Cathay Pacific looks to Aussie growth in 2016

By David Flynn, January 12 2016

As Cathay Pacific gears up to celebrate its 70th anniversary this year, the airline will capitalise on its growth in the Australian market and the impact of the China-Australia Free Trade Agreement on business travel into China.

“There are a lot of business opportunities between Australia and China, especially with the  free trade agreement” observes Nelson Chin, Cathay Pacific's Regional General Manager for South West Pacific.

Cathay Pacific and its regional offshoot Dragonair fly to some 20 destinations on the Chinese mainland, and Chin reports “we’ve seen exponential growth on Dragonair into secondary cities” which are regional manufacturing and commercial hubs.

To cater for that surge Cathay Pacific is likely to boost its capacity from Australia, and is considering adding more Boeing 777s to the roster along with a fourth daily flight from Melbourne.

“We have three flights a day already, but given that Melbourne Airport has is no curfew, there is still room that you can fit another flight in.” 

Read: Cathay Pacific eyes Sydney, Melbourne for more Boeing 777s

"As to which routes might take up more Boeing 777s, surely the two biggest cities are high on the priority list" Chin allows.

"That's not to say we're not also considering the likes of Brisbane or Perth, which are also on the radar. We do take a longer-term look into these things, to make the best use of our resources."

A350s for Australia, eventually

Australia will eventually be blanketed by Cathay Pacific’s new Airbus A350s, Chin says. “The idea is that within the next 3-4 years, all the A330s would be switched over to A350s, so that would be the new minimum capacity that we’d have on any flight into Australia.”

The first of the next-gen jetliners in CX strip is expected to take wing in March and will feature an updated business class along with all-new premium economy and economy seats.

Read: Inside Cathay Pacific's all-new Airbus A350

London’s Gatwick Airport has already been confirmed as an A350 route starting September 2nd, giving Cathay Pacific six flights into London alongside Heathrow’s current five daily services.

For Aussie travellers flying onwards from Hong Kong, London is already Cathay’s “number one destination in terms of traditional traffic” says Chin, so Gatwick provides an additional element of choice.

“It’s similar to what we have in New York, Tokyo and Shanghai, flying to two different airports which serve different geographical and passenger needs, and you don’t have to come and go via the same airport if you have meetings in different parts of the city.”

New York popular

New York is another city where Chin recounts “phenomenal growth” out of Australia.

“In Sydney and Melbourne there are many options to get to the USA, but from Brisbane, Perth and Adelaide we often are the quickest way to the USA, especially to the east coast – not just New York but also Boston and Chicago,” Chin explains.

One advantage of heading to New York via Hong Kong is there’s no need to recheck your bags or change terminals at LAX.

“Going through immigration is not the most pleasant experience anywhere in the world, especially with the kind of strict security measures we have today, so going via Hong Kong is quite seamless,” Chin says.

“You can have a good break at Hong Kong, whether you stay for a few days or just a few hours in one of our lounges, and we also have first class for that longer leg between Hong Kong and the US east coast.”

More luxe lounges on the way

Hong Kong will also see the opening of a new Cathay Pacific flagship lounge with The Pier Business Class emerging from an extensive make-over in the second half of the year. 

Like its highly-regarded sibling The Pier First Class (below), the business class lounge is being shaped by Ilse Crawford’s London-based design team Studioilse.

At around 3,000 square metres, the new lounge will include a massive noodle bar and drinks bar, an Asian teahouse room and a dedication relaxation area which Crawford describes as a more “democratic” business class version of The Pier’s Day Suites.”

Read: Cathay Pacific The Pier Business Class lounge set for mod make-over

Cathay Pacific will also cut the ribbon on new first class and business class lounges at London’s Heathrow Airport in June.

The first class section will borrow some elements of The Pier First Class, albeit on a smaller scale, while the business class lounge will be a much larger version of its new-look cousins in Tokyo Haneda, Bangkok, Taipei and Manila, including a 'sit and slurp' Noodle Bar.

The later half of 2016 will lead into a milestone anniversary in September, 70 years after Cathay Pacific began as a HK$2 startup by Australian Sydney de Kantzow and American Roy Farrell.

