Cathay Pacific 2010 Annual Report Download - page 23

Cathay Pacific Airways Limited Annual Report 2010
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The authorities in Mainland China have given formal
approval for our cargo joint venture with Air China, and
the two airlines are now in the process of completing
the necessary paperwork to enable operations to
commence. An existing Air China subsidiary, Air China
Cargo, will be used as the platform for the joint
venture. Air China Cargo is based in Shanghai and is in
a good position to exploit the attractive air cargo
opportunities in the Yangtze River Delta region. We are
selling four Boeing 747-400BCF freighters and two
spare engines to the joint venture. One of these
aircraft has already been sold to Air China Cargo. The
other three are expected to be sold in 2011 and 2012.
One Boeing Converted Freighter is currently being
wet-leased to Air Hong Kong.
Deliveries of our fleet of new Boeing 747-8F freighters
have been delayed and are now scheduled to
commence in August 2011, with six expecting to enter
service before the end of 2011. We are managing our
capacity accordingly in the first half of 2011 and look
forward to having the new aircraft in service in time for
the 2011 air cargo peak.
Cathay Pacific is an active participant in IATA’s drive to
simplify the airfreight business. Cathay Pacific is
pioneering the move to e-AWB in Hong Kong. e-AWB
was implemented on a 100% basis in Hong Kong on
1st January 2011 and will be implemented in outports
during the next two years.
We recommenced work on our HK$5.5 billion cargo
terminal at Hong Kong International Airport. The state-
of-the-art facility, which will begin operations in early
2013, will provide more choice and competition in
Hong Kong’s airfreight industry. The construction of
the terminal and preparation for operations are
progressing well.
The building of our new terminal and the expansion of
our freighter fleet in 2011 highlight our commitment to
maintaining Hong Kong’s position as the world’s
leading international air cargo hub.
Dragonair sells space for cargo in the bellies of its
aircraft on all its routes. Its cargo tonnage increased
significantly in 2010, particularly on its Mainland
China routes.
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Asia Miles
Asia Miles, our travel rewards programme, continued
to grow. At the end of 2010 it had more than three
million members. The number of members based in
Mainland China grew by 33% in 2010.
The number of Asia Miles partners increased to more
than 400 in nine categories, including airlines, hotels
and major financial institutions.
Redemptions of flights by Asia Miles members on our
20 partner airlines decreased by 1% in 2010. Almost
90% of Cathay Pacific flights carried passengers
redeeming frequent flyer miles.
Asia Miles offers over 800 non-flight redemption
products to members. There was a 7% increase on
non-flight redemptions in 2010.
In November 2010, American Express and Cathay
Pacific introduced a co-branded corporate card. The
new card offers rewards and savings to medium sized
and large companies in Hong Kong.
The Asia Miles Mobile Sites and iPhone apps were
introduced in 2010. Members can use mobile devices
to manage their accounts in English and in traditional
and simplified Chinese.
Antitrust investigations
Cathay Pacific remains the subject of antitrust
investigations and proceedings by competition authorities
in various jurisdictions and continues to cooperate with
these authorities and, where applicable, defend itself
vigorously. These investigations are ongoing and the
outcomes are subject to uncertainties. Cathay Pacific is
not in a position to assess the full potential liabilities but
makes provisions based on facts and circumstances in
line with accounting policy 19 set out on page 51.
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Review of Operations CARGO SERVICES ASIA MILES