7jetset7

Sign Up Now for
7J7 Updates and
Exclusive Content !
only $27 /year

Receive thousands of updates and pertinent information for all airlines, especially the ones that matter most to you!

We take the guess work out of flight and airport data — we are the most up-to-date resource for international airline information.

Airlines

Name: CATHAY PACIFIC AIRWAYS
7JetSet7 Code: CAT
Status: Operational
Region: CHINA
City: HONG KONG
Country: CHINA
Employees 19500
Web: cathaypacific.com
Email: engcal@cathaypacific
Telephone: +852 2 747 5000
Fax: +852 2 810 6532
Sita: HKGMZCX
Background
(definitions)

Click below for data links:
CAT-1997-07-FAREWELL KAI TAK
CAT-2001-03-A
CAT-2001-03-B
CAT-2001-03-C
CAT-2002-TOP-WLD-CARGO
CAT-2003-BEST-AIRLINE-AWARD
CAT-2003-TRAFFIC-STATS
CAT-2003-WLDTOP25
CAT-2004-03
CAT-2004-04-A
CAT-2004-06-A
CAT-2004-06-B
CAT-2004-06-C
CAT-2004-06-D
CAT-2004-08
CAT-2004-10
CAT-2004-11
CAT-2004-12
CAT-2004-1ST6MTHS-STATS
CAT-2004-1STQTOPRPK
CAT-2004-RPK-STATS
CAT-2004-WORLD-RPK
CAT-2005-04-A
CAT-2005-09-A-747-400SF
CAT-2005-TOP-RPK
CAT-2006 WLD TOP RPK
CAT-2006-02-A
CAT-2006-02-B
CAT-2006-02-C
CAT-2006-OPS
CAT-2007-STATS
CAT-2007-TOP-WLD-CARGO
CAT-2008-02-LOW FLYBY
CAT-2008-TOPWLD6MTHSRPK
CAT-2008-WLD-TOP-RPK
CAT-2008-WORLD TOP 10 CARGO
CAT-2010-08-A350XWB ORDERS
CAT-2011-01-2010 WORLD TOP TRAFFIC
CAT-2011-08 - 747-8F 1ST FLT
CAT-2013-07 - 1000 TH A330
CAT-2013-12 - SPIRIT OF HONG KONG
CAT-2014-10 - LOUNGE
CAT-2014-10 - LOUNGE-A
CAT-2014-10 - LOUNGE-B
CAT-2014-10 - MOBILE WEBSITE
CAT-2015-04 - TOP 25 WORLD TRAFFIC.jpg
CAT-2015-04 - TOP REGIONAL TRAFFIC.jpg
CAT-2015-08 - HAECO.jpg
CAT-2015-08 - Top 10 Premium Economy-6th.jpg
CAT-2015-09 - 70th 777.jpg
CAT-2015-09 - Dusseldorf to HKG.jpg
CAT-2015-09 - TOP 10 2015.jpg
CAT-2017-03 - Lufthansa Code Share.jpg
CAT-AIRPORT TERMINALS AT-LHR-LAX
CAT-AIRPORT TERMINALS AT-SYD-HKG-BKK-SIN
CAT-Cabin Attendants - 2014-04.jpg
CAT-CABIN ATTENDANTS-2014-10
CAT-HKG-AIRPORT-A
CAT-HKG-AIRPORT-B
CAT-HKG-AIRPORT-C
CAT-HKG-AIRPORT-D
CAT-HKG-AIRPORT-E
CAT-HKG-AIRPORT-F
CAT-HKG-AIRPORT-G
CAT-LOGO
CAT-LOGO-TAIL
CAT-MAINTENANCE MRO-HAECO
CAT-MAP
CAT-NEW LOGO - 2014-10
CAT-ONEWORLD AIRLINES
CAT-VISIT HONG KONG EXHIBITION 2011
CAT-VISIT HONG KONG-1
CAT-VISIT HONG KONG-2
CAT-VISIT HONG KONG-3
CAT-VISIT HONG KONG-4
CAT-VISIT HONG KONG-5
CAT-VISIT HONG KONG-6
CAT-VISIT HONG KONG-7

FORMED AND STARTED OPERATIONS IN 1946. NATIONAL CARRIER. REGIONAL & INTERNATIONAL, SCHEDULED & CHARTER, PASSENGER & CARGO, JET AIRPLANE SERVICES.

ADDRESS:
CATHAY CITY, 8 SCENIC ROAD,
HONG KONG INTERNATIONAL AIRPORT, LANTAU ISLAND,
HONG KONG (SAR), CHINA

Hong Kong on July 1st, 1997 became a semi-autonomous territory within Mainland-China. It covers an area of 1,071 sq km, its population is 6.5 million, and its official languages are Chinese and English.

MAY 1992: SWIRE GROUP MAJORITY 51.8% SHARES SINCE 1948, CHINA INTERNATIONAL TRUST 12.5%, CHINA NATIONAL AVIATION 5%, CHINA TRAVEL SERVICE 5%.

OWNS: DRAGONAIR (DRG) 43%, AIR HONG KONG (AHK) 75%.

11/11 ORDERS (MARCH 1996) 777'S (RR) (TRENT 882-17), 319 PASSENGERS (PAX), 18 FIRST (F), 45 BUSINESS (C), 256 ECONOMY (Y), "A" MARKET 5,600 NM RANGE, WITH LATER "B" MARKET 7,600 NM RANGE, STRETCHED 20%.

JANUARY 1993: 1992 = +$309.8 MILLION (NET PROFIT) (+1.9%): +12.7% (RPK) TRAFFIC, +13.1% PASSENGERS (PAX), +14.7% (FTK) FREIGHT TRAFFIC.

SEPTEMBER 1993: 1 747-400, (ILF) 4 YEAR LEASED.

DECEMBER 1993: $801 MILLION, 6/8 ORDERS (OCTOBER 1994) A340-300'S (CFM56-5C4), 260 PAX, TO REPLACE 4 A340-200'S (CFM56-5C2), PHILIPPINE (PAL) LEASED. TO CONVERT 17 L-1011'S, TO 49C, 250Y.

JANUARY 1994: 1993 = +$294 MILLION (-23.8%): +5.7% (RPK) TRAFFIC, +6% PASSENGERS (PAX), +13.1% (FTK) FREIGHT TRAFFIC, 70% LF LOAD FACTOR (-3.5%).

JUNE 1994: 747-400F (RB211-524G) DELIVERY, 1ST IN ASIA, FOR (HKG) - (LAX), & (MEL)/(SYD).

JULY 1994: 1ST 6 MONTHS = +$103 MILLION (+18%): +14% (RPK) TRAFFIC, +11.7% PASSENGERS (PAX), 14.8% (FTK) FREIGHT TRAFFIC.

1 ORDER 747-400, (ILF) 4 YEAR LEASED.

OCTOBER 1994: 1ST A340-200 (CFM56-5C2) DELIVERY, EX-PHILIPPINE (PAL).

JANUARY 1995: 1994 = +$307.9 MILLION (+4.1%): +19% (RPK) TRAFFIC, +15% (FTK) FREIGHT TRAFFIC. (HAECO) = +$54 MILLION.

MARCH 1995: 1ST A330-300 (TRENT 772-60) DELIVERY, INCLUDING 90 MINUTES EXTENDED TWIN-ENGINE OPERATIONS (ETOPS) (JAA) APPROVAL. 2ND A340-200 DELIVERY.

MAY 1995: 1ST 777-200 (WA101) ROLL OUT AND 1ST FLIGHT. 2ND A330-300 (TRENT 772-60) & 1 747-400 (RB211-524H) DELIVERIES.

JUNE 1995: PARIS AIR SHOW ANNOUNCEMENT OF LAUNCH, 7 ORDERS (MAY 1998) 777-367'S.

JULY 1995: 2ND 747-400F DELIVERY (CARRIED 95 TONS OF CHERRIES, VANCOUVER - HONG KONG (HKG).

AUGUST 1995: 1ST 6 MONTHS = +$127 MILLION (+22%) (+$104.3 MILLION): +7.3% (RPK) TRAFFIC, +25% (FTK) FREIGHT TRAFFIC (FROM A330, & A340, REPLACING L-1011'S).

L-1011-385-1 (VR-HHW) RETURNED TO LESSOR.

OCTOBER 1995: TO PASS ITS ROUTE TO KAOHSIUNG ON TO DRAGONAIR (DRG).

NOVEMBER 1995: (HAECO) & (RR) 50/50 JOINT VENTURE, NAMED "HONG KONG AERO ENGINE SERVICE" LTD (HAESL), TO OPEN 1997, AT TSEUNG-KWAN-O. (RR) PAID $20 MILLION TO DO REGION'S (RB211) & (TRENT) ENGINES, WITH 120,000 LB THRUST TEST BED. COMMITMENT FROM (CAT) ANDREW HERDMAN, MANAGING DIRECTOR (HAECO), & IAN LLOYD, MANAGING DIRECTOR (RR) AERO ENGINE SERVICES.

NEW ROUTE TO (JFK), VIA VANCOUVER (747-400, 5/WEEK). ADDITIONAL FLIGHTS TO JAKARTA & AUCKLAND (AKL), NZ.

+2 ORDERS (SEPTEMBER 1996 & JANUARY 1997) A330'S (TO TOTAL 11), 2 CLASS, 50C, 270Y PAX. 1 A330-300 (TRENT 772-60) DELIVERY (6TH).

JANUARY 1996: 1995 = +$385 MILLION (+24.7%).

3 747-200 COMBIS TO WICHITA, FOR SUPERFREIGHTER MODIFICATIONS. 7TH A330-300 (TRENT 772-60) DELIVERY.

MARCH 1996: (HKCAD) 120 MINUTES EXTENDED TWIN-ENGINE OPERATIONS (ETOPS) APPROVAL FOR A330.

MAY 1996: "MUTUAL ASSISTANCE" AGREEMENT WITH SOUTH AFRICAN AIRWAYS (SAA), EMIRATES (EAD), AND POSSIBLY SINGAPORE AIRLINES (SIA) - TO SHARE RESOURCES, PEOPLE, & EXPERTISE, IF EITHER EXPERIENCES ANY EMERGENCY, AWAY FROM THEIR HOME BASE.

