Cathay Pacific Company Report Sample Essay

The undermentioned study. comprising of secondary research found from legion different beginnings will turn to the organizational profile of the Hong Kong based air hose. Cathay Pacific. An organizational profile will be constructed detailing assorted facets of the concern including Cathay Pacific’s organizational construction. merchandises and services.

markets. competition. fiscal information and the external influences they encounter. An rating of each of these subjects will besides be made in order to see where the company is thriving and where it is confronting damaging effects. A short comparing of Cathay Pacific against the UK company. British Airways.

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will besides be made to turn to briefly the similarities and differences between these two companies.1. 0 IntroductionCathay Pacific is an international air hose. and the flag bearer air hose for Hong Kong. It offers rider and lading services every bit good as multiple other air hose and transit services.

The air hose strives to be advanced and supply an first-class criterion of service taking it to win assorted awards and being named one of the world’s taking air hoses. Cathay Pacific was founded in September 1946 by two western work forces. Roy C. Farrell and Sydney H. de Kantzow. an Australian and an American whom both put up the amount of one Hong Kong Dollar in order to register the concern. the air hose is now a member of the Swire Group of Hong Kong ( Cathay Pacific Website.

2012 ) and has subordinate air hoses that contribute to it’s success.This advanced air hose has developed over clip with the fleet turning quickly after the company was founded pluming itself in holding the newest aircrafts in order to guarantee client comfort-ability. and safety of riders and lading. Then in 1948. John Swire and Sons acquired a direction interest in the air hose that has helped the company to develop itself even further over the old ages. By 1959.

Cathay Pacific had flight-rights to Japan. Taiwan. Australia. every bit good as legion other finishs around South East Asia and by the late 1970’s and early 1980’s the air hose was doing long-haul flights to finishs including Vancouver. Canada and London. England. Cathay Pacific has been an air hose that is considered a really modern one with the most up to day of the month equipment and services that undergo changeless advanced enlargement in order to maintain it one of the best air hoses in the universe and maintaining Hong Kong a planetary air power hub with respect to concern. touristry and lading traffic ( Scribd.

2012 ) .2. 0 Organisational Profile2. 1 Organizational StructureThe organizational construction of a company is frequently in correspondence to being the most efficient construction to accomplish the company’s missions and ends. For Cathay Pacific the company’s vision is to go the most admired air hose in the universe holding the slogan ‘Service Straight from the Heart’ . and because of this the companies construction is really regime. and emphasises the demand for first-class service to all clients. The company’s ends outline that safety should be the maximal precedence when it comes to supplying service for its clients.

and it is for this ground that company construction dedicates a section to the technology and care of aircraft. Cathay Pacific strives for merchandise leading. which is why it has dedicated clip and investing to its e-business standards leting the company to be advanced and push frontward with new engineering in the air hose concern.

Delivering superior fiscal returns is portion of its ends. and therefore reflected in its organizational construction. as the company relies much upon engineering in order to maintain costs down.

which so in bend do non hold to be transferred on to the client. and later besides. the stockholders of the company are allowed a greater return upon their investings in the signifier of dividends ( Scribd. 2012 ) The organizational construction of Cathay Pacific is divided into different grades of hierarchy and countries of concentration within them. This study will concentrate on the Hong Kong division of Cathay Pacific. as this is where the company is based. The sections that are attributed to Cathay Pacific are as follows ; fining section.

finance and accounting. rider services ( these include cabin crew direction and preparation. inflight rider services. and providing ) . tour operation. subordinate air hoses ( including Dragonair and Air Hong Kong ) . selling.

technology. and human resources ( Cathay Pacific. 2010 ) . Cathay Pacific.

as of the most recent statistics employee about 30. 000 employees including those employed within its subordinates ( Cathay Pacific. 2012 ) .These sections are evidently maintained and managed by Cathay Pacific direction and employees.

