Cathay Pacific 2008 Annual Report Download - page 39

Download and view the complete annual report

Please find page 39 of the 2008 Cathay Pacific annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 104

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104

Cathay Pacific Airways Limited Annual Report 2008 37
Directors’ Report
Agreement could be extended by further
agreements for members of the Lufthansa group to
provide aircraft line maintenance, aircraft base
maintenance services and/or other related services
to the Group.
LHT is a subsidiary of Lufthansa which is a
substantial shareholder in the Company’s former
subsidiary CLS. LHT was therefore a connected
person of the Company under the Listing Rules.
The transactions under the LHT Aircraft
Maintenance Agreement and further agreements
were continuing connected transactions until 21st
July 2008 in respect of which announcements
dated 26th February 2007 and 22nd July 2008 were
published.
The fees payable by the Group to the Lufthansa
group under the LHT Aircraft Maintenance
Agreement and further agreements totalled HK$65
million for the period from 1st January to 21st July
2008.
(e) Pursuant to an agreement dated 29th March 2007
(“LHT Engine Maintenance Agreement”) with LHT,
LHT provides aircraft engine maintenance services
to the Group. Payment is made in cash by the
Group to LHT within 30 days upon receipt of the
invoice. The term of the LHT Engine Maintenance
Agreement is for 10 years ending on 31st
December 2016.
LHT is a subsidiary of Lufthansa which is a
substantial shareholder in the Company’s former
subsidiary CLS. LHT was therefore a connected
person of the Company under the Listing Rules.
The transactions under the LHT Engine
Maintenance Agreement were continuing
connected transactions until 21st July 2008 in
respect of which announcements dated 29th March
2007 and 22nd July 2008 were published.
The fees payable by the Group to LHT under the
LHT Engine Maintenance Agreement totalled
HK$117 million for the period from 1st January to
21st July 2008.
(f) Pursuant to a framework agreement dated 21st
May 2007 (“HAECO Framework Agreement”) with
HAECO, HAECO and its subsidiaries (“HAECO
group”) provide services to the Group’s aircraft
fleets. The services include line maintenance, base
maintenance, comprehensive stores and logistics
support, component and avionics overhaul, material
supply, engineering services and ancillary services
at Hong Kong International Airport, Xiamen or other
airports. Payment is made in cash by the Group to
HAECO group within 30 days upon receipt of the
invoice. The term of the HAECO Framework
Agreement is for 10 years ending on 31st
December 2016.
HAECO is a connected person of the Company by
virtue of it being an associate of the Company’s
substantial shareholder Swire Pacific. The
transactions under the HAECO Framework
Agreement are continuing connected transactions
in respect of which an announcement dated 21st
May 2007 was published and a circular dated 31st
May 2007 was sent to shareholders.
The fees payable by the Group to HAECO group
under the HAECO Framework Agreement
totalled HK$2,069 million for the year ended
31st December 2008.
(g) Pursuant to an agreement dated 13th June 2008
(“Catering Agreement”) between Hong Kong
Dragon Airlines Limited (“Dragonair”) and LSG
Lufthansa Service Hong Kong Limited (“LSGHK”),
LSGHK provides in-flight catering services to
Dragonair. Payment is made in cash by Dragonair to
LSGHK within 30 days upon receipt of the invoice.
The term of the Catering Agreement is for 2 years
ending on 31st December 2009.
Dragonair is a wholly owned subsidiary of the
Company. As LSGHK is an associate of Lufthansa
which is a substantial shareholder in the Company’s
former subsidiary CLS, LSGHK was a connected
person of the Company. The transactions under the
Catering Agreement were continuing connected
transactions until 21st July 2008 in respect of
which announcements dated 13th June 2008 and
22nd July 2008 were published.
The fees payable by Dragonair to LSGHK under the
Catering Agreement totalled HK$121 million for the
period from 1st January to 21st July 2008.
(h) The Company entered into a framework agreement
dated 26th June 2008 (“Air China Framework
Agreement”) with Air China Limited (“Air China”) in
respect of transactions between the Group on the