SWIRE GROUP SELLS $940 MILLION STAKE 52.6%, BUT STILL OWNS >43.9%.

BEIJING'S HONG KONG, ARM CITIC PACIFIC, PAYS $815 MILLION FOR 10% < 25% OWNERSHIP.

4 777-200 DELIVERIES, FOR SERVICE TO TAIPEI, TOKYO OSAKA, BANGKOK, BAHRAIN, & DUBAI.

JUNE 1996: GAINS 120 MINUTES EXTENDED TWIN-ENGINE OPERATIONS (ETOPS) APPROVAL FOR THE 777.

1 777-200A DELIVERY. 1ST OF 6 A340-300'S TO REPLACE 4 A340-200'S LEASED IN SERVICE.

JULY 1996: FRED CHAN REPLACED STEVE JONES AS ACTING GENERAL MANAGER, COMPONENT & AVIONICS OVERHAUL. PETER LEE REPLACED W C WONG AS LINE MAINTENANCE MANAGER. DICK BRENNAN REPLACED ROY LAVERTY AS QUALITY ASSURANCE MANAGER. THESE ARE ALL (HAECO) CHANGES.

1ST 6 MONTHS = +$213 MILLION, HELPED BY SALE OF DRAGONAIR (DRG) STOCK (+12.5%).

AUG 1996: 3 747-200B'S (CF6-50C2), EX-VARIG (VAR) DELIVERIES. 3RD 777-200 DELIVERY.

SEPTEMBER 1996: 50 YEARS ANNIVERSARY!

SIGNED $2.2 MILLION CONTRACT WITH (IBM) FOR DIGITIZATION OF ENGINEERING DEPARTMENT DATABASE. PLANNING TO PUT ALL TECHNICAL INFORMATION DIGITALLY ON THE SYSTEM.

9TH A330-300 DELIVERY.

OCTOBER 1996: CHINA NOW ALLOWS CATHAY PACIFIC (CAT) TO OVERFLY PARTS OF CHINA, PREVIOUSLY RESTRICTED (SIGNIFICANTLY REDUCES FUEL BURN & OPERATIONS COSTS, HOWEVER, AS A CONCESSION A CHINESE AIRLINE (LATER, CHINA SOUTHERN (GUN) WAS SELECTED), WAS GRANTED FULL 5TH FREEDOM RIGHTS TO PICK UP HONG KONG PASSENGER RIGHTS TO 4 POINTS IN SOUTHEAST ASIA.

(HAECO) FOR LAST 6 MONTHS = +HK$178.8 MILLION/+$27.3 MILLION (-2.6%) (+$28.3 MILLION). (CAT) = +$149 MILLION (+12%).

STARTED EXTENDED TWIN-ENGINE OPERATIONS (ETOPS) SIMULATION FLIGHTS ON THE 777.

(REDARS) INSTALLED.

DEPARTURE OF ROD EDDINGTON, MANAGING DIRECTOR TO ANSETT (ANS). DAVID TURNBULL, DEPUTY MANAGING DIRECTOR CORPORATE DEVELOPMENT WILL BECOME MANAGING DIRECTOR IN DECEMBER 1996.

180 MINUTES (ETOPS) OK FOR 777 TRENT 800.

4TH & LAST 777-200 (WA102) DELIVERY. LAST L-1011 PHASED OUT. +3 ORDERS A340-300'S FOR TOTAL 9 FIRM.

NOVEMBER 1996: AWARDED "TOP ASIA PACIFIC AIRLINE" BY UK "TRAVEL TRADE" GAZETTE. ALSO, AWARDED "BEST AIRLINE BUSINESS CLASS" & "ASIA BEST AIRLINE" BY "ASIA MONEY" MAGAZINE.

CONSTRUCTION STARTS ON NEW CATHAY PACIFIC (CAT) HQ AT CHEK LAP KOK (CLK) AIRPORT, TO BE COMPLETED IN 1 YEAR.

SMALL AIRPLANE STUDY, INCLUDING 757 FOR NEW ROUTES (CAT) MAY RECEIVE.

B LAM, REPLACED J CHI, GENERAL MANAGER LINE MAINTENANCE. MR LI REPLACES H K LEE AS INTERIOR MAINTENANCE MANAGER.

DECEMBER 1996: 5TH A340-300E DELIVERY (RETURNED LAST A340-200).

JANUARY 1997: 1 A340-300X (CFM56-5C4) DELIVERY.

FEBRUARY 1997: 1996 = 25.71 BILLION (RPK) TRAFFIC (#17 HIGHEST IN WORLD).

+1 ORDER A330-300 FOR TOTAL 13, 11 DELIVERED, & +2 A340-300'S FOR TOTAL 11, 7 DELIVERED, TO MAKE (CAT) THE LARGEST OPERATOR OF BOTH TYPES.

MARCH 1997: FISCAL YEAR (FY) 1996 = +$488M (+27.9%), INCLUDING +$69.5 FROM SALE OF ITS SHARES IN DRAGONAIR (DRG).

APRIL 1997: 777 (TRENT 800) (ETOPS) HALTED, UNTIL (AD) ACCOMPLISHED FOR REDESIGNED ENGINE PARTS, DUE TO 10 OIL LOSS, & 1 BEARING FAILURE INCIDENTS.

AWARDED 2ND, TO SINGAPORE (SIA), IN ZAGAT'S "FREQUENT FLYER" SURVEY BASED ON COMFORT, SERVICES, TIMELINESS, & FOOD OF 61 AIRLINES -STATED "CATHAY MAKES A LONG FLIGHT OVER PACIFIC PASS QUICKLY."

MAY 1997: PROBLEMS WITH (RR) (TRENT 700) ENGINES, GROUNDS 11 A330-300'S FOR 3 WEEKS.

JUNE 1997: A330-300'S RETURNED TO SERVICE, AFTER 10 DAYS ON GROUND = -$15.5 - 19.5M. (CAT) TO BILL (RR).

JULY 1997: MOVE TO NEW CHEP LAP KOK (CLK) AIRPORT, IS TO COST $1B, WITH $450M, 775,000 SQ FT HQ, AND A 250,000 SQ FT STAFF HOTEL.

747-267B (22149) IN SPECIAL "SPIRIT OF HONG KONG 97" LIVERY, DEPICTION OF THE CITY'S SKYLINE, & CHINESE SYMBOL FOR "HOME." CONFIGURATION IS 2 CLASS, 69C, 336Y.

AUGUST 1997: 2ND Q = +$137M. 6 MONTHS = +$130M (-3.4%). (HAECO) = +HK$23M.

DEREK GRIDLAND, DEPUTY ENGINEERING DIRECTOR.

RECEIVES 120 MINUTES (ETOPS) APPROVAL FOR 777.

SEPTEMBER 1997: 1ST 737-300 ROLL-OUT, AT BOEING EVERETT, WITH 1ST
FLIGHT ON 10/97 (TRENT 892, 75-92K LBS THRUST ENGINES), (RR) HAS >33%
OF WORLD AIRLINES' ENGINES. IS 33 FEET LONGER THAN 777-200, AND 10 FEET 6 INS LONGER, THAN 747-400.

OCTOBER 1997: DECLINE IN TOURISM OCCURS, DUE TO CHINESE TAKEOVER OF HONG KONG. LOAD FACTOR -12%, CARGO -89%.

15,757 EMPLOYEES.

120 MINUTES (ETOPS) A330 AND 777 (TYPICAL (HKG)-(BAH)/(DXB), LATER: (HKG)-/(CNC)/(BNE), (BKK)-(CMB).

1ST 9 MONTHS = 29.78B RPK (15TH HIGHEST IN WORLD).

NOVEMBER 1997: 2ND 777-300, DISPLAYED AT DUBAI AIR SHOW.

SIGNED UP WITH SITA FOR SECURE, GLOBAL INTRANET, COVERING 80 COUNTRIES.

DECEMBER 1997: DUE TO SEVERE DOWNTURN OF ASIAN ECONOMY, CANCELS ALL FUTURE AIRPLANE OPTIONS WITH BOEING AND AIRBUS, AND PUT FUTURE PURCHASES ON HOLD. POSSIBLE DELAY OF OPENING OF CHEP LAP KOK (CLK) AIRPORT. PLANS TO AXE 15% OF GROUND STAFF, & DISPOSE OF 7 747-200'S, BY 4/98.

JANUARY 1998: ANDREW HOAD, DIRECTOR OPERATIONS (HAECO); CHRISTOPHER GIBBS, GENERAL MANAGER ENGINEERING; MARK HAYMAN, GENERAL MANAGER, ENGINEERING PLANNING & SUPPLIES. DEREK CRIDLAND TO BE ENGINEERING DIRECTOR, WHEN ROLAND FAIRFIELD RETIRES, IN 4/98.

INTRODUCES ELECTRONIC E-TICKETING, FOR (HGK)-(SIN) (1ST OUTSIDE OF USA).

LAYS OFF 800 GROUND STAFF. CHEK LAP KOK (CLK) AIRPORT, WHICH IS SCHEDULED FOR OPENING IN 7/98, WILL HAVE +20% FEES HIGHER THAN KAI TAK AIRPORT.

JOEY LO, (PPC) MANAGER (BASE MAINTENANCE) (HAECO), EX-AIR HONG KONG (AHK). IAN KILPATRICK, MANAGER, MAINTENANCE CONTROL RESIGNS (4/98).

FEBRUARY 1998: PASSENGER DECLINE CONTINUES -25%, DUE TO ASIAN CURRENCIES COLLAPSE, MARKET CRISIS, SMOG IN INDONESIA, & MALAYSIA (FROM FOREST FIRES), AND HONG KONG ASIAN FLU DEATHS.

STEVE CHADWICK, MANAGER ENGINEERING.

7TH A340-300 DELIVERY.

MARCH 1998: IN 7/98, NEW ROUTE TO ISTANBUL.

1997 = +$217M (-55%), DUE TO DOWNTURN IN TOURISM: 68.2% LF (-5.8).

AFTER -760 (-5%) LAYOFFS, NOW 15,040 EMPLOYEES.