The administration of Cathay Pacific is strongly dictated by Swire Pacific whom have a 46 % shareholding in the company. with CITIC Pacific keeping 26 % and as antecedently mentioned. John Swire & A ; Songs supplying direction services to the air hose. Cathay Pacific has six senior directors than govern the company.

these are inclusive of ; Chris Pratt ( Chairman ) . John Slosar ( Chief Executive ) . Ivan Chu ( Chief Operating Officer ) . Martin Murray ( Finance Director ) . Richard Hall ( Director Flight Operations ) and Christopher Gibbs ( Engineering Director ) . There is a strong hierarchal construction within Cathay Pacific.

as is the instance with most South East Asiatic houses as they strive for efficiency through authorization and besides clear regulations and ordinances. This heightened formalization allows for Cathay Pacific to battle the jobs that air hoses can confront. as is discussed following ( Cathay Pacific. 2012 ) .The organizational construction of an air hose has to be reasonably perpendicular with clear ironss of bid. as the running of an air hose can go highly complex with respect to information sharing.

accurate agendas. and gross revenues publicities invariably altering. It must besides be an adaptable construction. one which Cathay Pacific employs. as there are assorted different factors. for illustration. weather conditions that can dramatically alter any one of these constituents ( Scribd.

2012 ) Ultimately of class. Cathay Pacific is owned by the stockholders. and therefore the organizational construction and direction is reviewed at the one-year general meetings for the company. It is for this ground that the people in control of the construction are invariably altering at the stockholders discretion.2.

2 Products and ServicesCathay Pacific. based in Hong Kong. offers rider and lading services to 102 finishs worldwide ( Scribd. 2012 ) . Cathay Pacific offers scheduled long-haul cargo services to many finishs around the Earth.

include all major international metropoliss in Asia. Europe and the Americas. There are besides several more regular lading operations that run within South East Asia on a more frequent footing of about six times a hebdomad covering countries including Japan. Taiwan. South Korea and Hong Kong. Other merchandises on offer with respect to cargo services are the hauling services that Cathay Pacific arranges throughout every continent.

These services allow clients the luxury of holding lading delivered to all points of the Earth. even when there are no direct flights to these finishs. In correlativity with the fact that they offer the services to enable lading to be transported. Cathay Pacific besides offers many different merchandises that facilitate these operations.
For illustration.

comprehensive temperature direction for pharmaceutical merchandises. particular attention for unrecorded animate beings. high security for high-value cargos. cold-chain direction to guarantee that lading arrives fresh.

and assorted other merchandise handling services. Additionally. Cathay Pacific offers assorted contracted services including lading chartering and besides preparation services for those persons whom are desiring to larn about the correct procedures when it comes to managing lading in theodolite. All of these constituents adding to Cathay Pacific’s of all time spread outing merchandise portfolio ( Cathay Pacific. 2012 ) .However.

above all of these merchandises and services offered. the chief activity of Cathay Pacific Airline is that of rider flights. This international air hose offers passenger flights to over one 100 finishs around the universe and supply services including. but non limited to. aircraft catering.

handling and technology. air crew. fiscal services every bit good as belongings investing and other e-business solutions such as electronic and computerised reserve systems ( Scribd. 2012 ) In add-on to the basic travel and engagement demands.

Cathay Pacific has developed a epicurean environment in which riders can bask their experience. Such developments in their airdrome sofa services. inflight amusement. and advanced engineering aboard flights allow for the company to hold developed a competitory border sing their service portfolio ( LinkedIn.

2012 ) .2. 3 Markets and CustomersCathay Pacific remains one of the 10 largest air hoses by market portion ( CAPA. 2012 ) . Cathay Pacific’s chief client base orientates around the concern travelers that reside in Hong Kong. North America.

Asia and Europe but evidently being an international air hose. its markets lay with the worldwide travel environment. and with over 102 finishs there are a great trade of different economic systems to market towards. The clients that they tend to pull are those whom are willing to put more money in their flights for the luxuries of amusement. service and comfort and market hence towards the premium terminal of the frequent international traveler ( Broda. et Al.

