Cathay Pacific 2006 Annual Report Download - page 6

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CATHAY PACIFIC
Shareholding realignment
• On 28th September 2006, Dragonair became our
wholly owned subsidiary following the completion
of a shareholding realignment involving Air China,
Cathay Pacific, China National Aviation Company
Limited (“CNAC”), CITIC Pacific Limited (“CITIC
Pacific”) and Swire Pacific Limited (“Swire Pacific”).
• The integration with Dragonair will bring about cost
and revenue synergies and new opportunities that
will benefit passengers and enhance Hong Kong’s
position as a leading international aviation hub.
• Developments since the integration began
include the announcement of two new Dragonair
destinations, Phuket and Busan, a reduction in
the minimum connecting time for passengers
travelling between the two airlines and a codeshare
to seven destinations.
• Following the restructuring, Air China has become a
strategic partner of Cathay Pacific. The partnership
will result in a closer cooperation in a number of
areas, with a number of joint initiatives expected
to be announced in 2007. Closer cooperation with
Air China will bring significant benefits for both the
Beijing and Hong Kong hubs.
Award winning products and services
• In September we gave a preview of our new long
haul inflight product that will feature a complete
overhaul in all three classes of travel. The product,
which features new seats, inflight entertainment
and cabin design, will be rolled out progressively on
every aircraft in our long haul fleet from early 2007
and will be completed by mid-2009.
• We opened new lounges in Bangkok following
the opening of Suvarnabhumi Airport. Work also
commenced on our new facilities at Tokyo’s Narita
Airport, where we moved terminals in January 2007.
A major shareholding realignment in 2006 saw Dragonair become a wholly owned
subsidiary of the Company. As part of the same agreement Air China purchased a
17.5% interest in Cathay Pacific and Cathay Pacific increased its interest in Air China
from 10% to 17.3%. Cathay Pacific together with Dragonair now offer significant
connectivity to Mainland China with 417 flights each week to 21 destinations.
Record volumes and revenue were achieved for both our passenger and cargo operations
in 2006 although the persistently high fuel price continued to erode earnings. During
the year Cathay Pacific increased frequency to a number of passenger destinations and
opened four new cargo destinations. The Company also announced its largest order to
date for new freighters.
Cathay Pacific Airways Limited Annual Report 2006
4
2006 in Review