TO REMOVE 5 747'S FROM SERVICE. 8TH A340-300 DELIVERY.

APRIL 1998: DEREK CRIDLAND, ENGINEERING DIRECTOR, REPLACES ROLAND
FAIRFIELD, WHO RETIRED.

(http://www.cathay-pacific.com).

APPLIED FOR 138 MINUTES (ETOPS) FOR 777. HOPES FOR 180 MINUTES (ETOPS) IN 8/98. 1ST DEMO FLIGHT, NY-HONG KONG, OVER-THE-POLE SERVICE, IN 7/98 TO COINCIDE WITH OPENING OF NEW HONG KONG INTERNATIONAL AIRPORT (CLK). COMPARES TO >20 HOURS 1-STOP, VIA VANCOUVER.

13,857 EMPLOYEES.

MAY 1998: ROB SAUNDERS, REPLACES IAN KILPATRICK, MAINTENANCE CONTROL
MANAGER. ROB WALES, REPLACES DERRICK SMITH, QA MANAGER. P K CHAN, REPLACES KEITH LAW, DIRECTOR ENGINEERING. JOHN SLOSAR TO LEAVE (HAECO) IN JUNE/JULY, & BE REPLACED BY P K CHAN, AS MANAGING DIRECTOR.

CHEP LAP KOK (CLK) TO ISTANBUL (48TH DESTINATION) (A340-300, 12F, 40C, 197Y).

777-300 DELIVERY.

JUNE 1998: PETER SUTCH, CHAIRMAN, IS TO ACCEPT A POSITION ON THE SWIRE BOARD IN 6/99, AND BE REPLACED BY JAMES HUGHES-HALLETT. DAVID TURNBULL, DEPUTY CHAIRMAN, AND CEO.

NONSTOP TO (SFO) (A340-300, 12F, 40C, 197Y). POLAR NONSTOP TO NY (747-400), 15 HOURS 30 MINUTES, COMPARED TO >20 HOURS 1-STOP, VIA VANCOUVER.

TAXI (CAB) FROM CHEK LAP KOK (CLK), TO HONG KONG, WILL TAKE > 1 HOUR. EXPRESS TRAIN WILL TAKE 30 MINUTES.

2ND 777-300 AND 9TH A340-313X DELIVERIES. 2 747-200'S (22782, 3048) LEASED TO VIRGIN ATLANTIC (VAA), FOR 5 YEARS (HEAVY MAINTENANCE AT TAECO BEFORE 1ST DELIVERY IN 10/98).

JULY 1998: (MOU) CODE SHARE WITH SWISSAIR (SWS), TO ZURICH.

P K CHAN, MANAGING DIRECTOR, HAECO, REPLACES JOHN SLOSAR.

PROBLEMS WITH NEW COMPUTER, CARGO TRACKING SYSTEM, AT (CLK) AIRPORT, HAS BROUGHT CARGO THROUGHPUT, TO A STANDSTILL. TEMPORARILY BEING ROUTED, BACK THROUGH OLD CARGO CENTER, AT KAI TAK AIRPORT.

OFFICIAL OPENING OF CHEP LAP KOK (CLK) AIRPORT TAKES PLACE, REPLACING 73 YEAR-OLD KAI TAK AIRPORT, AT KOWLOON. APPROX 30 AIRPLANES, 1,300 VEHICLES, & 16 BARGES OF EQUIPT, WERE MOVED OVERNIGHT, TO NEW $20B AIRPORT. INITIAL CAPACITY IS 35 MILLION PAX/3 MILLION TONS OF CARGO/YEAR, WITH CAPABILITIES TO GROW TO 87 MILLION PAX/9 MILLION TONS OF CARGO/YEAR.

1997 TOP WORLD AIRLINES COMPARISONS:
NET ($M): 13 ACN 308 (109); 14 KLM 303 (-33); 15 SAS 283 (265); 16 ALI 256 (-780); 17 CINTRA 244 (273); 18 SWS 223 (-402); 19 CAT 219 (493); 20 QAN 198 (186); 21 GUN 137 (87).

RPK (B): 11 QAN 59; 12 KLM 55; 13 SIA 55; 14 ANA 51; 15 SWA 46; 16 TWA 41; 17 KAL 40; 18 CAT 39; 19 ACN 37; 20 ALI 36.

FTK (B): 1 FED 9.3; 2 GRC 6.5; 3 KAL 5.7; 4 UPS 5.4; 5 AFA 5.0; 6 SIA 4.8; 7 JAL 4.2; 8 BAB 3.9; 9 KLM 3.9; 10 CAT 3.6.

120 MINUTES (ETOPS) FLIGHTS/MONTH (TOTAL): 6 777'S = 36 (370) ASIA.

10TH A340-300E DELIVERY.

AUGUST 1998: TO (SFO) IN 12/98 (3RD US CITY DESTINATION) (A340-300, 12F, 40C, 197Y). ALREADY SERVES (LAX), & NY.

1ST 6 MONTHS = -$22.6 MILLION (DUE TO ASIA'S ECONOMIC DOWNTURN & WEAK REGIONAL CURRENCIES): +2.7% ASK, 66.5% LF (-4.7).

ENTIRE NETWORK IS NOW "NON-SMOKING" FLIGHTS.

IS LEASING OUT OR MOTHBALLING ITS 7 747-200'S. 11TH A340-300E DELIVERY.

SEPTEMBER 1998: NEW GLOBAL ALLIANCE WITH AMERICAN (AAL), CANADIAN (CDI), BRITISH (BAB) AND QANTAS (QAN), NAMED "ONEWORLD." (http://www.oneworldalliance.com). NEW MEMBERS MAY BE IBERIA (IBE), DRAGONAIR (DRG), FINNAIR (FIN), AND JAPAN AIRLINES (JAL). ONEWORLD WEBSITE STATES (CAT): 14,800 EMPLOYEES, 47 DESTINATIONS IN 25 COUNTRIES, 10M PASSENGERS/YEAR, 62 AIRPLANES, 145K CARGO TONS/YEAR.

BASES 5 A330'S IN MANILA, TO OPERATE DOMESTICALLY IN PHILIPPINES, AT GOVT REQUEST, FOLLOWING COLLAPSE OF PHILIPPINE AIRLINES (PAL). LOCAL AIRLINES: AIR PHILIPPINES (PHP) AND CEBU PACIFIC AIR (CEB), HAVE PROTESTED.

3 747-200'S (RB211-524) (21746; 21966; 22429), STORED AT VICTORVILLE, CA. 3RD 777-367 (102-27506) DELIVERY (TRENT 892B).

OCTOBER 1998: REGULATORY AUTHORITY (HKCAD) DENIES (CAT) 777 180 MINUTES (ETOPS).

NEGOTIATIONS FOR POSSIBLE 40% STAKE IN PHILIPPINE AIRLINES (PAL). (PAL) NOW HAS $2B DEBTS.

NEW ALLIANCE WITH JAPAN AIRLINES (JAL), INCLUDING CODE SHARE TO JAPANESE REGIONAL CITIES. (JAL) & (CAT) EACH OWN 10% OF TAECO, XIAMEN, MAINTENANCE OVHL BASE.

1ST 6 MONTHS = -$22.5M: 19.24B RPK (-4%), 1.63B FTK (-2.6%), 4.96M PAX
(-4.7%).

7 777'S, 120 MINUTES (ETOPS) OVER ASIA FLIGHTS/MONTH (TOTAL FLIGHTS) = 33 (471).

5 A330-300'S, 301Y PAX, FOR PHILIPPINE CHARTER SERVICE, OPERATE 4 FLIGHTS/DAY, MANILA-CEBU, & 2 MANILA-DAVAO. 12TH A330-300 DELIVERY.

NOVEMBER 1998: A330-343 (244) DELIVERY. 747-267B (531-22530)
SOLD TO AIR ATLANTA ICELANDIC (AID).

DECEMBER 1998: (HAECO) LAYS OFF -350 (-8%) OF 4,536 EMPLOYEES.

LAUNCH OF ROUTE TO (SFO) (A340-300) HAS 86.7% LF.

JANUARY 1999: 4 EXECUTIVES LEAVE (CAT) TO JOIN PHILIPPINE (PAL): PETER FOSTER, GENERAL MANAGER TAIWAN & PHILIPPINES; ANDREW FYFE, COUNTRY MANAGER - AUSTRIA, GERMANY & SCANDINAVIA; RICHARD WALD, STATION MAINTENANCE MANAGER PARIS; & IKE SCANTLEBURY, FINANCIAL DIRECTOR FOR SWIRE.

14,000 EMPLOYEES (INCLUDING 1,300 FLIGHT CREW (FC) & 5,500 CABIN ATTENDANTS (CA).

747-267B (493-22429) LEASED TO AIR ATLANTA ICELANDIC (AID).

FEBRUARY 1999: 1998 = -$70 MILLION (1ST DEFICIT SINCE /63): 67.5% LF (-.7).

COST $100 MILLION TO MOVE TO NEW AIRPORT.

MARCH 1999: 15 YEAR MAINTENANCE CONTRACT TO SWISSAIR TECHNICS (SWS) FOR 11 A340'S (CFM56-5C4) ENGINES (20 SHOP VISITS/YEAR).

REJECTS BOEING'S PORTABLE MAINTENANCE AID (PMA) FOR 747 & 777.

RECEIVES 180 MINUTES (ETOPS) APPROVAL FOR 777'S. 777-300'S ARE CURRENTLY NOT FLYING (ETOPS) ROUTES.

NEW POLAR ROUTE OVER RUSSIA REDUCES FLYING TIME TO NEW YORK FROM 21 HOURS TO 15 HOURS. NOW FLIES TO 40 CITIES IN NEARLY 30 COUNTRIES.

(HAECO) 1998 = +$34.5 MILLION HK (+$171.9 MILLION HK).

13,900 EMPLOYEES.

CURRENT OWNERSHIP: SWIRE PACIFIC 43.9%, CHINA INTERNATIONAL TRUST & INVEST CORP 25%; OTHERS INCLUDE (CNAC) & CHINA TRAVEL SERVICE 31.1%. OWNS 75% AIR HONG KONG (AHK), & 17.8% DRAGONAIR (DRG).