. 2002 ) . To let for these kinds of clients to be targeted straight. the company uses web sites such as LinkedIn. in order to straight reach concern people and therefore the people that usually buy their services ( Turner. 2012 ) .
Bing a luxury air hose.

it is these people that they need to aim in order to derive the audience that will drive the trade name frontward. The chief market they cater towards is that of South East Asia with rivals in this country including Singapore Airlines who is besides a South East Asian based air hose of high quality and service. As the air hose is based in Hong Kong it allows for Cathay Pacific to see the progress of holding a South East Asian hub that makes travel within this country of the universe efficient and less dearly-won. As many of its clients are concern people who are going for work demands.

the roar in the economic system in countries such as China and the remainder of Asia have allowed for Cathay Pacific to capitalize upon these countries and therefore construct a strong foundation upon which to establish the air hose ( Scribd. 2012 ) .2. 4 RivalsObviously. there are many good criterion air hoses at the minute as abroad travel becomes an increasing demand for consumers what with the oncoming of globalization. As concern clients are Cathay Pacific’s mark market. and are the bulk of the people who make up those doing regular long-haul flights.

the company is holding to measure it’s rivals and the competitory advantages they possess against them. Cathay Pacific’s competitory advantages include it’s first-class service with respect to it’s aircrafts. in-flight services and concern operations. The fleet of aircraft it possesses is comparatively new so as riders are ever comfy.

and most significantly safe on their journeys. As antecedently mentioned. Cathay Pacific is advanced when it comes to it’s concern operations.

particularly e-business. as it employs systems that allow for riders to be informed through assorted different e-media about their flight inside informations and offers installations such as self-check in devices.
Furthermore. another competitory advantage that Cathay Pacific possesses is its location. with Hong Kong being a travel hub for Asia. a major concern market sphere. The major air hoses that compete with Cathay Pacific are Continental.

Emirates and Qantas. as they offer many similar criterion services. monetary values and flight paths. In add-on to this. because of the rise in the monetary value of air power fuel. and the demand for flights.

low budget air hoses have experienced important growing. Although Cathay Pacific caters towards higher terminal clients. the competitory advantage of low monetary value flights from other rivals of a lower criterion is turn outing to dent Cathay Pacific’s net income borders. To battle this. Cathay Pacific’s major competitory revenge is to offer ‘Oneworld’ a flight stat mis initiative which provides frequent air hose users major benefits for reiterating their usage of the Cathay Pacific air hose ( Malkani. et Al.

. 2005 ) . Additionally. Cathay Pacific is invariably puting in it’s air hose in order to be advanced with what is it able to offer and therefore remain competitory in the planetary air hose market.2.

5 Fiscal AnalysisThe undermentioned subdivision has been adapted from the one-year consequences for 2011 published by Cathay Pacific and inside informations both the one-year net incomes and besides the one-year costs for the terminal of the 2011 twelvemonth. every bit good as a comparing of the old twelvemonth that is 2010. and the alterations between these one-year consequences ( see Fig 1 and Fig 2 ) .
Fig 1.Annual Results for Earnings| 2011 ( HKDm ) | 2010 ( HKDm ) | Change| Group Attributable Profit| 5. 501| 14.

048| -60. 8 % |Group Turnover| 98. 406| 89. 524| +9. 9 % |Net income Margin| 5. 6 % | 15.

7 % | -10. 1 % |Tax return on Capital Employed| 8. 6 % | 22. 0 % | -13. 4 % |Net incomes per Share| ( cents ) 139. 8| ( cents ) 357. 1| -60.

9 % | Dividends per Share| ( cents ) 52| ( cents ) 111| -53. 2 % |

From this tabular array. it can be noted that even though the turnover for Cathay Pacific has increased. it’s net income borders are well lower. as it the group attributable net income by a immense 60.

8 % negative alteration. The ground for this will be detailed in the following tabular array. It would incite though that the addition in costs is outweighing the addition in income that the company is sing and therefore are non having as much return on the capital the company is using as in old old ages. As you can see from this. the net incomes per portion and dividends per portion for Cathay Pacific have decreased well. this may do jobs within the company as if the portions are non seen to be profitable. people will sell. the monetary value will travel down and later the air hose will non hold the investing it needs for development.

Fig 2.Annual Results for Costs| 2011 ( HKDm ) | 2010|Staff Costs| 14. 772| 6. 7 % |Inflight service & A ; passenger| 3. 794| 14.

