Cathay Pacific 2009 Annual Report Download - page 22

Review of Operations PASSENGER SERVICES
We increased the Sapporo service to daily over the
summer period in response to growing interest in
north Japan as a leisure destination. We also provided
additional services at Christmas and Chinese New
Year and will increase to a daily service again in July
and August 2010.
Our business in Korea was generally poor during the
year, with outbound travel affected by the weak Won.
We removed one daily service from the Seoul route
and reduced Dragonair’s Busan services to four times
weekly in response to weak demand. However, there
were some signs of an improvement in demand,
especially inbound to Korea, towards the end of the
year and the service will return to five flights a day by
July 2010.
Demand on flights out of Taiwan was adversely
affected by the substantial increase in cross-Strait
flights to Mainland China which started to take effect
in August. However, inbound business was more
robust as a result of growing interest in Taiwan as a
leisure destination for Hong Kong travellers. H1N1
had a significant adverse effect on demand on the
Taiwan routes between May and July.
Business to and from Kaohsiung was better than
that to and from Taipei, reflecting less-intense
competition on the former route. However, yields
remained under pressure.
Southeast Asia and Middle East
All routes within the region were affected by
the economic downturn, while a number were
also affected by increasing competition from low
cost carriers.
As a result of the economic downturn we reduced
frequencies on the Bangkok, Kota Kinabalu and
Singapore routes.
The Singapore route suffered for much of the year
from a sharp reduction in premium traffic.
We put on a number of extra flights to and from
Indonesia as demand picked up during the Lebaran
festival in what was an otherwise a difficult year.
Demand into and out of the Philippines remained
reasonable throughout the year, although yields were
significantly down.
We added four flights a week to the daily service to
Denpasar in response to strong summer demand.
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We saw some growth to and from Thailand, albeit
from a low base. Leisure travel has picked up more
recently but the political uncertainty continues to
affect underlying demand.
The Dragonair service to Hanoi, launched in 2008,
performed satisfactorily.
Dragonair’s service to Kathmandu in Nepal was
combined with its service to Dhaka, Bangladesh, for
operational reasons and performed satisfactorily,
especially during the winter peak season.
Business to and from Colombo showed some
improvement with the cessation of the civil conflict
in Sri Lanka, albeit from a low base.
Our business to and from India began to improve in
the fourth quarter after a difficult year, reflecting an
improvement in premium revenues. The daily
Dragonair service to Bengaluru was reduced to four
times a week in line with reduced demand. Half of
the twice daily Delhi flights were routed via Bangkok.
Demand to and from the Middle East remained
relatively robust in 2009, although it weakened
towards the end of the year, especially on the Dubai
route. Riyadh became a daily service, and a new
four-times-a-week service to Jeddah via Dubai was
launched in October. The Jeddah service will become
daily in March 2010.
North America
We reduced capacity on the Los Angeles, San
Francisco, Toronto and Vancouver routes as part of
our effort to align capacity with reduced demand.
Load factors in the economy class cabins were high
on North American routes throughout the year as a
result, though yields were still reduced significantly
as a result of very aggressive competition. Premium
class demand on all North American routes was
heavily affected by the economic downturn.
Toronto was switched to an overnight operation in the
summer, with an early morning departure from the
city. Demand from premium passengers on this route
was weak for most of the year.
In response to a recent gradual upturn in demand, we
will increase services to Toronto by adding three more
flights per week from March 2010. We will also add
three flights per week to Los Angeles from May 2010,
making a total of 17 per week.
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