(LOI) FOR LEASE OF 5 747-300'S TO PAKISTAN INTERNATIONAL (PIA), 2 YEARS, (23221; 23392; 23534; 23709; 23920). 6TH (24215) ALSO FOR SALE/LEASE. 777-367 (204-27508, B-HNI) DELIVERY. IN /99, WILL RECEIVE 10 NEW AIRPLANES, INCLUDING 3 777-300'S.

APRIL 1999: 15,747 EMPLOYEES.

(http://www.cathaypacific.com).

1ST 3 747-300'S (B-HIK; B-HIJ; B-HOL) TO PAKISTAN INTERNATIONAL (PIA).

MAY 1999: CODE SHARE WITH JAPAN AIRLINES (JAL) TO OSAKA, AND NAGOYA. LONG TERM PARTNERSHIP WITH SOUTH AFRICAN AIRWAYS (SAA), INCLUDING CODE SHARE.

"TRAVEL TRADE" GAZETTE NAMES (CAT) "BEST AIRLINE - BUSINESS CLASS." (2ND YEAR).

JUNE 1999: SIGNIFICANT FLIGHT CANCELLATIONS, DUE TO PILOT UNREST FROM PROPOSAL TO CUT PAY. 2 WEEK "SICKOUT" BY PILOTS = -$64.5 MILLION.

CHINA SOUTHWEST (XIN) TO WET-LEASE 3 757-200'S, & 2 A340'S, + CHINA SOUTHERN (GUN) TO WET-LEASE 1 777-200, TO (CAT), FOR CHARTER OPERATIONS.

TO MUMBAI (777-200/-300).

PETER SUTCH, CHAIRMAN, WHO WAS BORN IN TURKEY, HAS "HOSCAKAL" (TURKISH FOR "GOODBYE AND STAY WELL") AS HE MOVES TO LONDON, TO JOIN BOARD OF JOHN SWIRE & SONS, BEING REPLACED BY JAMES HUGHES-HALLETT.

747-200B (B-HKG) SCRAPPED AND PARTED OUT. 2 747-200B'S (B-HIC) (TF-ABP), & B-HID (TF-ABA), LEASED TO AIR ATLANTA ICELANDIC (AID), & WET-LEASED TO IBERIA (IBE). 2 747-200B'S (B-HIA, B) PLACED IN STORAGE. 6TH 777-367 (B-HNJ) DELIVERY.

1998 TOP WORLD AIRLINES - TRAFFIC RPM (B):
11 SIA 35.88; 12 KLM 35.59; 13 QAN 35.22; 14 ANA 33.38; 15 SWA 31.43; 16 CAT 25.26; 17 TWA 24.42; 18 ACN 23.21; 19 ALI 22.10; 20 TII 21.34; 21 IBE 20.19; 22 KAL 19.95.

JULY 1999: 1 747-200F, ATLAS (TLS) SHORT TERM WET-LEASE. 2 747-200B'S, (B-HIE) (G-VCAT) & (B-HIF) (G-VRUM), LEASED TO VIRGIN ATLANTIC (VAA). 5 747-300'S, (B-HII) (AP-BFW), (B-HIJ) (AP-BFU), (B-HIK) (AP-BFV), (B-HOL) (AP-BFX), & (B-HOM) (AP-BFY), LEASED TO PAKISTAN INTERNATIONAL (PIA). POSSIBLY ALSO (B-HON).

AUGUST 1999: 1ST 6 MONTHS = +$13.9 MILLION (-$22.4 MILLION), FROM COST CUT METHODS OF WORKING LONGER HOURS AND RETIREMENT OF OLDER 747S.

HONG KONG ECONOMY POSTED A SURPRISE, 2ND Q EXPANSION, WITH A +.5% (GDP), WHICH ON A SEASONAL, ADJUSTED BASIS, REPRESENTS A GROWTH OF +3%, AFTER PREDICTIONS OF A FURTHER -1 TO -2% DROP, SIGNALS THAT ASIA IS RECOVERING FROM THE FINANCIAL CRISIS, WITH MORE CONSUMER SPENDING.

SEPTEMBER 1999: 15-YEAR OLD, HONG KONG GIRL, HAS WINNING DESIGN
FOR "SPIRIT OF HONG KONG INTO THE NEW MILLENNIUM" SHOWING A YOUNG ATHLETE OVERCOMING A SERIES OF OBSTACLES, TO ACHIEVE HIS GOAL. LIVERY TO BE PAINTED ON 747-467, TO CONVEY THE "LEGENDARY RESILIENCE OF THE HONG KONG PEOPLE."

IN 10/99, CODE SHARE WITH CANADIAN (CDI), TO VANCOUVER, & TORONTO.

777-367ER (TRENT 892-17) (248-27510, B-HNK) DELIVERY.

OCTOBER 1999: HIGHLY RESPECTED "CONDE NAST TRAVELER" MAGAZINE
NAMES (CAT) "BEST LONG HAUL AIRLINE FOR BUSINESS TRAVELERS!"

1ST 9 MONTHS = 30.61B RPK (+1.3%), 2.68B FTK (+13.6%), 7.73M PAX (+.5%). 1998 = 25.26B RPM (+4.4%), 4.93B FTM (-1.6%).

TOTAL 180 MINUTES (ETOPS) ASIA FLIGHTS (FLIGHTS/MONTH): 11 777'S, 863 (31).

AS PART OF A330/A340 "GET WELL" PROGRAM (498 SB'S), (CAT) IS TO
LEASE 3 A340'S FROM AIR CHINA (BEJ) FOR 2 YEARS TO COVER FOR AIRPLANE
OUT-OF-SERVICE FOR MAINTENANCE. 2 ORDERS (9/00) 747-400F'S.

NOVEMBER 1999: 1998 = -$70 MILLION (+$217 MILLION).

TO OSAKA, SEOUL, AND ZURICH.

A340-313 (192, B-HMZ), AIR CHINA (BEJ) LEASED.

DECEMBER 1999: OPENS ITS NEW HK$4.9 BILLION CORPORATE HQ, CALLED "CATHAY PACIFIC CITY" AT HONG KONG AIRPORT FOR 3,000 STAFF, INCLUDING 3, 9-FLOOR OFFICE TOWERS, 1 FLIGHT TRAINING CENTER, 1 3-FLOOR LEISURE CENTER, 1 STAFF HOTEL, FOOD COURT, & OTHER STAFF AMENITIES.

CASEY KELLEY, GENERAL MANAGER CATHAY PACIFIC, AIRCRAFT TRADING LTD
(CPATL), FOR AIRPLANE ACQUISITION & DISPOSAL.

(HAECO) LAYS OFF -166 EMPLOYEES.

PARTNERSHIP WITH (DHL) WORLDWIDE EXPRESS, FOR (DHL) TO MOVE ITS ASIAN OPERATIONS TO HONG KONG, & INCLUDE (CAT) PASSENGER & CARGO FLIGHTS, OSAKA, SEOUL, SINGAPORE, AND TAIPEI.

TO MELBOURNE (777).

2 747-267B'S (RB211-524) (21966; 22149), 2-YEAR LEASED TO AIR ATLANTA ICELANDIC (AID), NOW TOTAL 4 LEASED TO (AID). +3 ORDERS (1/01)
A330-300'S (233 TON (MTOW).

FEBRUARY 2000: 14,000 EMPLOYEE.

+1 A340-300, (ILF) 5 YEAR LEASED.

MARCH 2000: DIETER KLEINEN, LINE MAINTENANCE MANAGER (HAECO), EX-SOUTH AFRICAN (SAA).

1999 = +$280.89 MILLION (-$69.48 MILLION): CARGO +20.6% (29% TOTAL REVENUE) AIDED BY ASIAN RECOVERY, AND DROPPING OF LANDING FEES, AT HONK KONG AIRPORT.

APRIL 2000: IN 9/00, CARGO FLIGHTS TO (SFO).

SIGNS WITH "PRIMEX" FOR LAUNCH AIRLINE OF NEW EMPORT, DATA SYSTEM, ON FLEET OF 56 AIRPLANES. ENABLES PASSENGERS TO USE THE LAPTOP, OR NOTEBOOK COMPUTERS TO ACCESS E-MAIL, INFLIGHT, AS WELL AS ON BOARD INTRANET, USING (CAT)'S EXISTING, SATELLITE COMMUNICATION SYSTEM, ON (CAT)'S NETWORK. ALLOWS >200 PASSENGERS TO USE THE SYSTEM SIMULTANEOUSLY, AND IT OPERATES INDEPENDENTLY OF IN-FLIGHT ENTERTAINENT SYSTEM. SITA IS THE SERVICE PROVIDER FOR AIR-TO-GROUND, (SATCOM), DATA CONNECTION, USING INMARSAT SATELLITES.

(CAT)'S BID TO TAKE 5-10% STAKE, IN CHINA EASTERN (CEA), IS REJECTED.

13,971 EMPLOYEES (INCLUDING 1,500 FC, & 5,500 CA).

1 ORDER (1/01) 777-200 (TRENT 800) (DEVELOPMENT AIRPLANE).

MAY 2000: NONSTOP TO TORONTO, OVER NORTHERN POLAR ROUTE (A340-300) SAVED 3 HOURS OFF PREVIOUS ROUTE, WITH 14 HOURS 59 MINUTES FOR 7,221 NM, WITH 16/127 PASSENGERS.

747-367B (709-24215, /88 31 12, B-HON) (RB211-524BC), RETIRED AT
VICTORVILLE, CALIFORNIA. 1 ORDER (4/01) 747-400F, & 4 ORDERS (6/01) A330-300'S. +3 ORDERS A330-300'S, LEASED, EX-(KAL).

JUNE 2000: ONEWORLD NOW: (AAL), (BAB), (CAT), (FIN), (IBE), (QAN), (ARL), AND (LAN) = 559 DESTINATIONS, 1,852 AIRPLANES.

ANDREW HOAD, LEAVES (HAECO) TO BECOME GROUP QUALITY & ENGINEERING MANAGER AT FLS AEROSPACE (ATD).

JULY 2000: 1ST 5 MONTHS = +11% RPK, +.2% ASK, 75.3% LF (+7.3).

