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Cathay Pacific Airways Limited Annual Report 2008 17
Review of Operations PASSENGER SERVICES
Dragonair
• Traffic to and from Mainland China was affected
by a number of factors in 2008, including the
January snowstorms, the Sichuan earthquake in
May and the Olympic Games in August.
• Demand on the key trunk routes to Beijing and
Shanghai held up well, despite the impact from
cross-straits charter flights. Beijing in particular
saw a boost in business following the Olympics
and the relaxation of visa restrictions.
• Dragonair took over Cathay Pacific’s daily service
to Xiamen, with the two airlines codesharing on
the route.
• Business to secondary cities in Mainland China
was below expectations for most of the year.
Passenger numbers declined to Chengdu and
Wuhan following the earthquake but we kept
services to both cities intact.
• We added capacity to a number of Mainland
China destinations in the summer and now fly
daily to all but four of the cities we serve in
the country.
• We terminated the twice-weekly tag between
Haikou and Sanya in July for cost efficiency and
also to boost Sanya as a destination by providing
daily non-stop flights.
• We ceased our scheduled service to Sendai in
Japan from the summer, turning it into a charter
flight to match demand on the route.
• The daily flight to Busan in Korea performed well.
North America
Cathay Pacific
• The profitability of many flights to North America
was seriously affected by high fuel prices in the
first half of the year.
• The impact of high fuel prices led us to redeploy
capacity to other routes with more revenue
earning potential. As a result we trimmed back
services on a number of North American routes.
Los Angeles and Vancouver both moved from three
to two flights a day while Toronto went from 10 to
seven flights a week.
• Demand on all US routes was high during the first
half though we saw a big falloff in front-end
business following the financial crisis. New York
premium traffic was hit particularly hard, especially
in First Class.
• Loads in the back end held up better than expected
after the financial crash.
• We saw very real benefits from being able to
employ our new Boeing 777-300ERs to North
America in terms of both operational efficiency and
product quality. Feedback from passengers has
been highly favourable.