7 % |Landing. parking & A ; route| 13. 105| 16 % |Fuel| 38. 877| 37. 5 % |Aircraft Maintenance| 8. 468| 19. 7 % |Depreciation. amortization & A ; leases| 9.

402| 0. 1 % |Net Finance Charges| 744| -23. 9 % |Others| 4. 488| -14. 8 % |Entire Operating Costs| 93. 650| 17. 9 % |

( Adapted from: Cathay Pacific. 2012 )The information that can be obtained from this fiscal analysis.

is that finally. Cathay Pacific are non executing every bit good financially for the 2011 twelvemonth as they did for the 2010 financial twelvemonth. This can mostly be attributed to the high fuel costs in air power fuel that airlines incur as this has been their chief cost addition as it has risen by a monolithic 37. 5 % in merely one twelvemonth which has damaged the company’s net income borders. In their studies.

Cathay Pacific have identified this as a job they face and will hold to counterbalance for. though it may take to costs being transferred to clients.
This addition in the cost of air power fuel is ineluctable.

and all air hoses will incur the costs. nevertheless. because Cathay Pacific is already comparatively expensive because of its mark market. there is a concern that these costs will discourage clients from utilizing the air hose and holding to give the good service that Cathay Pacific strive to offer in order to derive the monetary value benefits that come with low budget air hoses. The fiscal analysis shows though that even though costs are increasing by rather sensible per centums. the net finance charges and hence involvement rates are diminishing. leting for Cathay Pacific to borrow money more cheaply in order to finance the development of their air hose.

which with hopefully lead to more gross revenues and an addition in gross for the company.2. 6 External InfluencesAirlines in general are really susceptible to damage from external influences beyond the company’s control. In an international market particularly economic downswing in any economic system can hold an consequence on clients willingness to go. and therefore with recent recessions. budget air hoses are much more favorable for those taking to wing to their finishs due to a deficiency of disposable income and cost limitations. Furthermore. as has been discussed at length in this essay.

the monetary value of air power fuel is non dictated by the air hose. and hence seeing a rise in these costs will add to Cathay Pacific’s outgo. because of this net income borders will ( and have already been seen to ) lessening due to the cost of fuelling the planes. Another external influence than can impact the prosperity of air hoses is the ongoing menace of terrorist act.

In this twenty-four hours and age where security is in the head of the clients mind. some people will really avoid air travel due to the impending danger they feel they are under from the promotion that terrorist act is given after such events as 9/11 and the highjacking of those flights.
Another external influence that is outside of the airline’s control. particularly Cathay Pacific in the state that it operates within is utmost conditions and the inability for planes to wing when under these fortunes. Cathay Pacific is based in Hong Kong. a metropolis renowned for holding a clip of twelvemonth when typhoons are really prevailing and later airport closing at times throughout the twelvemonth when other international air hoses and airdromes will non experience the effects.

Airport revenue enhancement is besides increasing as the media and authoritiess address the demand for people to ‘reduce their C footprint’ . and as aeroplanes contribute a important sum to carbon emanations and the usage of non-renewable fossil fuels. air hoses are happening their operation costs of running the company are increasing. another factor adding to the hurt of net income borders ( Cathay Pacific. 2009 ) .

Another external impact that air hoses. including Cathay Pacific face that cause an addition in air hose operational costs is that of legal demands sing the stuffs used within and to construct aircrafts in order to do them safe for riders and staff members. these legal processs and sometimes expensive stuffs add to the costs of running an air hose. and sometimes detain the procedure of plane building.In contrast to the economic downswing and recessions in many concern economic systems doing people to hold a deficiency of disposable income.

it can besides be said that low involvement rates incurred by this can do it cheaper for people to go. and therefore hold more money to pass utilizing air hoses in the ‘luxury’class. a premier illustration being Cathay Pacific. Political influences can besides impact air hoses.

For illustration. the development of the freedom and motion in the European Union has allowed for competition to increase on these paths. and as this is one of Cathay Pacific’s chief finishs for their concern clients and lading being imported. this addition in competition can hold a damaging consequence on the concern. Finally. other external influences impacting air hoses such as Cathay Pacific are those including the wellness hazards of going to Asiatic states.