1999 TOP WORLD AIRLINES COMPARISON:
TRAFFIC RPK (B): 15 ANA 56.7; 16 TWA 41.9; 17 CAT 41.5; 18 ACN 39; 19 TII 38.5; 20 ALI 36.7.

NET PROFIT ($M): 10 KLM 324; 11 NWA 300; 12 CAT 282; 13 QAN 279; 14 USA 273; 15 KAL 226; 16 SAS 217; 17 AMW 201.

FTK (B): 1 FED 10.31; 2 LUB 7.07; 3 UPS 6.02; 4 KAL 5.96; 5 SIA 5.48;
6 AFA 4.73; 7 BAB 4.54; 8 JAL 4.42; 9 KLM 4.15; 10 CAT 3.77; 11 UAL 3.58; 12 CHI 3.38; 13 CLX 3.25; 14 EVA 3.15.

1999 = +$281.98M (-$69.76M): 41.5B RPK (+2%); 3.77B FTK (+14.3%); 10.52M PAX (+2.1%); 13,224 EMPLOYEES.

AUGUST 2000: CODE SHARE WITH MALAYSIA (MAS), TO KUALA LUMPUR
AND PENANG, STARTING IN 9/00. IN 9/00, TO KARACHI (A330, 3/WEEK), VIA
BANGKOK. IN 9/00, FREIGHTER SERVICE, TO NEW DELHI, PENANG, AND (SFO), TO INCREASE 747F DESTINATIONS TO 19.

1ST 6 MONTHS = +$280 MILLION (+$14 MILLION): 75.7% LF (+8.6).

JOINS E-COMMERCE VENTURE, CALLED "AEROEXCHANGE" FOR AIRPLANE PARTS, MAINTENANCE SERVICES, & GENERAL SUPPLIES, WITH 12 OTHER AIRLINES: (DLH); (SIA); (FED); (NWA); (ACN); (ANA); (AMW); (SAS); (KLM); (AUL), & (ANZ).

(http://www.cathaypacific.com).

(HAECO) 1ST 6 MONTHS = +$34 MILLION (+$8 MILLION). 1ST 6 MONTHS (CAT) = 5.8 MILLION PAX (+17%); 22.58B RPK (+16.9%); 1.88 BILLION FTK (+9.4%).

SEPTEMBER 2000: CARGO HANDLING COSTS OF 1 KG OF CARGO, IS $0.256 AT HONG KONG, WHEREAS AT SHENZHEN, IT IS ONLY $0.045.

1 747-467F DELIVERY.

OCTOBER 2000: CODE SHARE WITH TURKISH (THY), TO ISTANBUL (A340-300).

BY 2003, PLANS TO INVEST HK$2B IN E-BUSINESS TO REDUCE COSTS BY
>HK$500 MILLION/YEAR, BY PARTICIPATING IN AEROEXCHANGE, & DOING 35-50% OF PURCHASING VIA INTERNET.

1ST 9 MONTHS = +15.2% RPK, +5.4% ASK, 77.4% LF (+6.6), 8.9 MILLION PAX (+15.5%).

1ST 6 MONTHS WORLD AIRLINES TRAFFIC - RPK (BILLION):
1 UAL 100.3 2 AAL 92.41; 3 DAL 89.82; 4 NWA 62.13; 5 CAL 60.38; 6 USA
35.07; 7 SIA 33.79; 8 SWA 32.84; 9 KLM 28.94; 10 CAT 22.58; 11 TWA 21.26; 12 ACN 20.96; 13 KAL 19.47; 14 IBE 18.77.

1 747-230F (CF6-50E2), SOUTHERN (SOF) WET-LEASED. 3 ORDERS
(9/02) A340-600'S, (ILF) LEASED.

NOVEMBER 2000: SUCCESSFUL DEMO WITH INTERNET FIRM, TENZING
COMMUNICATIONS, OF IN-FLIGHT E-MAIL, & INTERNET USE ON A 747. TEXT
MESSAGES, AND A DIGITAL PHOTOS WERE TRANSMITTED BETWEEN HONG KONG, AND SEOUL. (CAT) WILL INSTALL THE "PRIMEX" EMPORT, BROADBAND, HIGH SPEED NETWORK ON ITS AIRPLANES, USING A STANDARD (USB) CONNECTION.

DECEMBER 2000: 1ST 9 MONTHS = 35.26 BILLION RPK (+15.2%), 2.97 BILLION FTK (+9.7%), 8.92 MILLION PAX (+15.5%).

777-267 (1-27116, B-HNL) (RR TRENT) DELIVERY.

TOP WORLD AIRLINES 1ST 9 MONTHS - TRAFFIC RPK (BILLION):
9 SIA 52.77; 10 SWA 50.48; 11 QAN 49.28; 12 KLM 45.91; 13 CAT 35.26; 14 TWA 33.56; 15 TII 31.26.

(HAECO)'S 50-YEAR ANNIVERSARY! (HAECO) NOW HAS 3,600 EMPLOYEES.

JANUARY 2001: 2000 = +13.6% RPK, +6.5% ASK, 12 MILLION PAX (+12.8%) RECORD!

TOP WORLD AIRLINES 2000 - TRAFFIC RPM (BILLION):
14 QAN 39.46; 15 KLM 37.49; 16 ANA 36.07; 17 CAT 29.27; 18 TII 26.25; 19 ALI 25.24; 20 KAL 25.15; 21 IBE 24.87; 22 MAS 23.58.

1 A340-313X (381, B-HXL), (ILF) LEASED (CFM56-5C4).

FEBRUARY 2001: (CAT) SUBSIDIARY, TAIKOO AVIATION TECHNOLOGIES INVESTED $10 MILLION IN TENZING COMMUNICATIONS, SEATTLE, FOR FULL DEPLOYMENT OF THE IN-FLIGHT, INTERNET SYSTEM, BY 3RD Q /01.

IN 3/01, TO DELHI (A330-300, 4/WEEK, NONSTOPS).

SIGNS WITH "NETDIMENSIONS" TO USE ITS ENTERPRISE KNOWLEDGE PLATFORM (EKP), FOR (CAT)'S GLOBAL, "E-LEARNING NETWORK," FOR 14,000 EMPLOYEES IN 29 COUNTRIES, TO USE (EKP) FOR COURSES ON TOPICS RANGING FROM CUSTOMER SERVICE, TO MANAGEMENT SKILLS.

2 A330-342'S (386, B-HXM; 389, B-HXN) DELIVERIES.

MARCH 2001: CODE SHARE WITH AIR MAURITIUS, TO MAURITIUS. TO DELHI (A330, 4/WEEK).

2000 = 47.15 BILLION RPK (+13.6%), 4.16 BILLION (+9%), 11.86 MILLION PAX (+12.8%), +$642 MILLION (+130%)! +20.8% FTK, WITH CARGO 29.4% OF TOTAL REVENUE.

HAECO RECEIVES 1ST OF 3 747-236BC'S, TO CONVERT TO SPECIAL FREIGHTERS, FOR STUART JOHN, EX-(CAT) ENGINEERING DIRECTOR, WHO WILL LEASE THEM OUT. STUART JOHN HAS "1ST RIGHT OF REFUSAL" ON REMAINING 14 EX-(BAB) 747-200'S.

1 A330-342 (393, B-HLO) DELIVERY. +1 ORDER (10/01) A330-300. 3 ORDERS (4/01) A340-313X'S, EX-SINGAPORE (SIA), BOEING (TBC) 5 YEAR LEASED, TO REPLACE 3 LEASED FROM AIR CHINA (BEJ). IN /01, TO TAKE DELIVERY OF 2 747-400F'S, 11 A330'S & 1 A340.

APRIL 2001: 13,159 EMPLOYEES.

USES ORACLE'S INTERNET PROCUREMENT SOFTWARE TO ALLOW DIRECT CONNECTION WITH ITS SUPPLIERS, VIA THE INTERNET. THE "CXEBUY" SERVICE SHOULD SAVE (CAT) $40 MILLION BY 2003, AND ALLOW 50% OF ITS PURCHASING, VIA THE INTERNET, WITHIN 3 YEARS.

1 747-467F (1271-32571, B-HUO) DELIVERY.

MAY 2001: LAUNCHES ITS DOWNLOADABLE, TRIP PLANNER, FOR OWNERS OF PERSONAL DIGITAL ASSISTANTS, AND INTERNET-ENABLED PHONES. USING FREE SOFTWARE FROM "AVANTGO INC," WHERE USERS CAN ACCESS THE COMPLETE (CAT) FLIGHT SCHEDULE, FLIGHT PAGING SERVICE, FREQUENT FLYER ACCOUNT BALANCES, & (CAT)'S WORLDWIDE, CONTACT INFO. UPDATED IN MIDDLE OF EVERY MONTH, TO REFLECT SCHEDULE CHANGES, NEW TELEPHONE NUMBERS, & ADDITIONAL SERVICE INFO.

IN 9/01, TO (JFK) (A340-300, DAILY NONSTOP).

JUNE 2001: 1 A340-313X (123, B-HXM), EX-SINGAPORE (SIA) DELIVERY.

JULY 2001: FIRES 52 PILOTS, AND CUTS OPERATIONS BY 20%.

A340-313X (126, B-HXN) DELIVERY.

AUGUST 2001: 1ST 6 MONTHS = +$169 MILLION (-40%): +2.3% RPK, +8.6% ASK, 71.9% LF (-3.8), DUE TO SEVERE ECONOMIC SLOWDOWN IN USA AND JAPAN, +17.7% FUEL COSTS, +$58 MILLION FROM SALES OF EQUANT SHARES.

CHAN PING KIT, DEPUTY CHAIRMAN & (CEO) (HAECO).

5TH 747-467F (1282-30805, B-HUP) & 2 A330-343X'S (418, B-HLP; 420, B-HLQ) DELIVERIES.

SEPTEMBER 2001: IN 10/01, TO RIYADH (777-200, 2/WEEK).

CHRIS GIBBS, GENERAL MANAGER ENGINEERING COMMERCIAL, REPLACES MARK HAYMAN, NOW (HAECO) DIRECTOR ENGINEERING, WHO REPLACED DAVID LAW, WHO IS RETIRING. STEVE CHADWICK, GENERAL MANAGER ENGINEERING TECHNICAL, REPLACING CHRIS GIBBS.

