Cathay Pacific 2007 Annual Report Download - page 15

Review of Operations
Passenger Services
Comments by region are as follows:
South West Pacific and South Africa
• We increased capacity to Australia with Sydney
getting its fourth daily flight and a third daily
Melbourne flight added from October. Services to
Adelaide and Perth were also enhanced.
• Traffic to and from Australia remained strong
throughout the year, driven by heavy Mainland China
traffic. Strong business class demand helped to
raise yield.
• The Auckland service became a twice-daily flight for
the peak season with effect from December. Demand
was robust on the route throughout the year.
• Corporate demand helped to increase yield on the
South African route, with traffic from Mainland
China helping to keep passenger numbers high.
North Asia
• We added a sixth daily flight to Tokyo in late
October. Yields on our Japanese routes were,
however, affected by the weakness of the Yen and
lower demand for outbound travel.
• Strong competition affected both demand and yield
on our flights between Japan and Taipei.
• Our performance in the Korean market remained
satisfactory though there was a fall in outbound
demand in the latter months.
• Busan in South Korea was added as a destination
through a codeshare with Dragonair. This service
was launched in January.
• Traffic to and from Taiwan was generally healthy
though the emergence of competing hubs for
Mainland China-Taiwan traffic, particularly Jeju in
South Korea, began to have some impact.
• We added four new destinations in Mainland China –
Changsha, Fuzhou, Qingdao and Wuhan – in December
through a codeshare agreement with Dragonair.
• Traffic to our two main ports in the Mainland, Beijing and
Shanghai, was generally robust although the Shanghai
market was affected by strong competition and price-
cutting, particularly in the second half of the year.
South East Asia and Middle East
• Business in this region was strong throughout most
of the year, though Thailand lost favour as a holiday
destination.
• There was good growth in business class travel
regionally and this helped to boost yield.
• Four extra flights a week were mounted to Cebu in
the summer and extra capacity was added on key
destinations during holiday peaks.
• Flights to Colombo were suspended – in March
and again in late April – following growing security
concerns. Flights will resume by end of March
this year.
• Load factors to India and Middle Eastern
destinations were high throughout 2007 and yield
increased.
• Business to and from India increased as a result of a
temporary “open skies” arrangement for the winter
peak. The recently announced service enhancements
to and from India will enable Cathay Pacific to better
serve the fast-growing Indian market.
Europe
• Business class demand remained high on the key
London route, helping to push up yield. However,
increased competition had an impact on economy
class load factor and yield.
• Load factors on other European services were high
for most of the year. The strong Euro helped to
maintain yield.
• Three additional flights a week were added to Paris
from the summer.
North America
• The North American market made an increasingly
important contribution to our overall business in 2007.
• Demand remained high on all routes throughout the
year with heavy corporate traffic driving up yield.
• Significant increases to our capacity on the North
American routes were made during the course of
the year. Overall capacity rose by 5.9%.
• San Francisco became double-daily from October
while New York went to three flights a day – two
non-stop – following the arrival of our third Boeing
777-300ER aircraft in November.
• We added three flights a week to Vancouver in
summer and it will become a triple-daily service
from March 2008.
• In December three of our Toronto flights became
non-stop services and a daily non-stop service
commenced from 1st January 2008.
Cathay Pacific Airways Limited Annual Report 2007 13