Cathay Pacific 2013 Annual Report Download - page 6

Cathay Pacific Airways Limited Interim Report 20134
Chairman’s Letter
to purchase three Boeing 747-8F freighters, for
delivery in the second half of 2013, cancelled
orders for eight Boeing 777-200F freighters,
acquired options to purchase five Boeing 777-
200F freighters and agreed to sell four Boeing
747-400BCF converted freighters. Three of the
converted freighters have already left our fleet. As
part of the same package of transactions, Air China
Cargo agreed to purchase eight Boeing 777-200F
freighters and to sell seven Boeing 747-400BCF
converted freighters. This will greatly improve the
efficiency of Air China Cargo’sfleet.
All of the long-haul passenger frequencies that
were cancelled as part of 2012’s cost reductions are
restored by September 2013. We restored flights
to Los Angeles and Toronto and will restore flights
to New York from September. We introduced a
fifth daily frequency to London in June and will,
subject to government approval, introduce a new
four-times-weekly service to Male in the Maldives
in October and a new daily service to Newark in the
U.S.A. in March 2014. We continued to strengthen
Dragonair’s regional network, adding services to
Da Nang, Wenzhou, Yangon and Zhengzhou and
will, subject to government approval, introduce a
new three-times-weekly seasonal service to Siem
Reap in Cambodia in October. We suspended cargo
services to Brussels and Stockholm in February, due
to continued weak demand for cargo shipments to
and from Europe. We intend to add Guadalajara to
the cargo network in the last quarter of 2013, with a
view to offering cargo services between Mexico and
Hong Kong and the rest ofAsia.
Our new premium economy class, introduced in
2012, is growing in popularity with passengers and
has helped to improve our economy class yield.
By 30th June 2013, premium economy class was
available on 68 of our long-haul aircraft. By the
end of the year, it will be available on 85 aircraft.
In January 2013 we began to introduce our new
regional business class seat. The new seats had
been installed in four of our aircraft by 30th June
2013. Installation in the regional fleet will be
completed by December 2014. Our new business
and economy class seats have been installed in 32
Boeing 777-300ER and 24 Airbus A330-300 long-
haul aircraft. We started to improve our first class
seats on the Boeing 777-300ER aircraft in July.
Dragonair is installing new business and economy
class seats and a new inflight entertainment
system in its aircraft. By 30th June 2013, the new
products had been installed on eight Dragonair
aircraft. They will have been installed on 20
Dragonair aircraft by March 2014. At Hong Kong
International Airport we reopened our renovated
first class lounge at The Wing in February. Our
fifth departure lounge at Hong Kong International
Airport, The Bridge, will open later in 2013.
We continue to strengthen our strategic
partnership with Air China. A new ground-
handling company, Shanghai International
Airport Services Co., Limited, began operations in
February 2013. This joint venture between Cathay
Pacific, Air China, the Shanghai Airport Authority
and Shanghai International Airport Co. Ltd.
provides ground-handling services at Shanghai’s
two international airports, Hongqiao and
Pudong. We are working to improve the financial
performance of Air China Cargo, our cargo joint
venture with Air China.
While we continued to operate in a difficult
environment in the first six months of 2013, it
was pleasing to see some improvement in our
business. This improvement mainly reflected
stronger passenger business and cost reductions.
Our financial position remains strong. We will
continue to invest to make our business stronger.
We will remain focused on our long-term goals
while managing short-term challenges. The
business outlook for the rest of 2013 remains
unclear, but our core strengths – a superb team,
a strong international network, exceptional
standards of customer service, a strong
relationship with Air China and our position in
Hong Kong – remain firmly in place.
Christopher Pratt
Chairman
Hong Kong, 14th August 2013