14,694 EMPLOYEES.

A330-343X (421, B-HLR) DELIVERY.

OCTOBER 2001: IN 12/01, TO SAPPORO, JAPAN (A330-300, 2/WEEK). TO RIYADH, VIA BAHRAIN (777-200).

1ST 2 A340-300'S OF 3 (123; 126; 128), EX-SINGAPORE (SIA), BOEING (TBC) LEASED. 1 A330-343X (423, B-HLS) DELIVERY. A340-313X (201, B-2387) RETURNED TO AIR CHINA (BEJ).

TOP WORLD AIRLINES 1ST 9 MONTHS TRAFFIC RPK (B):
12 SIA 53.02; 13 ACN 52.85; 14 KLM 45.30; 15 CAT 34.34; 16 MAS 27.98; 17 ALI 27.92; 18 KAL 27.24; 19 AMW 24.20; 20 VAR 19.81.

NOVEMBER 2001: OPENS DEDICATED CARGO TERMINAL AT LONDON HEATHROW. THE 3RD OF ITS TYPE, AFTER TOKYO, AND PARIS.

CODE SHARE WITH PHILIPPINE AIRLINES (PAL), TO CEBU (A340-300). IN 12/01, TO SAPPORO (A330, 2/WEEK).

A330-343X (439, B-HLT) DELIVERY.

DECEMBER 2001: 2 A340-313X'S (160; 218) STORED AT AVALON, AUSTRALIA, & 1 A330 DELIVERY.

JANUARY 2002: CODE SHARE WITH BRITISH AIRWAYS (BAB), EXTENDS TO NEWCASTLE, ABERDEEN, STOCKHOLM, HELSINKI, BERLIN, DUSSELDORF, HAMBURG, MUNICH, COLOGNE, STUTTGART, & PRAGUE.

LAST 6 MONTHS = -$84.9 MILLION. 2001 = 44.79 BILLION RPK (-5%); 3.89 MILLION FTK (-5.4%); 11.27 MILLION PAX (-5%).

2001 TOP 50 WORLD AIRLINES - TRAFFIC BILLION RPM
1 UAL 116.60; 2 AAL 106.15; 3 DAL 97.60; 4 NWA 73.11; 5 BAB 64.24; 6 AFA 59.54; 7 CAL 58.76; 8 DLH 56.76; 9 JAL 50.77; 10 USA 45.93; 11 SWA 44.50; 12 SIA 42.76; 13 QAN 42.14; 14 ACN 41.49; 15 KLM 35.76; 16 ANA 33.16; 17 CAT 27.81; 18 TII 27.43; 19 IBE 25.64; 20 KAL 23.73; 21 ALI 22.45; 22 MAS 22.29; 23 AMW 19.06; 24 VAA 17.65; 25 VAR 16.02; 26 CHI 16.00; 27 EAD 14.37; 28 SAS 14.26; 29 ANZ 13.54; 30 SAA 12.70; 31 SVA 12.56; 32 BEJ 12.39; 33 ASA 12.23; 34 JAS 10.06; 35 THY 9.35; 36 AMX 8.51; 37 PAL 8.36; 38 GIA 8.15; 39 CMA 7.99; 40 ELA 7.79; 41 GUL 7.65; 42 PIA 7.24; 43 AIN 7.10; 44 TAP 6.43; 45 EGP 5.53; 46 OLY 5.24; 47 AUL 5.06; 48 FIN 4.93; 49 IND 4.52; 50 CQT 4.51.

PARKS 2 747F'S, 2 747-400'S & 2 A340'S, AT AVALON, AUSTRALIA.

FEBRUARY 2002: ACQUIRES REMAINING 25% OF AIR HONG KONG (AHK) FROM STABILO LTD FOR $25 MILLION. ALREADY CONTROLLED 75% THROUGH ITS SUBSIDIARY, MAPLEBECK LTD.

IN 7/02, NONSTOP, SAME-DAY-ARRIVAL TO LONDON (4/WEEK).

APRIL 2002: 14,293 EMPLOYEES. WILL HIRE +800 STAFF.

2001 = +$87 MILLION/+#HK$312.3 MILLION (-86.9%) (+#HK$5 BILLION). (HAECO) 2001 = +#HK$312.3 MILLION (+#$HK400.7MILLION).

(PH: +852 2747 5000). (FAX: +852 2810 6563).

MAIN BASE: HONK KONG INTERNATIONAL (HKG).

OWNERS/SHAREHOLDERS: SWIRE GROUP (45.11%); CITIC PACIFIC (25.4%).

3 ORDERS 777-300'S (TRENT) AND 3 ORDERS A330-300'S (TRENT) (2/03).

MAY 2002: TO HIRE +1,300 NEW PILOTS (FC) IN NEXT 2 YEARS, +1,000 CABIN ATTENDANTS (CA).

ALONG WITH DRAGONAIR (DRG) & AIR HONG KONG (AHK), SIGNS 4-YEAR CONTRACT WITH (ARINC) FOR DATA LINK SERVICES.

June 2002: 747-400F cargo service to Milan, Italy (2/week).

Henry Chan, Planning Projects Manager.

747-400 (B-HOY) painted with special message and color scheme advertising Hong Kong and commemorating 5 years anniversary of return to China. 747-367 (709-24215) stored at Victorville, California, USA, sold to Pakistan International (PIA).

2001 Top World Airlines by Traffic (RPK Billion):
1 UAL 187.67; 2 AAL 170.88; 3 DAL 163.66; 4 NWA 117.66; 5 BAB 106.27; 6 CAL 98.37; 7 AFA 94.42; 8 DLH 86.70; 9 JAL 84.27; 10 USA 73.93; 11 SWA 71.59; 12 SIA 69.15; 13 QAN 67.89; 14 ACN 67.03; 15 KLM 57.85; 16 ANA 56.90; 17 CAT 44.79; 18 TII 44.04; 19 IBE 41.30; 20 KAL 38.45; 21 MAS 38.31; 22 ALI 36.52; 23 SWS 32.98; 24 TWA 31.85; 25 AMW 30.69.

2001 Top World Cargo Operators Billion FTK:
1 FED 11.05; 2 LUB 7.08; 3 UPS 5.96; 4 SIA 5.88; 5 KAL 5.57; 6 AFA 5.12; 7 KLM 4.64; 8 JAL 4.19; 9 BAB 4.033; 10 CHI 4.030; 11 NCA 3.93; 12 CAT 3.89; 13 CLX 3.77; 14 EVA 3.28; 15 UAL 2.80; 16 NWA 2.79; 17 AAL 2.56; 18 MTH 2.40; 19 AAR 2.38; 20 DAL 2.31; 21 MAS 1.84; 22 SWS 1.79; 23 TII 1.67; 24 QAN 1.57; 25 AHK 1.55.

(CAT) 2001: +$84.23 Million (+$640.64M): 44.79B RPK (-5%); 11.27 Million PAX (-5%); 3.89B FTK (-5.4%); 14,293 EMPLOYEES (-8.6%).

July 2002: Will return all parked airplanes from Avalon, Australia, back to service by 8/02.

(CAT) Cargo takes over Air Hong Kong (AHK) operated service, to Brussels - Manchester.

6 orders A380's, possibly including freighters Airbus (AFIS) or (ILF) leased. To be used for routes to (LAX) and London.

August 2002: (CAT) Cargo to Milan via Delhi and London (2/week).

1st 6 months = +$ HK$1.41 Billion/+$179.5 Million (+7.1%) (+#HK$1.32 Billion): -8.9% ASK; 78.1% LF (+6.2).

747-467 (B-HOY) painted in special Hong Kong markings with "Hong Kong Asia's world city" on forward fuselage (nose).

September 2002: (DRG) is protesting Cathay Pacific (CAT)'s application to serve Beijing, Shanghai, and Xiamen. (DRG) presently holds all 18 of Hong Kong's flight rights into mainland China, and asserts that there is insufficient demand to support an additional carrier.

October 2002: (CAT) sells 30% stake in its freight subsidiary Air Hong Kong (AHK) to (DHL). This will help (DHL) gain a presence in Asia, a market dominated by (UPS) and FedEx (FED).

1st 6 months Top World Airlines Traffic Billion RPK
1 AAL 95.18; 2 UAL 84.56; 3 DAL 74.53; 4 NWA 56.50; 5 BAB 49.30; 6 AFA 48.21; 7 CAL 47.49; 8 DLH 42.06; 9 JAL 39.44; 10 SWA 36.03; 11 SIA 36.00; 12 ACN 33.69; 13 USA 33.06; 14 KLM 27.54; 15 CAT 23.07; 16 IBE 19.53; 17 KAL 16.47; 18 CHI 15.70; 19 AMW 15.20; 20 ALI 14.21; 21 EAD 13.45; 22 VAR 12.68; 23 GUN 12.49; 24 SAS 12.01; 25 BEJ 10.32.

USA and Hong Kong reach an "open skies" agreement, at Chek Lap Kok (CLK), Hong Kong's International airport, which increases 5th-freedom rights for passengers and cargo. (CAT) code share with American (AAL).

(http://www.haeco.com).

November 2002: Cooperation with China Eastern (CEA), Shanghai to Taipei.

1st 9 months = 36.14 Billion RPK (+5.2%); 9.17 Million PAX (+6.1%); 3.39 Billion FTK (+14.2%).

1st 9 months Top World Airlines Traffic RPK Billion:
1 AAL 148.39; 2 UAL 132.89; 3 DAL 123.75; 4 NWA 88.26; 5 BAB 76.23; 6 AFA 74.00; 7 CAL 73.12; 8 DLH 67.07; 9 SIA 55.60; 10 SWA 55.20; 11 JAL 54.81; 12 ACN 54.41; 13 USA 50.38; 14 KLM 48.87; 15 QAN 43.76; 16 CAT 36.14; 17 IBE 30.78; 18 KAL 28.06; 19 AMW 23.82; 20 TII 19.76; 21 ALI 19.68; 22 SAS 18.82; 23 CHI 18.23; 24 VAR 17.47; 25 GUN 17.21.

