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Cathay Pacific Airways Limited
82 Notes to the Financial Statements Related Party Transactions
29. Related party transactions
(a) Material transactions between the Group and associates and other related parties which were carried out in the
normal course of business on commercial terms are summarised below:
2014 2013
Associates
HK$M
Other related
parties
HK$M
Associates
HK$M
Other related
parties
HK$M
Turnover 226 11 226 12
Aircraft maintenance costs 948 2,207 827 2,355
Operating costs 514 – 463 –
Dividend income 221 8 273 –
Fixed assets purchase – 13 – 7
Sales of fixed assets – – 206 –
Other related parties are companies under control of a company which has a significant influence on the Group.
(i) Under the HAECO Framework Agreement with HAECO and HXITM, the Group paid fees to, and received fees
from, the HAECO group in respect of aircraft maintenance and related services. The amounts payable to the
HAECO group for the year ended 31st December 2014 totalled HK$3,167 million (2013: HK$3,189 million). The
amounts receivable from the HAECO group for the year ended 31st December 2014 totalled HK$13 million
(2013: HK$15 million).
Transactions under the HAECO Framework Agreement are continuing connected transactions, in respect of
which the Company has complied with the disclosure and shareholders’ approval requirements in accordance
with Chapter 14A of the Listing Rules. For a definition of terms, please refer to the Directors’ Report on pages 35
and 36.
(ii) Under the Air China Framework Agreement with Air China dated 26th June 2008, the Group paid fees to, and
received fees from, the Air China group in respect of transactions between the Group on the one hand and the
Air China group on the other hand arising from joint venture arrangements for the operation of passenger air
transportation, code sharing arrangements, interline arrangements, aircraft leasing, frequent flyer
programmes, the provision of airline catering, ground support and engineering services and other services
agreed to be provided and other transactions agreed to be undertaken under the Air China Framework
Agreement. The amounts payable to the Air China group for the year ended 31st December 2014 totalled
HK$430 million (2013: HK$350 million). The amounts receivable from the Air China group for the year ended
31st December 2014 totalled HK$224 million (2013: HK$222 million).
Transactions under the Air China Framework Agreement are continuing connected transactions, in respect of
which the Company has complied with the disclosure requirements in accordance with Chapter 14A of the
Listing Rules. For a definition of terms, please refer to the Directors’ Report on page 36.
(b) The Company has an agreement for services with JSSHK (“JSSHK Services Agreement”). Under the JSSHK
Services Agreement, the Company paid fees and reimbursed costs to JSSHK in exchange for services provided.
Service fees calculated at 2.5% of the Group’s profit before taxation, results of associates, non-controlling
interests, and any profits or losses on disposal of fixed assets are paid annually. For the year ended 31st December
2014, service fees of HK$81 million (2013: HK$69 million) were paid and expenses of HK$214 million (2013: HK$155
million) were reimbursed at cost; in addition, HK$50 million (2013: HK$54 million) in respect of shared administrative
services were reimbursed.
Transactions under the JSSHK Services Agreement are continuing connected transactions, in respect of which the
Company has complied with the disclosure requirements in accordance with Chapter 14A of the Listing Rules. For a
definition of terms, please refer to the Directors’ Report on page 35.
(c) Amounts due from and due to associates and other related companies at 31st December 2014 are disclosed in
notes 19 and 22 to the financial statements. These balances arising in the normal course of business are non-
interest bearing and have no fixed repayment terms.
(d) Guarantees given by the Company in respect of bank loan facilities of an associate at 31st December 2014 are
disclosed in note 30(b) to the financial statements.
(e) There were no material transactions with Directors and executive officers except for those relating to shareholdings
(as disclosed in the Directors’ Report and the Corporate Governance Report). Remuneration of Directors and
executive officers is disclosed in note 27 to the financial statements.