Hong Kong-based Cathay Pacific Airways is planning a major expansion of its fleet in the run-up to its 70th anniversary next year.
Late in September, Cathay Pacific Airways welcomed its 70th Boeing 777 aircraft, which was also the 53rd and last Boeing 777-300ER (extended range) of its confirmed orders. It gives Cathay Pacific Asia's largest 777 fleet, and the second-largest globally after Emirates.
After the latest delivery, Cathay Pacific's 777 aircraft fleet is made up of 53 777-300ERs, 12 777-300s and five 777-200s. The airline is one of the launch customers for the 777X, with 21 777-9X planes on order.
The Boeing 777 family is mainly for long-haul routes. According to Boeing, the 777-300ER, which will receive further improvements in 2016 designed to reduce fuel use by 2 percent, is the most fuel- and cost-efficient airplane in its class.
Fleet expansion
Cathay Pacific took delivery of its first 777-300ER in September 2007. This aircraft allows the airline to modernize its long-haul fleet with enhanced operational efficiency and extended range.
James Tong, Cathay Pacific's director of corporate affairs, told the Global Times in September that the new aircraft will be mainly used on European and US routes.
He predicted that passenger flow and capacity will increase by 5 to 6 percent per year in the coming 10 years.
To improve competition and efficiency, the group plans to invest more in new planes.
Cathay Pacific received 16 aircraft in 2014, seven in the first half of this year, and one 777-300ER in September. The company said 70 airplanes on order will be received in the next nine years, including 48 Airbus A350s, 21 Boeing 777-9Xs and one Boeing 747-8F.
Market competition
Still, Cathay faces stiff competition as a number of carriers ramp up operations focusing on its home turf of the mainland.
Emirates announced a number of management changes in its commercial operations department Monday that will see two UAE nationals assuming new roles to support the airline's growth in the Middle East and Far East as part of its strategic focus on these regions.
On October 7, Finnair said it will replace the current A330 airplanes on its Shanghai and Beijing routes with the A350 XWB, and reopen a route from Guangzhou to Helsinki in the summer of 2016.
Meanwhile, three Chinese State-owned airlines are exploring international routes, with an order of 300 airplanes declared during President Xi Jinping's visit to Seattle in September, including 250 Boeing 737 and 50 wide-body aircraft. The latter will likely be used on long-haul routes.
The Civil Aviation Administration of China said in September that China's international passenger flow exceeded that of domestic flights from the second half of 2013. It also said 84 new international routes opened in the first half of this year, up 35 percent year-on-year, with international air passenger flow growing 38.5 percent in the same period.
When asked if domestic carriers could impact Cathay Pacific by reducing the number of Chinese mainland passengers transferring to international flights in Hong Kong, Tong said growth in transfers from northern China has declined to less than 10 percent, although demand for transfers from passengers coming from the Pearl River Delta region, adjacent to Hong Kong, remains above 10 percent.
Defensible home turf
Tong also said he did not believe that mainland airlines could threaten Cathay Pacific's development in the domestic market, as domestic demand keeps rising, and the company holds a 20 percent stake in Air China, which will bring income to Cathay Pacific.
The mainland is an important market for the company, and it is considering increasing its flights between Shanghai and Hong Kong from the current two per day. It is also looking to add more destinations to its roster, including Germany and the U.S.
Cathay's order of medium and long-haul aircraft does not mean the company will pay less attention to its Asia market, Tong said, adding that its current fleet of medium and short-haul aircraft can handle these routes.
