Cathay Pacific 2015 Annual Report Download - page 22

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Cathay Pacific Airways Limited
20
• There was strong demand for shipments of electronic
parts and perishable goods from Vietnam.
• There was strong demand for shipments of cargo to
India, particularly for infrastructure projects. We
introduced a freighter service to Kolkata in March 2015
and increased the frequency of the Delhi service from
seven to eight flights per week in March 2015. There was
strong growth in demand for shipments of cargo from
Bangladesh.
• Demand for shipments of cargo (milk powder to Mainland
China, fresh products to Asia generally and chilled meat
to the Middle East) from the Southwest Pacific traffic was
strong. Demand for shipments to the Southwest Pacific
was stable.
• Overcapacity on routes to Europe put heavy downward
pressure on yield. We concentrated on shipping
pharmaceutical and special products from Europe. The
number of our freighter flights to Europe was between
seven and nine a week, depending on demand.
• We added two cargo freighter services per week to
North America in April 2015. We changed routings so as
to increase cargo capacity on the Chicago, Los Angeles
and New York routes. We also increased the frequency of
the Columbus service from three to four flights a week
from October 2015.
• 2015 was the second full year of operations for the
Cathay Pacific cargo terminal at Hong Kong International
Airport. The terminal handled 1.7 million tonnes of cargo
in 2015, an increase of 13% compared to 2014. It serves
12 airlines, including Cathay Pacific, Dragonair and Air
Hong Kong.
• In 2015, we introduced a mail scanning and tracking
system.
• In 2013, we agreed to sell six Boeing 747-400F freighters
to The Boeing Company. Two of these freighters have
been delivered, one in November 2014, the other in July
2015. The remaining four freighters will leave the fleet by
the end of 2016. We will take delivery of our 14th and final
Boeing 747-8F freighter later in 2016.
• Our cargo business has many challenges. We have
confidence in its long-term prospects and in Hong
Kong’s future as an international air cargo centre.
Loyalty and reward programmes
The Marco Polo Club
• The Marco Polo Club is the loyalty programme of Cathay
Pacific and Dragonair, created to reward their valuable
customers with benefits and services that enhance and
elevate their travel experience. It has more than one
million members.
• Members of the Marco Polo Club contribute to almost a
quarter of the revenues of Cathay Pacific and Dragonair
and fly on one-sixth of their flights.
• From 15th April 2016, Marco Polo Club will be moving to a
new points-based system. Members will earn club points
based on a combination of cabin class, fare class, and the
distance travelled. This direction will better align with the
industry direction to be able to better recognise the
contribution of our passengers.
• All popular member benefits, including unlimited lounge
access for Silver members and above, as well as priority
boarding and check-in remain unchanged, but at the same
time Marco Polo Club will introduce more flexible and
family-friendly benefits.
Asia Miles
• Asia Miles is a leading travel and lifestyle rewards
programme in Asia. It has more than eight million members
and over 600 partners worldwide, including more than 25
airlines and 400 restaurants, plus hotels and shops.
• There was a 10% increase in redemptions by Asia Miles
members on Cathay Pacific and Dragonair flights in 2015.
• Marco Polo Club members are also members of
Asia Miles.
Antitrust proceedings
Cathay Pacific remains the subject of antitrust proceedings
in various jurisdictions. The outcomes are subject to
uncertainties. Cathay Pacific is not in a position to assess the
full potential liabilities but makes provisions based on
relevant facts and circumstances in line with accounting
policy 20 set out on page 105.
In December 2015, the General Court annulled the European
Commission’s finding against the Company in November
2010. The fine of Euros 57.12 million previously imposed on
the Company had been refunded to the Company in early
February 2016. The refund had been duly recognised in 2015
profit. More details on antitrust proceedings are disclosed in
note 28(e) to the financial statements.
Review of Operations Cargo Services Loyalty and Reward Programmes