A immense illustration of this would be the eruption of SARS which saw Cathay Pacific suffer because of the deficiency of travel to. from and around Hong Kong. All of these factors are outside the control of Cathay Pacific and hence can non be prevented but merely combatted when the state of affairs arises. It is for this ground that Cathay Pacific has several enterprises detailed in its studies about what eventuality plans the air hose possesses should any one of these jobs arise. and the compensation that will be given to the clients if their travel should be affected by this ( The Times Online. 2012 ) .

3. 0 EvaluationUpon deriving information from this study and the academic and commercial reading that has been done environing the company. it can be seen that Cathay Pacific holds a really strong place in the air hose market and particularly within it’s ‘luxury’ air hose class. The company has the ability to supply efficient service for it’s clients both more locally in its hub ( South East Asia ) and besides internationally with its fleet of invariably updated aeroplanes and engineering. Cathay Pacific demonstrates the cardinal indexs of a prima air hose in both its rider travel and besides cargo operations. It strives to supply the first-class service needed from an air hose but besides the involvement in technological and e-business progresss that will let itself to stay competitory in an environment where money is going a really strong influence over purchaser penchant. Obviously.

every company has its jobs. and for Cathay Pacific. as is the instance with many air hoses at the minute there is a important hurt to gain borders due to the addition in air power fuel as portion of the planetary inducement to battle harm to the environment and the ozone bed.

This job is ineluctable and is being experienced and translated into all air hoses monetary values. It is unfortunate that Cathay Pacific. as a luxury air hose. already provided clients with comparatively high monetary values. However.

looking at the fiscal analysis of the company. it can be seen that turnover is increasing. but is being outweighed by the addition in costs and therefore non translated positively into net incomes. Aviation fuel costs aside. it can be said that Cathay Pacific holds itself in good standing with respect to efficient organizational construction and invention in engineering and services in order to maintain the company competitory and pull the client base that allows for stockholders to have their returns on investing. Due to the figure of awards that Cathay Pacific has won with respect to the quality of its air hose and services. it would look that even though monetary values may be increasing. it will stay really competitory in the luxury market and against its immediate rivals.

The type of air hose that Cathay Pacific is can afford slightly to hold reverses from the external influences that detriment the concern as their mark audience are those whom have the disposable income to afford to purchase epicurean merchandises. trade names. and services. However. the external influences that have been identified go to demo that being in the air hose concern can be ambitious and therefore the air hose companies in general. Cathay Pacific in peculiar. have to invent eventuality programs and schemes through the formalization of their company in order to be able to battle these jobs expeditiously should they originate. understating the harm done to non merely the business’ net income borders but company image.

as air hoses are a service that benefit from other client recommendation and word of oral cavity selling.4. 0 Cathay Pacific vs. British AirwaysCathay Pacific.

based in Hong Kong and British Airways. based in London are both in the ‘luxury’ air hose class. They are both international air hoses. sharing the same primary air hose confederation that is ‘Oneworld’ . British Airways nevertheless. does non hold any spouse air hoses as Cathay Pacific does with Dragonair and Air China ( Airlines. 2012 ) . As a luxury air hose class.

British Airways markets itself towards the same client base as Cathay Pacific. these being people who are willing to pass somewhat more on flights for the comfort and service that these luxury air hoses provide as an advantage. in comparing to the low cost budget air hoses who’s selling point is the fact that they are.

in most instances. dramatically cheaper. but evidently do non offer the same services and criterion of travel as the likes of British Airways an Cathay Pacific.

Cathay Pacific is an air hose which offers lading services. whereas British Airways has a subordinate company that allows the air hose to run into client demands when it comes to this.The British Airways version of the lading service is known as ‘BA World Cargo’ whom offer an array of assorted lading services similar to that of Cathay Pacific ( British Airways. 2012 ) .

