49%**[98]
AHK Air Hong Kong Limited Subsidiary Cargo airline Hong Kong 100%[98]
Airline Property Limited Subsidiary Property Investment Hong Kong 100%[98]
Airline Store Property Limited Subsidiary Property Investment Hong Kong 100%[98]
Asia Training Property Limited Subsidiary Property Investment Hong Kong 100%[98]
Asia Miles Limited Subsidiary Travel Reward Hong Kong 100%[98]
Cathay Holidays Limited Subsidiary Tour Operator Hong Kong 100%[98]
Cathay Pacific Aero Limited Subsidiary Financial Services Hong Kong 100%[98]
Cathay Pacific Aircraft Lease Finance Limited Subsidiary Aircraft Leasing Hong Kong 100%[98]
Cathay Pacific Aircraft Services Limited Subsidiary Aircraft Acquisition Isle of Man 100%[98]
Cathay Pacific Catering Services (HK) Limited Subsidiary Catering services Hong Kong 100%[98]
Cathay Pacific MTN Financing Limited Subsidiary Financial services Cayman Islands 100%[98]
Cathay Pacific Services Limited Subsidiary Cargo Hong Kong 100%[98]
Cebu Pacific Catering Services Inc. Joint Venture Airline catering Philippines 40%[98]
Dell Fresh Limited Subsidiary Catering Hong Kong 100%[98]
Ground Support Engineering Limited Joint Venture Airport ground engineering support and equipment maintenance Hong Kong 50%[98]
Global Logisticcs System HK Company Limited - Air Cargo Computing Hong Kong 95%[98]
Guangzhou Guo Tai Information Processing Company Limited Subsidiary Information processing China 100%[98]
HAECO ITM Ltd. Joint Venture Inventory technical management services Hong Kong 30%[98]
Hong Kong Airport Services Limited Subsidiary Ground handling Hong Kong 100%[98]
Hong Kong Aviation and Airport Services Limited Subsidiary Propert Investment Hong Kong 100%[98]
Hong Kong Dragon Airlines Limited Subsidiary Airline Hong Kong 100%[98]
Hong Kong Express Airways Subsidiary Airline Hong Kong 100%[99]
LSG Lufthansa Service Hong Kong Limited - Airline catering Hong Kong 32%[98]
Shanghai International Airport Services Co., Limited Joint Venture Ground handling China 25%[98]
Snowdon Limited Subsidiary Financial services Hong Kong 100%[98]
Troon Limited Subsidiary Financial services Hong Kong 100%[98]
Vogue Laundry Service Limited Subsidiary Laundry and Dry Cleaning Hong Kong 100%[98]

**Shareholding held through subsidiary at 25%, another 24% held through an economic interest with total holding at 49%

Livery[edit]

A Boeing 777-300ER painted in the 1994–2015 livery landing at Hong Kong International Airport.
A Boeing 777-300ER in Cathay Pacific's latest livery

Before November 1994, all Cathay Pacific aircraft used a "green lettuce" livery and carried the British flag on the empennage. After the handover, aircraft carry the Brand Hong Kong logo and with HONG KONG or in Chinese 香港 under or beside the Brand Hong Kong logo instead of using the Hong Kong Special Administrative Region (HKSAR) flag. The HKSAR flag has never appeared on any aircraft.

All Cathay Pacific aircraft carry the following livery, logos and trademarks: the "brushwing" livery on the body and on the vertical stabiliser, introduced in the early 1990s, and was first deployed on a Boeing 747-400 (VR-HOT, re-registered as B-HOT), ahead of the launch of Airbus A340 service for Cathay Pacific. It also features the "Asia's world city" brandline, the Brand Hong Kong logotype and the dragon symbol; the Oneworld logo and the Swire Group logo.[30][100][101]

The brushwing logo consists of a calligraphic stroke against a green background; the stroke is intended to appear like the wing of a bird. The previous logo, consisting of green and white stripes, was in place from the early 1970s until 1994.[31]

In November 2015, the airline revealed a refreshed version of its previous livery, featuring a simpler paint scheme while maintaining their trademark brushwing on an all-green tail.[102] It was first unveiled on a Boeing 777-300ER (B-KPM), in preparation for the delivery of the first Airbus A350 for Cathay Pacific. The second aircraft was a freighter aircraft, Boeing 747-400ERF (B-LIA).