Also read: Cathay Pacific celebrates 40 years of non-stop flying to Sydney 

Follow Australian Business Traveller on Twitter: we're @AusBT

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

Qantas - Qantas Frequent Flyer

28 Feb 2014

Total posts 145

I really think CX needs to grow more in BNE. They really technically only have 1 daily flight that leaves at 0050 with the 2nd going through CNS (which is dreadful) during the day. The flights are always packed with hardly any seats left.

07 Oct 2012

Total posts 1242

Unless HKG obtains extra rights, I don't see it happening. An upgrade is more probable if the patronage is there.

31 Mar 2014

Total posts 295

CX has reached the maximum flights available into the ports of Syd, Mel, Bris, Per. For them to expand Brisbane, they will need to either take a flight away from another port(highly unlikely), or find a spare 777 to upgauge.

FLX
FLX

10 Dec 2015

Total posts 179

Agree.  Any CX growth @ BNE for the nex few yrs will almost certainly come fm upgauge rather than frequency.  My predictions:

Near term(i.e. 2016-17)=

CX will likely upgauge fm 333 to 77W for @ least a few peak days per wk.  They do hv a huge 77W fleet(In fact the 2nd largest in the world after EK) @ 53units.  As more 359s join CX fleet and replace 77Ws on some routes(Mostly Tier2 EU cities) starting a few mths fm now, a bunch of displaced 77Ws will become available for redeployment across Australia.

Medium-term(i.e. 2018-19)=

As this article reported, CX already planned to replace all 333s with 350s on all Australian routes within the nex 3-4yrs.  In CX configs, its 333 carries about 250seats while 359 carries 280....a 12% capacity jump instantly when CX swap a 333 for a 359 on its BNE route on a daily basis.  That's an additional 200+ seats/wk for the BNE mkt without tweaking current CX frequency.

Long-term(i.e. 2020 & beyond)=

If there's any further growth in demand beyond a daily 359 for BNE, CX has the option to easily swap a 359 for the even larger  35J(Plenty will be in CX fleet by that time) once again without touching current frequency.

 

While preferrable to CX, the above is why I fail to see CX has an urgent critical need to push for relaxation in frequency limit per  current HK-Australia bilateral.

12 Dec 2012

Total posts 952

Not to mention that CX can add flights to any port in AU other then SYD/MEL/PER/BNE whenever they want without limits from the air service agreement.

Perhaps BNE will become the first Australian port to get the A350s then? That will slightly increase the capacity by 30 pax per flight.

Clearly CX doesn't think that HKG - CNS has enough passengers to justify a dedicated A330 service of its own without the BNE sharing. So A350 upgauging looks like the only likely option here.

07 Oct 2012

Total posts 1242

Why guess about the A350, who knows?

Noting that CNS is not included in the air services agreement AND to my knowledge, allows them to operate a tag to/from BNE outside of the ASA.

Himeno probably knows more.

FLX
FLX

10 Dec 2015

Total posts 179

<<perhaps BNE will become the first Australian port to get the A350s...>>

Probably but I can't see any Australian city getting CX's 359 until 2017 @ the earliest.  Aside fm AKL, CX has publicly stated a while ago that the priority geog mkt for 359 longhaul op is Tier2 EU cities nonstop fm HKG....a relatively new segment for CX.  Some are already served by CX's 77W @ below daily frequency and likely too much capacity if going daily(What CX ultimately wants as a traditionally corp-mkt focused carrier).  This is where the smaller gauge 359 becomes extremely useful for CX to implement daily frequency for most/all EU Tier2 mkts and a role experimented with 343 by CX decades ago when  fuel prices were @ or lower than today's level.

All or most 359s delivered to CX this yr are planned to be focused on EU routes. 

Singapore Airlines - KrisFlyer

17 Nov 2014

Total posts 95

I think Hong Kong and Australia should discuss more on their bilateal rights.

Currently flights to the Big 4 airports (PER, SYD, MEL and BNE) are full and they are still in high demand to add more.

I hope on Hong Kong side they will allow up to 108 flights weekly to Australia big 4 airports where Australia will allow Virgin Australia to launch Hong Kong as well as more 5th freedom flights from Hong Kong to North East Asia, such as Japan.

Qantas - Qantas Frequent Flyer

04 Mar 2013

Total posts 42

It would be nice to see an expanded bilateral to allow more flights, it is worth noting that Hong Kong International is severely slot constrained until at least 2023 and even if more rights were granted to both sides it would be hard, very hard on the Australian side, to actually capitilise on those rights. 