If one examines the net income of British Airways. around the same clip period that has been discussed for Cathay Pacific in the study. we can see that.

in footings of Hong Kong Dollars British Airways made 1. 914 billion Hong Kong Dollars gross attributable net income. in comparing with Cathay Pacific who’s net income was 5. 501 billion Hong Kong Dollars ( British Airways. 2010 ) . From this it is clear that Cathay Pacific.

despite their lessening in net incomes. is still executing comparatively good in comparing to its international rivals in the same air hose class.With respect to the figure of finishs the two companies serve. British Airways is larger as it flies to 48 more finishs than the 102 that Cathay Pacific serve ( British Airways. 2012 ) . these are inclusive though of six domestic finishs. Comparing the figure of employees the companies have. as antecedently mentioned Cathay Pacific using about 30.

000 including those employed within its subordinates. British Airways employs 57. 000 people ( British Airways. 2012 ) . This is 27. 000 more employees than that of Cathay Pacific which could be attributed to the fact that Cathay Pacific has such advanced engineering with respect to engagements.

check-ins. and general technological capablenesss that the work force need non be every bit big as those who employ human labor.Ultimately. there is non much that can be deviated between air hose running and operational construction due to the fact that the industry is so formalised by authoritiess and external administrations in order to guarantee client and staff safety. I feel nevertheless. that Cathay Pacific is a more technologically advanced and advanced air hose. forcing the boundaries of what is allowed in order to supply a more efficient.

enlightening and comfy service for clients whereas British Airways is trusting on the more traditional values of what upholds a good air hose with no serious respect for being at the head of air hose invention because of its reputable British name that has allowed it to stay successful.5. 0 MentionsAirlines. ( 2012 ) Find The Best Website.

Available at: hypertext transfer protocol: //airlines. findthebest. com/compare/9-30/British-Airways-vs-Cathay-Pacific-Airways Last Accessed: 22nd June 2012 British Airways. ( 2010 ) British Airways Press Release Website. Available at: hypertext transfer protocol: //press.

Ba. com/ ? p=1517 Last Accessed: 22nd June 2012 British Airways. ( 2012 ) British Airways Cargo Website. Available at: hypertext transfer protocol: //www. baworldcargo.

com/ Last Accessed: 22nd June 2012 British Airways. ( 2012 ) British Airways Website. Available at: hypertext transfer protocol: //www. britishairways. com/travel/why-fly-ba/public/en_de Last Accessed: 22nd June 2012 British Airways ( 2012 ) British Airways Job Website. Available at: hypertext transfer protocol: //www.

britishairwaysjobs. com/baweb1/ Last Accessed: 22nd June 2012Broda. S. . Damer. D.

. Keawsuwan. S.

. Tong. Y.

. & A ; Xin. L. ( 2002 ) ‘Cathay Pacific. Lufthansa. and Thai Airways’ . Available at: hypertext transfer protocol: //www. gaoshan.

de/university/tp/term_paper-lufthansa-cathay-thai. pdf Last Accessed: June 22nd 2012 CAPA. ( 2012 ) Centre For Aviation Website. Available at: hypertext transfer protocol: //www. centreforaviation. com/analysis/financials/cathay-pacific-profit-falls-but-from-a-record-level-as-it-manages-very-well-in-a-tough-environment-69852 Last Accessed: 22nd June 2012 Cathay Pacific ( 2009 ) Cathay Pacific Website. Available at: hypertext transfer protocol: //downloads. cathaypacific.

com/cx/press/SDreport_en2009. pdf Last Accessed: 22nd June 2012 Cathay Pacific. ( 2010 ) Cogmap Website. Available at: hypertext transfer protocol: //www. cogmap.

com/chart/cathay-pacific-airways Last Accessed: 22nd June 2012 Cathay Pacific. ( 2012 ) Cathay Pacific Website. Available at: hypertext transfer protocol: //www.

cathaypacific. com/cpa/en_BH/aboutus/cxbackground/factsheet? refID=37560e56ef7cf010VgnVCM32000011d21c39 Last Accessed: 22nd June 2012Cathay Pacific. ( 2012 ) Cathay Pacific Website. Available at: hypertext transfer protocol: //www. cathaypacific. com/cpa/en_BH/aboutus/cxbackground/history Last


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