Destinations[edit]

Main article: List of Cathay Pacific destinations

Cathay Pacific serves 79 destinations (including cargo), but not including codeshare in 46 countries and territories on five continents, with a well-developed Asian network. The airline serves many gateway cities in North America and Europe, with easy connections with its Oneworld and codeshare partners, American Airlines and British Airways via Los Angeles and London, respectively. Also, the airline serves 10 French cities via a codeshare partnership with French national rail operator, SNCF, from Paris. The airline also has access to over 17 destinations in China through its subsidiary, Cathay Dragon.[103]

Codeshare agreements[edit]

Cathay Pacific has codeshare agreements with the following airlines:[104]

The airline also has a codeshare agreement with French high speed trains (SNCF) from TGV station at Paris-Charles de Gaulle Airport to ten French cities.[103][112] as well as codeshare agreement with ferry operators - Cotai Jet, Turbo Jet and CKS to connect passengers from Hong Kong to Macao, Zhuhai, Shenzhen, Shekou and Guangzhou in the Greater Bay Area.

Fleet[edit]

A Cathay Pacific Airbus A350-1000 XWB taking off from Hong Kong International Airport.
Main article: Cathay Pacific fleet

Cathay Pacific operates an all-wide-body, twin-engine commercial fleet composed of Airbus A330, Airbus A350, Boeing 777 aircraft and a Boeing 747 cargo fleet.[6] The airline also has more Airbus A350 and Boeing 777X aircraft on order.

Loyalty programs[edit]

Cathay Pacific has two loyalty programs: The Marco Polo Club (The Club), the loyalty program, and Asia Miles, the travel reward program. Members of The Club are automatically enrolled as Asia Miles members.

Marco Polo Club[edit]

The Marco Polo Club is divided into four tiers, Green (entry level), Silver, Gold, and Diamond, based on the member's past travel. A joining fee of US$100 is applicable for a Marco Polo Club membership. Members earn Club Points on eligible fare classes with Cathay Pacific, Cathay Dragon and Oneworld member airlines. These are used to calculate the member's eligibility for membership renewal, upgrade or downgrade during the membership year. Higher-tiered members are provided with increased travel benefits such as guaranteed Economy Class seat, additional baggage allowance, priority flight booking and airport lounge access. The Marco Polo Club membership is terminated after 12 months of inactivity or failure to meet minimum travel criteria as outlined in the membership guide and will be downgraded to Asia Miles member.[113][114]

Green

The Green tier is the entry level to the Marco Polo Club. Benefits include dedicated 24-hour club service line for flight reservations, designated Marco Polo check-in counters, excess baggage allowance and lounge access redemption, and priority boarding. One Business Class lounge voucher will be issued for the member or their travelling companion at reaching 200 Club Points. Members are required to earn 20 Club Points or pay US$100 for membership renewal.[115]

Silver

Silver tier level is achieved or retained when the member earns 300 Club Points during the membership year. Additional benefits for Silver Card members include advanced seat reservations, priority waitlisting, Business Class check-in counters, 10 kg (22 lb) extra baggage allowance, priority baggage handling, and Business Class lounge access when flying Cathay Pacific or Cathay Dragon operated flights. Additionally, members are eligible to use the Frequent Visitor e-Channels for seamless self-service immigration clearance at Hong Kong International Airport. At 450 Club Points, members will be issued two Business Class lounge vouchers for their travelling companions. Also, members are entitled to apply for at most three Membership Holidays in their lifetime, retaining their status for one year for each application.

Marco Polo Club Silver tier status is equivalent to Oneworld Ruby tier status, which entitles members to Oneworld Ruby benefits when travelling on a Oneworld member airline.[115][116]

The Wing, Cathay Pacific's flagship airline lounge, located at Chek Lap Kok International Airport.
Gold

Gold tier level is achieved or retained when the member earns 600 Club Points during the membership year. Additional benefits for Gold Card members includes a guaranteed Economy Class seat on Cathay Pacific or Cathay Dragon flights booked 72 hours before departure, 15 kg (33 lb) or one piece of extra baggage allowance, Business Class lounge access with one accompanying guest when flying Cathay Pacific, Cathay Dragon and Oneworld operated flights and arrival lounge access when flying Cathay Pacific or Cathay Dragon operated and marketed flights. Two Business Class lounge vouchers will be issued for their travelling companions or members on their Asia Miles Redemption List at reaching 800 Club Points. At reaching 1000 Club Points, four Cabin Upgrade vouchers (for Cathay Pacific or Cathay Dragon operated short-haul or medium-haul routes) will be issued to members and their travelling companions.