Take the recent example of Qantas wanting to expand Sydney-Hong Kong flights by adding an additional daily flight. Due to the slot constrained nature of HK they could only get slots for a 4x weekly flight. Any expansion of the bilateral would disproportionately benefit HK carriers due to the inherent flexbility they possess due to the greater number of slots they control.

Aussie carriers have plenty of capacity left on their side, but they can't effectively use them yet. It is for that reason, I theorise, that a significant expansion of the bilateral won't happen for some time until Australian carriers have the ability to actually use the rights they currently have. After all these agreements generally operate on a quid-pro-quo basis. There are other reasons but they aren't important right here.

As for Virgin Australia, they have the rights to fly to Hong Kong but the slots (at least at attractive times) are virtually non-existent. 

:)

17 Feb 2012

Total posts 121

Agree on this.  Cathay should get no more access to landing slots or anything else until all Australian carriers get the same access (and landing slots) into HK.  The fact Cathay can fly 4 times daily into Sydney and Qantas can't even get slots for another daily is bizarre and completely unfair. 

Qantas - Qantas Frequent Flyer

12 Jul 2014

Total posts 110

Perhaps if QF says 'sorry' to CX for the JQHK debacle and negotiates a better position as alliance partners, or even as proper JSA partners, they could both expand the flights.

Both win! CX gains QF's domestic connections, QF gains Dragon air connections. Both airlines operate as proper OW airlines, customers win.

Virgin Australia - Velocity Rewards

30 Sep 2015

Total posts 12

Looks like an exciting year for Cathay. I really hope HK - AUS bilateral rights increase. It's sad that the Australian Government is probably still sulking over QANTAS's failure of JQHK. Hopefully they can forget that incident and give Cathay a sensible departure time slot at BNE
FLX
FLX

10 Dec 2015

Total posts 179

<<...give Cathay a sensible departure time slot at BNE>>

While current time slot may not appear as <<sensible>> for OD traffic of HKG-BNE, it's an extremely sensible dep time slot for traffic connecting @ HKG hub.  For BNE travellers heading to JFK, YYZ and LHR, layover in HKG can be as short as under 3.5hrs and these destinations are where CX make the real $ fm the BNE mkts.  Similar story in the reverse direction and for travellers originating @ JFK, YYZ and LHR heading to BNE.  Not to mention the classic connecting opportunities for a mind-boggling range of N.East Asian destinations+the entire KA China network(e.g. If U leave BNE after mid-nite, U can be @ PVG, PEK, HND or ICN by lunch time).

For CX, the HKG-BNE route is no longer only about shuttling folks between Hong Kong and Brisbane anymore(Actually, similar story re other Australian cities).

Qantas - Qantas Frequent Flyer

04 Mar 2013

Total posts 42

While the JQHK incident MAY (note MAY) make the government slightly more reticent to expand the bilateral (I doubt it would be a major or even a minor issue), the biggest issue overall would be the non-availability of slots of Hong Kong for Australian carriers to actually use. You can bet your bottom dollar that Qantas and probably Virgin would campaign against any increase until they can actually use their rights by obtaining slots. 

Cathay would need to show more significantly the need for more rights to Australia. They are now starting to do this by increasing the capacity of their flights ,but with the majority of their flights using their lowest capacity aircraft they don't present the strongest possible case for more rights.

Also, at least according to past negotitaions, Australia wants more beyond rights for Aussie carriers and Hong Kong has been reluctant to grant them. As Australia does not use all their rights (and wouldn't use them all at this time even if they could), Australia would not necessarily be favouring granting more rights and instead would be looking for alternate advantages for Australian based carriers.

For my part, I'd love to see open skies but that seems unlikely in the short term. I'm certainly NOT an expert, but these are just my observations.

07 Oct 2012

Total posts 1242

Very unlikely in the short term.

There needs to be something given back and Hong Kong played its cards. In any case, Cathay has a whole bunch of options available to it such as upgauging and flying to other airports.

22 Aug 2013

Total posts 9

CX Chose this departure slot for the BNE Market to better meet the Business Travel market for Overnight flights to HKG.  The Overnight return is covered by the Cairns transit flight.CX Did not want to have a schedule that had the Aircraft sit on the Ground all day t allow overnight both ways..... CX was not forced to make this schedule change It was theirchoice based on Market demands


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