December 2002: "Overhaul & Maintenance" & "Aviation Week" award (HAECO) "Best Asia-Pacific Independent (MRO) operation."

3 A340-642's (436, B-HQA; 453, B-HQB; 475, B-HQC), 8F, 60C, 220Y, (ILF) leased. In 4/03, nonstop to NY.

January 2003: Nick Rhodes, Director Flight Operations, succeeded Capt Ken Barley, who retired.

(DOT) OK's code share with American Airlines (AAL) to 20 USA cities.

February 2003: (CAT), Japan Airlines (JAL) Cargo, Qantas (QAN) Freight, & Singapore Airlines (SIA) Cargo signed an (MOU) to partner in a new e-business portal (working title is "Air Cargo Exchange") that is to go online by mid/03. At the heart of the new portal will be a joint operation provided by the Cargo Community Network Singapore and Global Logistics System Hong Kong, also known as Traxon Hong Kong. Initially, customers will be able to make allotment and free-sale bookings, conduct tracking and tracing, as well as review flight schedules of the 4 carriers. Interestingly, (JAL) & (SIA), are also affiliates of the WOW cargo alliance, incl (SAS) Cargo & Lufthansa Cargo (LUB). (CAT) & (QAN) are linked to the Oneworld alliance.

Expands its code share with Oneworld member, British Airways (BAB), to including flights (LHR) to Copenhagen, & Lisbon, and Hong Kong-Seoul.

March 2003: 2002 = +# HK$3.98 Billion/+$510.7 Million (+# HK$657 Million): 49.04 Billion RPK (+9.5%); 12.32 Million PAX (+9.3%); 77.8% LF record! 4.85B FTK (+12.1%). Attributable to "increased passenger demand, strong growth in the cargo business and success of ongoing efforts to increase productivity and reduce operating costs."

(HAECO) 2002 = +# HK$465 Million +# HK$312 Million).

In 4/03, will reduce systemwide passenger capacity by -14% due to military action in Iraq, and Hong Kong Severe Acute Respiratory Syndrome (SARS) virus alert.

(CAT), (PCCW) Netvigator, & Tenzing Communications inked a new partnership under which the Netvigator e-mail service will be offered on a free trial basis until 6/03, to PAX on 42 (CAT) aairplanes. The entire (CAT) fleet will be equipped with the service by end of 2003.

14,293 employees.

April 2003: Falling customer demand (-66%) due to fear of Severe Acute Respiratory Syndrome (SARS) virus may force (CAT) to ground its fleet.

Granted licenses to resume service to mainland China with 3/day flights to Beijing and Shanghai, and 3/week to Xiamen.

World Top 20 Airlines 1st Q Traffic (Billion) (RPK)
1 (AAL) 44.67; 2 (UAL) 39.66; 3 (DAL) 36.82; 4 (NWA) 26.65; 5 (BAB) 23.31; 6 (AFA) 23.27; 7 (CAL) 21.35; 8 (DLH) 20.62; 9 (SWA) 17.53; 10 (KLM) 14.04; 11 (USA) 13.28; 12 (SIA) 12.20*; 13 (ACN) 9.65*; 14 (CAT) 8.51*; 15 (AMW) 7.84; 16 (QAN)* 7.18; 17 (KAL)* 6.72; 18 (IBE) 6.17*; 19 (EAD) 5.69*; 20 (AAT) 5.42. * 2 months only.

May 2003: Asks its entire staff, including executives to take 4 weeks of unpaid leave between 06/ & 09/03 to save about -7.7% in costs without layoffs. Passengers are down -75%, schedule has been cut -45%, and 22 airplanes grounded.

Negotiates to defer 3 777-300's, 3 A330-330's and 1 A340-600, all due in 2003 & 2004.

June 2003: In 5/03, traffic was down -1.2B RPK (-67.5%); capacity -41.6% ASK, and 41.4% LF (-32.9). Last 5 months = 15.12M RPK (-21.2%); -3.1% ASK; 63.6% LF (-14.6).

2002 = +$511 Million (+$84.2 Million): 49.04 Billion RPK (+9.5%); +.4% ASK; 77.8% LF (+6.5); 12.3 Million PAX (+9.3%); 4.85 Billion FTK (+23.3%); 14,649 EMPLOYEES (+1.2%).

2002 TOP 25 WORLD AIRLINES - TRAFFIC - Billion - RPK
1 (AAL) 195.81; 2 (UAL) 176.15; 3 (DAL) 152.66; 4 (NWA) 115.91; 5 (BAB) 99.71; 6 (AFA) 96.80; 7 (CAL) 95.51; 8 (DLH) Grp 88.57; 9 (JAL) 83.54; 10 (QAN) 75.23; 11 (SWA) 73.05; 12 (SIA) 71.12; 13 (ACN) 69.42; 14 (USA) 64.72; 15 (KLM) 58.89; 16 (ANA) 52.97; 17 (CAT) 49.04; 18 (TII) 48.51; 19 (KAL) 41.80; 20 (IBE) 40.47; 21 (MAS) 36.90; 22 (AMW) 31.98; 23 (SAS) Grp 30.91; 24 (EAD) 30.17; 25 (ALI) 29.84.

2002 TOP 25 WORLD FREIGHT CARRIERS - Billion - FTK
1 (FED) 13.20; 2 (LUB) 7.16; 3 (UPS) 6.62; 4 (KAL) 6.25; 5 (SIA) 6.08; 6 (AFA) 4.87; 7 (CAT) 4.85; 8 (CHI) 4.60; 9 (JAL) 4.39; 10 (CLX) 4.16; 11 (BAB) 4.12; 12 (KLM) 3.99; 13 (EVA) 3.28; 14 (NWA) 3.24; 15 (AAL) 2.93; 16 (UAL) 2.79; 17 (AAR) 2.75; 18 (NCA) 2.21; 19 (POA) 1.97; 20 (EAD) 1.96; 21 (MAS) 1.92; 22 (BEJ) 1.88; 23 (TII) 1.824; 24 (DAL) 1.823; 25 (ACN) 1.58.

July 2003: 13,970 employees.

2002 = +$511 Million (+$84 Million): 49.04 Billion RPK (+9.5%); 77.8% LF; 12.32 Million PAX (+9.3%); 4.85 Billion FTK (+12.1%).

Code share with Qantas (QAN), Australia through Hong Kong to Rome.

August 2003: 1st 6 months = -# HK$1.24 Billion/$159.1 Million (+# HK$1.41 Billion/+$181 Million): 17.28 Billion (-25.1%); -9.2% ASK (capacity); 64.4% LF (-13.7). A strong 1st Q helped to mitigate the damage inflicted by the (SARS) outbreak. 4 Million PAX (-32.3%); 64.4% LF (-13.7).

Implemented Ultramain on its A340-600 fleet in the 2nd phase of a major upgrade program to replace its in-house-developed Maintenance and Engineering system.

September 2003: In 11/03, expands its code share with American (AAL) from Los Angeles to Nashville, New Orleans, Pittsburgh, Raleigh/Durham, and Tampa.

2 A330-343X's (539, B-HLU; 548, B-HLV) deliveries.

October 2003: 1st 9 months = 29.59 Billion RPK (-18.1%); -9.2% ASK; 70.9% LF (-7.7).

In 12/03, Hong Kong to Beijing (3/week), 1st service to Chinese mainland.

Is studying acquiring 15 used 747-400's for growth, some in passenger config but may convert most to freighter configuration. Fellow OneWorld member, British Airways (BAB) is a potential seller (has 57 747-400's and RB211 engines).

777-367 (456-33702, B-HNM) delivery.

December 2003: Is awarded 5th freedom rights for Hong Kong - London - New York. Completed flight Hong Kong - Beijing, its 1st flight to the Chinese capital in 13 years.

1 order 747-400. A330-343X (565, B-HLW) delivery.

January 2004: 2003 = +# HK$1.3 Billion/+$166.8 Million (-67.3%) (+# HK$3.98 Billion/+$510.8 Million): 42.77 Billion RPK (-12.8%); 10.06 Million PAX (-18.4%), 5.3 Billion FTK (+2.3%); 874,724 tonnes of cargo (+2.8%), an impressive rebound after its 1st 6 months loss of -# HK$1.24 Billion due to the (SARS) crisis.

In a major expansion of its freighter capacity, plans to add up to 13 airplanes to its cargo fleet. 1 order (2/05) 747-400F (RB211-524H-T). Will convert at least 6, and as many as 12 747-400 passenger airplanes into freighters. Will be the launch customer for the new converted 747-400 Special Freighter (SF). This modification will have a strengthened main deck and side cargo door identical to those on the production 747-400F, including an estimated capacity of 113,490 kg and a range of 7,600 km. It will be used on trunk cargo routes within Asia, and to North America and Europe. Boeing is working with Taikoo (Xiamen) Aircraft Engineering Co on the prototype modification. (CAT) may also convert a number of its own 747-400 passenger airplanes along with others purchased secondhand.

At the same time, plans new freighter service from Hong Kong to Beijing, Munich and points in North America.

In 3/04, Hong Kong to Colombo, via Singapore (daily).

To recruit +500 cabin crew (CA) with 100 to be based in London.

February 2004: Code share with Aeroflot (ARO), Hong Kong-Moscow (767, 6/week).

777-367 (470-33704, B-HNO) delivery.

March 2004: In 7/04, Hong Kong-(New York (JFK) (A340-600, 8F, 60C, 220Y, daily nonstop, saves 3 hours over northern polar route).

April 2004: 1st Q = 12.34 Billion RPK (+6.8%); +3.5% ASK; 75.2% LF (+2.3).

2 orders (2/05) 777-300ER's (Trent 800) and 6 orders (6/05) A330-300's (Trent 772-60), 3 (ILF) 6 year leased.

May 2004: James Hughes-Hallett, Chairman, is going to take a new assignment 1/05 as Chairman of John Swire & Sons Ltd, Cathay's major stakeholder, based in London. Subject to board approval, his position will be filled by David Turnbull. Following will be Philip Chen (CEO), and Tony Tyler, (COO).

June 2004: In 8/04, (CAT) Cargo joint venture with Lufthansa Cargo (LUB), Hong Kong - Dubai - Munich (747-200, wet-leased, 3/week).