Marco Polo Club Gold tier status is equivalent to Oneworld Sapphire tier status, which entitles members to Oneworld Sapphire benefits when travelling on a Oneworld member airline.[115]

Diamond

The second-highest tier in the Marco Polo Club. Diamond tier level is achieved or retained when the member earns 1200 Club Points during the membership year. Additional benefits for Diamond Card members include top priority waitlisting, guaranteed Economy Class or Business Class seat on Cathay Pacific or Cathay Dragon flights booked 24 hours before departure, First Class check-in counters, 20 kg (44 lb) or one piece of extra baggage allowance, First Priority baggage handling, First Class lounge access with two guests when flying Cathay Pacific or Cathay Dragon operated flights, one guest when flying Oneworld operated flights and Business Class lounge access with two guests when flying on any airline. At 1400 Club Points, members will be issued with two First or Business lounge vouchers for their travelling companions or members on their Asia Miles Redemption List. At 1600 Club Points, four Cabin Upgrade vouchers (for any Cathay Pacific or Cathay Dragon operated routes) will be issued to members, travelling companions and members on their Asia Miles Redemption List. At 1800 Club Points, members can nominate one member for Marco Polo Gold tier membership.

Marco Polo Club Diamond tier status is equivalent to Oneworld Emerald tier status, which entitles members to Oneworld Emerald benefits when travelling on a Oneworld member airline.[115]

Diamond Plus

The highest tier in the Marco Polo Club. Diamond Plus tier level offered annually to the top one percent of Diamond members worldwide "in recognition of their exceptional and consistent travel performance and their contribution to Cathay Pacific and Cathay Dragon." Diamond Plus and Diamond members are "considered in the same tier in every aspect". However, Diamond Plus get extra perks consisting of "Nomination of one companion to the Diamond tier", and "access to Cathay Pacific First Class lounges regardless of which airline they are flying". Marco Polo Club Diamond Plus tier status is equivalent to Oneworld Emerald tier status, which entitles members to Oneworld Emerald benefits when travelling on an Oneworld member airline.[117]

Asia Miles[edit]

Asia Miles was named "Best Frequent Flyer Program" at the 2011 Business Traveller Asia-Pacific Travel Awards ceremony.[118] Members can earn Asia Miles with more than 500 partners in 9 categories: Airlines, Hotels, Finance & Insurance, Dining & Banquets, Retail, Travel & Leisure, Cars & Transport, Telecoms and Professional Services. Members can also earn miles when shopping online through iShop which offers a variety of products and brands – from books and electronics to clothing and accessories. Members can use the miles to redeem travel, electronic items, culinary delights, concert tickets, and other lifestyle awards. Miles are valid for 3 years from the date of accrual. Asia Miles membership is free and open to individuals aged two or above.[119] [120]

Services[edit]

Ground handling[edit]

Self-check-in kiosks
Self-check-in kiosks at Chek Lap Kok Airport.

Beginning in 2007, Cathay Pacific launched more methods to check in for flights. Among them were self-check-in using a kiosk at Hong Kong International Airport and other select destinations and checking in via a mobile phone. Cathay Pacific also launched a mobile application on App Store and Google Play, formerly named CX Mobile. Passengers can use the application to check flight arrivals and departures, check in for their flights and read about the destinations they are flying to using City Guides. The app has become a hit with passengers, making Cathay Pacific one of the industry leaders in offering mobile services to users of smartphones.[121][122]

Cathay Pacific is also now following a trend among many airlines to improve its brand image to customers and shareholders with social media, and is ranked fourth worldwide.[123] The airline now uses a range of social media tools including Facebook, Flickr, Twitter, Instagram, YouTube and blogging to share ideas with customers.[124] In addition, it has launched a virtual tour to enable passengers to experience Cathay Pacific's new cabins and services without having to step aboard the aircraft.[125]

On 4 January 2011, the cargo division of the airline, Cathay Pacific Cargo, became the first airline operating out of Hong Kong to fully switch to e-air waybill. This eliminates the need for all paper documents when issuing air waybills. The International Air Transport Association (IATA) selected nine countries and territories and airlines in which to run the e-AWB pilot program, including Hong Kong and Cathay Pacific.[126]

Cabin[edit]

First class[edit]

A First Class seat on board a Boeing 777-300ER.

