Cathay Pacific 1999 Annual Report Download - page 10

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Review of Operations
14 CATHAY PACIFIC AIRWAYS LIMITED ANNUAL REPORT 1999
Highlights by major routes are as follows:
Europe
•Depreciation of European currencies adversely affected revenue.
•Front-end business reduced while economy class travel was boosted by “sixth-freedom” traffic to destinations
such as Australia and Denpasar.
•The earthquake in Turkey had a negative impact on our Istanbul service.
Pacific and South Africa
•North American routes performed well in 1999 and attained growth in traffic transiting to South East Asian
destinations.
•The San Francisco route has performed well since its launch in December 1998, with load factors and
revenue continuing to improve throughout the year.
•Australia faced severe price competition and as a result flights to Sydney were reduced. A double daily service
has now been reinstated.
•South Africa saw a turnaround after relatively poor results in 1998. The codeshare arrangement with
South African Airways, which commenced in July, further improved revenue on this route.
North Asia
•Appreciation of the Japanese yen helped outbound traffic on the Japanese routes.
•Korean services were very strong due to rising demand both from the Hong Kong market and from Korea.
•Intense competition continued in the Taiwan market, adversely affecting yields.
South East Asia and Middle East
•The economies in the region gradually started to recover from the Asian economic downturn. Business to
and from South East Asia has been improving, and strengthening currencies have helped, but intense
competition has still put pressure on our yields.
•India and the Middle East routes performed satisfactorily. Additional frequencies to India are being sought.
Cargo Services
Cargo and mail
ATK (million) Load Factor (%) Yield
1999 1998 Change 1999 1998 Change Change
Cathay Pacific 5,337 5,119 +4.3% 71.5 65.2 +6.3%pt +11.8%
AHK Air Hong Kong 1,188 1,114 +6.6% 67.6 74.9 -7.3%pt +12.3%
Cathay Pacific Airways Limited (“CPA”)
•Cathay Pacific Cargo operates a fleet of two B747-400 freighters and four B747-200 freighters and serves
16 destinations. A further two B747-400 freighters are on order.
•Worldwide cargo markets were stronger than expected in 1999, leading to a strong performance for
Cathay Pacific Cargo. Turnover increased by 23.2% over 1998.