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Swot Analysis - Cathay Pacific

Essay by   •  December 1, 2016  •  Case Study  •  2,599 Words (11 Pages)  •  3,757 Views

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Description

Cathay Pacific is the airline company of Hong Kong, with the headquarters and main hub located at Hong Kong International Airport.

The Cathay Pacific was founded on 24 September 1946 by Australian Sydney H. de Kantzow and American Roy C. Farrell. Cathay Pacific currently becomes the world's third largest airline. Besides that, Cathay Pacific was awarded Skytrax's 2014 Airline of the Year as well as has won the "World's Best Airline" award for four times.

The vision of Cathay Pacific is to be the world’s best airline. Being the best means that the company always strive to excel in everything they do. The dynamic team provides the highest quality service so that the customers are happy that they chose Cathay Pacific. For the mission, they put the safety first, grow a winning team, provide outstanding products and services, consistently deliver Service Straight From The Heart, produce superior financial returns, support Hong Kong and become a socially and environmentally responsible company.

The Contribution of Cathay Pacific in Hong Kong aviation industry

Hong Kong International Airport is considered as one of the best and busiest airports in the world. Around 1,100 aircraft movements and over 100 airlines link HKIA with about 180 destinations worldwide every day. Among these airlines, Cathay Pacific has a large network of subsidiaries in Hong Kong aviation industry, it owns 147 aircraft in its fleet and offers scheduled passenger and cargo services to 203 destinations in 50 countries and territories. Also, the Cathay Pacific Group reported an attributable profit of HK$3150 million in 2014, which contributes a lot in the aviation industry.

Competition among the airline in the world

Although Cathay Pacific is one of the best airline in the world, the competitors still exist. The top direct competitors for Cathay Pacific are Singapore Airlines Limited, China Eastern Airlines Corporation Limited and China Southern Airlines Co., Ltd. The China Southern Airlines Co. Ltd has 82,132 employees while Cathay Pacific only has 32,900 employees. For the revenue, among these three competitors, the Cathay Pacific ranks the second last with 13.67 billion. However, Cathay Pacific has won the best airline from Skytrax, and it was voted by the real passengers, according to their comfort, entertainment, service and the catering as well as cleanliness. Finally, the company awarded a World 5-Star Airline.

Strength of Cathay Pacific

Cathay Pacific is one of the best airline in the world, and it contributes a lot for strengthening the position of Hong Kong as an aviation hub. Also, there is a Cathay City near the Hong Kong International Airport. Cathay City is a place for training the pilots and the flight attendants. There is a place for simulator cockpit and it is directly copied from the real cockpit so that they can get used to it and well-prepared. Besides that, Cathay Pacific is a member of the one world global alliance with Airberlin, American Airlines, British Airways, Finnair and so on. These airline serves more than 570 destinations.

Weakness of Cathay Pacific

During the financial crisis, Cathay Pacific suffered a lot as they unable to predict the fuel market price. Also, they rely too much on international onward moving traffic, Cathay Pacific and Dragonair carried 147,307 tonnes of cargo and mail in September 2014, an increase of 14.5% compared to September 2013. The cargo and mail load factor rose by 2.9 percentage points to 62.2%. Besides that, Cathay Pacific has a poor management. Recently, the Cathay Pacific’s flight attendants went on a strike at the Hong Kong International Airport and Cathay City. They dissatisfied with the company that cutting to some cabin crew allowances and the benefits. This protest was reported internationally.

Opportunities of Cathay Pacific

Cathay Pacific gains the customers around the world from providing more popular destinations, which can enhance its brand globally. Also, the company emerges technologies , like providing online-booking, it is more convenience to the customers, especially for the people who have no time to go to airlines branches for booking. Besides that, Cathay Pacific created an app in Android and iPhone version for passengers to check-in and see the flight status, so that people can get the information everywhere. In addition, there is a flagship community program in Hong Kong, which is called “I Can Fly”. Young people from under-privileged backgrounds can take part to this program, and they can have an opportunity to learn about aviation and careers in the aviation industry.

Threats of Cathay Pacific

There was an economic downturn in 2009, which severely affects the revenue of Cathay Pacific, likes the first and business class bookings, which have fallen by around 20% at that time. Furthermore, the fuel price always increase so the air tickets’ price increase as well, passengers would rather save the travel expenses and the company may receive loss. Besides that, Cathay Pacific used to experience the incidents, like crash, hijack etc, which have directly influenced the sales and reputation of the company.

Planning tools and techniques used by Cathay Pacific

Cathay Pacific uses the scenario planning to identify the problems that may occur in the future. In 2011, Cathay Pacific identified that the climate change, pandemics, resource scarcity and impacts could severely affect their business and supply chain. They tried to identify different scenarios in order to find some solutions to deal with the weather-related disruptions. Also, they worked and researched with the Climate Change Business Forum so as to get a better preparation to adapt to the climate change and minimise the effects to the company. Also, the company adopts the forecasting, the team predicts that there will be an increase fuel price in the future and they are now actively finding the alternative to replace the original fuel by biofuel, so that they will not be affected by the high price.

Uniform Policy and Work-to-Rule Procedure of Cathay Pacific

Cathay Pacific has a strict policy on flight attendants’

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