First Class is available solely on board select Boeing 777-300ER aircraft, and features 6 seats in a 1-1-1 configuration. The first-class seats can be converted into fully lie-flat beds measuring 36 in × 81 in (91 cm × 206 cm). The seats include a massage function, a personal closet, an ottoman for stowage or guest seating, and adjustable 18.5 in (47 cm), HD personal televisions (PTV).[127][128][129]

Business class[edit]

A Business Class seat on board a Boeing 777-300ER.

Cathay Pacific introduced a new Business Class seat in 2011, featuring reverse herringbone seating in a 1-2-1 configuration. Each seat converts into a fully flat bed of length 82 inches (208 cm), with a width of up to 21 inches (53 cm). Each seat features a small enclosed side cabinet, and an adjustable 18.5 in (47 cm( personal television.[130] In 2016, upon delivery of brand new Airbus A350s, Cathay Pacific introduced a refreshed reverse herringbone seat designed by Porsche Design, with HD personal televisions and additional enclosed storage space on the side.[131]

The new Regional Business Class is provided on Cathay Pacific's regionally configured Boeing 777s (excluding the 777-300ER) and selected Airbus A330-300s. Regional Business Class seats have 21 in (53 cm) width and recline to 47 in (120 cm) of pitch and feature electrical recline and leg rest. A 12 in (30 cm) PTV is located in the seat back offers AVOD.[132][133][134]

New Premium Economy Class seats on the Airbus A350-900 XWB.

Premium Economy class[edit]

Cathay Pacific introduced a Premium Economy Class in March 2012.[135] The seat pitch is 38 inches – six inches more than Economy Class – and the seat itself is wider and have a bigger recline. It has a large meal table, cocktail table, footrest, a 10.6-inch personal television, an in-seat power outlet, a multi-port connector for personal devices, and extra personal stowage space. The Premium Economy Class seat offers a higher level of comfort with more living space in a separate cabin before the Economy Class zone.

In 2016, on delivery of the Airbus A350-900 fleet, Cathay Pacific introduced a new Premium Economy seat, which features a 12.1 in (31 cm) HD PTV, and improved pitch of 40 inches (102 cm). The new seats are configured in a 2-4-2 configuration, with a width of 18.5 in (47 cm).[136]

Economy class[edit]

The new Economy Class cabin on a Boeing 777-300ER.
New Economy Class seats
Old Economy Class seats with fixed shell design and StudioCX screens.

Cathay Pacific introduced a new economy class in March 2012. They have a six-inch recline (two inches over the current long-haul economy seat). These seats are 17.5 in (44 cm) in width and have 32 in (81 cm) of pitch.[137][138]

The old Economy Class seats, offered on aircraft outfitted with the refurbished long-haul interiors, were designed by B/E Aerospace and introduced in July 2008.[139] These seats include a fixed back design (shell) that allows passengers to recline without intruding on those seated behind, a 9 in (23 cm) PTV providing AVOD, AC power located behind a larger tray table, a coat hook and a literature pocket that has been relocated to below the seat cushion to create more legroom. The fixed shell of these seats has been criticised.[140] The previous Economy Class seats each feature 6 in (15 cm) PTVs with a choice of 25 channels. These seats are 17 in (43 cm) in width and have 32 in (81 cm) of pitch. These seats are being replaced with the New Economy Class seats on aircraft receiving the Cathay Pacific's new long-haul interior configuration.[141] Since 2017, all Boeing 777s are retrofitted from 9 abreast to 10 abreast, increasing the economy class seats on board the -300 from 350 to 396 seats & the -300ER from 182/ 268 seats to 201/296 seats. All new seats feature new 11.6-inch touch screens, USB ports, & improved seat pitch. The seat width is 17.2 in (44 cm)

In-flight entertainment[edit]

Studio CX, Cathay Pacific's in-flight entertainment system, equipped with personal televisions (PTVs) in every seat, offers movies, Asian and Western TV programs, music and games. Also, the airline provides a range of different newspapers and magazines from around the world, including the airline's in-flight magazine Discovery. Passengers with visual impairment can request for Hong Kong's South China Morning Post in Braille to be available on board.[142]

Studio CX provides Audio/Video on Demand (AVOD) for every passenger and offers up to 100 movies, 350 TV programs, about 1000 CD albums in 25 different genres, 25 radio channels and more than 70 interactive games.[143][144]

Catering[edit]

Cathay Pacific First Class fruit and cheese platter
A fruit and cheese course served in First Class.
A starter served in Cathay Pacific's Business Class.

Food and beverages are complimentary on all flights, with two hot meals generally served on each flight for long haul flights, along with free alcoholic beverages.[145] Foods served on flights from Hong Kong are provided by Cathay Pacific Catering Services (CPCS) facilities in Hong Kong.[146] CLS Catering Services Limited, a joint venture with LSG Sky Chefs, provides the inflight catering from Toronto and Vancouver airports;[147][148] while Vietnam Air Caterers, a joint venture between CPCS and Vietnam Airlines, provides the inflight catering for flights from Ho Chi Minh City.[149] For Manila-Hong Kong, they usually serve snacks in a snack bag, called a complimentary snack and drink. It contains a pastry or wrap in a box or a paper bag, an Anzac Cookie, an Antiseptic Towelette and a Nestea Lemon Tea for Taipei flights and a Sunkist Mango Juice or a Bottled Water for Manila flights. For flights to and from Taipei, a simplified lunch with hot rice is served, and the four varieties are served in rotation on flights.

Accidents and incidents[edit]

Cathay Pacific had nine incidents and accidents over its history, although none have resulted in a hull loss or loss of life since 1972.

  • On 16 July 1948, Miss Macao, a Cathay Pacific-subsidiary-operated Consolidated PBY-5A Catalina (VR-HDT) from Macau to Hong Kong was hijacked by four men, who killed the pilot after take-off. The aircraft crashed in the Pearl River Delta near Zhuhai. Twenty-six people died, leaving only one survivor, a hijacker. This was the first hijacking of a commercial airliner in the world.[150]
  • On 24 February 1949, a Cathay Pacific Douglas DC-3 (VR-HDG) from Manila to Hong Kong, crashed near Braemar Reservoir after a go-around in poor weather. All 23 people on board died.[151]
  • On 13 September 1949, a Cathay Pacific Douglas DC-3 (VR-HDW) departing from Anisakan, Burma, crashed on take-off when the right-hand main gear leg collapsed. There were no reported fatalities.[152]
  • On 23 July 1954, a Cathay Pacific Douglas DC-4 (VR-HEU) from Bangkok to Hong Kong was shot down by aircraft of the People's Liberation Army Air Force in the South China Sea near Hainan Island. Ten people died, leaving nine survivors. After the incident, Cathay Pacific received an apology and compensation from the People's Liberation Army Air Force. It was apparently mistaken for a Nationalist Chinese military aircraft.[153]
  • On 5 November 1967, Cathay Pacific Flight 33, operated by a Convair 880 (VR-HFX) from Hong Kong to Saigon, overran the runway at Kai Tak Airport. One person was killed and the aircraft was written off.[154]
  • On 15 June 1972, Cathay Pacific Flight 700Z, operated by a Convair 880 (VR-HFZ) from Bangkok to Hong Kong, disintegrated and crashed while the aircraft was flying at 29,000 feet (8,800 m) over Pleiku, Vietnam after a bomb exploded in a suitcase placed under a seat in the cabin, killing all 81 people on board.[155]
  • On 13 April 2010, Cathay Pacific Flight 780, an Airbus A330-342 (B-HLL) from Surabaya Juanda International Airport to Hong Kong landed safely after both engines failed due to contaminated fuel. 57 passengers were injured in the ensuing slide evacuation. Its two pilots received the Polaris Award from the International Federation of Air Line Pilots' Associations, for their heroism and airmanship.[156]
  • On 15 August 2018, a Cathay Pacific Boeing 777-300ER (B-KPY) damaged the edge of its right wing during pushback, by hitting a floodlight pole in Rome–Fiumicino Airport, causing severe damage. No injuries were reported.[157]

See also[edit]

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External links[edit]

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