OneWorld Alliance: Aer Lingus (ARL); American (AAL); British Airways (BAB); Cathay Pacific (CAT); Finnair (FIN); Iberia (IBE); LAN (LAN); & Qantas (QAN).

July 2004: Hong Kong - New York (JFK) (A340-600, daily nonstop). Code share with Iberia (IBE), Amsterdam - Hong Kong, & Amsterdam - Madrid & Barcelona.

Last 6 months = +# HK$1.77B/+$227M (-# HK$1.24B/-$159M): 26.83B RPK (+55.3%); +31.4% ASK; 76.1% LF (+11.7); 6.4M PAX (+59.3%); 469,909 tonnes (+15.8% FTK).

1 747-412 (PW4056) (26548, B-HKD), Singapore Airlines (SIA) leased.

August 2004: Completed an enterprisewide deployment of Intellisync's synchronization technology, which is intended to increase the airline's "companywide employee efficiency and productivity by enabling employees to sync Palm OS and Pocket PC handhelds with Nocell GroupWise," Intellsync's standard groupware solution.

8 orders 747-400's, 4 of which to be conversion to freighter (for trunk routes to Europe & North America), including 6 with (PW4056) engines, ex-Singapore (SIA) (24227; 27070; 27133) & 2 with (RB211-524) engines, ex-South African Airways (SAA). These airplanes are in addition to the 9 ordered earlier this year.

September 2004: Gained greater access to Beijing with a landmark aviation deal struck between Hong Kong & China, but won't receive flights to Shanghai until 2006. By 2006, Hong Kong-mainland China increased from 1,200 to 1,600x-weekly. Cargo capacity from 21x- to 42x-weekly. In 3/05, Hong Kong-Beijing (from 3x-weekly to 2x-daily). In winter 2004, will launch passenger services to Xiamen (3x-weekly) and cargo flights to Shanghai, altho latter probably operated by Air Hong Kong (AHK).

October 2004: Cathay Pacific Airways (CAT) and Air China (BEJ) entered into an (MOU) stating (CAT)'s intention to acquire a 9.9% shareholding in (BEJ) at the time of the latter's (IPO). The (MOU) also deals with future cooperation between them, including joint marketing & sales activities to promote traffic between city pairs in their respective markets, coordinating of operating schedules to enable the maximum feeding of passengers and cargo between them and cooperation in engineering, ground handling, catering, cargo services, info technology, purchasing, safety, and security.

1st 9 months = 41.94B RPK (+41.7%); +30.2% ASK; 77.1% LF (+6.2).

747-412SF (859-25127, B-HKE) bought from Wells Fargo (trustee).

December 2004: 13,970 employees.

Air China (BEJ) raised $1.06 Billion in the launch of its (IPO) in a market that was buoyed by oil prices retreating from record highs and the bullish rise of air travel in China. The (IPO) wasa for 2.8 Billion shares representing 31% of the airline at # HK$2.98/$0.38 each. Cathay Pacific (CAT) bought 905 Million shares or 32.3% of the offering for # HK$2.69 Billion. Air China (BEJ) who recently took over China Southwest Airlines (XIN), & Zhejiang (ZHE) under the country's consolodation policy, has a 35% share of China's 20 busiest routes and 51.3% of its international market.

January 2005: 2004 = +# HK$4.4 Billion/+$566 Million (+# HK$1.3 Billion): +33.9% RPK; 77.8% LF; 13.7 Million PAX (+35.8%); 972,416 tonnes (+11.2%)

February 2005: 747-400F delivery, its 88th airplane. Will be used initially Hong Kong to Singapore.

March 2005: 747-412F (SCD) (25128), ex-Singapore (SIA) after freighter conversion.

April 2005: 1st Q = 15.51B RPK (+17.7%); +12.8% ASK; 78.5% LF (+3.3).

In 11/05, new freighter service, Hong Kong to Dallas and continue on to Atlanta. This will ammke 21 weekly scheduled freighter services to 6 USA cities.

777-367 (34243, B-HNP), delivery.

May 2005: Has commenced work on the passenger - to - freighter conversion of a 747-400 to a 747-400SF at Taikoo Aircraft Engineering (TAECO) works in Xiamen under Boeing's supervision. The project is part of Cathay (CAT)'s plan to boost its fleet to 104 airplanes in 2 years. With subsidiary, Air Hong Kong (AHK), the total will be >110 airplanes. The prototype 747-400SF is being converted from a former (CAT) passenger airplane and will carry >113 tonnes of freight. (CAT) has signed up for 6 conversions and could take as many as 12.

(MOU) for promoting sales & marketing initiatives with Air China (BEJ) including new code sharing. In 4th Q, (BEJ) code share on 2 (CAT) flights Beijing to Hong Kong (1 daily and the other 3x-weekly). In turn, (CAT) will code share on 3 of (BEJ)'s to and from Beijing. The code share will include reciprocal frequent-flier benefits.

June 2005: 2 A330-343's (669, B-LAA; 673, B-LAB), (ILF) leased.

July 2005: 1st 6 months = +# HK$1.67B/+$214.9M (-5.7%) (+# HK$1.77B): 26.83B RPK (+16.1%); +12.2% ASK; 78.1% LF (+2); 7.3M Passengers (+14.5%); +27.9% fuelcosts.

A330-343X (679, B-LAC), (ILF) leased delivery.

August 2005: In 11/05, Hong Kong - Jakarta (A330-300, 2/day). 4th daily passenger service to London. To Atlanta & Dallas (Freighter service).

15,040 employees (+2.5%).

1st 747-400F freighter converted will enter service in 12/05. Has 6 more by 2007.

September 2005: Japan Airlines (JAL) will expand its code share agreement with Cathay Pacific (CAT) between Japan and Hong Kong to include a daily roundtrip between Hong Kong and Fukuoka beginning October 3 that will be operated by (CAT). The flight is routed via Taipei but (JAL) passengers can travel only between Fukuoka and Hong Kong.

Telair International said it successfully completed its (FAA) (STC) System Conformity Inspection for the first Main Deck Cargo Loading System installation of the 747-400SF passenger-to-freighter conversion. Cathay Pacific (CAT) is the launch customer for the system with 6 firm and 6 option conversions.

October 2005: (SITA) INC said British Airways (BAB), Cathay Pacific (CAT), China Eastern Airlines (CEA) and Malev (HGA) signed contracts with a total value of $10 million for its new Airfare Insight solution. Airfare Insight, part of SITA's Airfare suite of applications, enables airlines to manage their entire fare structure in one system.

The world's largest nonaligned airline is independent no more - - Japan Airlines (JAL) said yesterday it will apply to join Oneworld, a decision that was "warmly welcomed" by the alliance. In terms of revenues, (JAL) Group is the No 3 airline company in the world, trailing Lufthansa (DLH) Group and Air France (AFA) - (KLM) Group.

The link is not unexpected given the close association between (JAL) and Oneworld anchors American Airlines (AAL) and British Airways (BAB) as well as with Qantas (QAN) and Cathay Pacific (CAT), also members of the partnership.

"Becoming a member of Oneworld, while maintaining our bilateral agreements, would provide our customers with even greater convenience, comfort and value through a more extensive global network, integration of e-ticketing, the linkage of frequent-flier mileage programs, the mutual use of each other's services such as lounges and by the creation of seamless travel," (JAL) Group (CEO) Toshiyuki Shinmachi said. (JAL) will bring a lineup of 206 airports in 34 countries to the Oneworld network, which covers 600 cities in 135 countries. It will expand Oneworld's existing network by +10%, adding +68 unique destinations including +56 in Japan, +5 in China and Guam.

American Airlines (AAL) will be supporting (JAL) through the membership application process as its prime oneworld sponsor, assisted by Cathay Pacific (CAT).

"We are very pleased that (JAL) has recognized the value that membership of Oneworld offers and look forward to working with [it] to complete the agreements, procedures and processes that are necessary before we can issue a formal invitation to join," Oneworld Managing Partner John McCulloch stated.

Last week the alliance announced its first member from the Middle East, Royal Jordanian (RJA).

Cathay Pacific (CAT) will increase the frequency of flights from Hong Kong to Seoul on Jan 27th. The airline will operate a 5th daily nonstop flight which will depart Hong Kong right after midnight and will be the airline's 1st morning departure from Seoul. Cathay Pacific (CAT) and Air China (BEJ) will codeshare between Beijing and Hong Kong from October 30. (CAT) will operate 10x-weekly to Beijing and (BEJ) will operate 3x-daily roundtrips.

November 2005: Cathay Pacific Airways (CAT) is adding a 5th daily flight between Hong Kong and Seoul beginning January 27. (CAT) said it hopes to launch daily service to Rome following the Hong Kong government's announcement that it has secured additional rights. (CAT) currently flies to Rome 5x-weekly.

Cathay Pacific (CAT) will operate daily service from Hong Kong to Delhi (direct) and Mumbai (through Bangkok) December 1 to January 31. It currently operates 4x-weekly to each destination. India has lifted its capacity limit during the peak travel season.

Cathay Pacific (CAT) launched 3x-weekly 747-400F freighter service from Hong Kong to Atlanta and Dallas.

(CAT) reported October RPKs (passenger traffic) of 5.52 billion, a +10.8% rise over the year-ago month, and 7.23 billion ASKs (capacity), a +12.7% increase. Load factor dropped -1.3 points to 76.3% LF.

1st 9 months = 48.12 Billion RPK (+14.7%); 4.789 Billion FTK (+10%); 11.44 Million passengers (+14%).

Pratt & Whitney (P&W) signed a 10-year, $300 million fleet management contract with Cathay Pacific (CAT) for jet engine Maintenance Repair & Overhaul (MRO) on (CAT)'s (PW4000-94)-powered 747-400s.

Cathay Pacific Airways (CAT) Chairman David Turnbull, also Chairman of John Swire & Sons (HK) and (CAT)'s largest shareholder Swire Pacific, announced he will depart the Swire Group effective at the end of January after 3 decades, including 20 months as Chairman of the airline. He will continue as nonexecutive Chairman of Hong Kong Aircraft Engineering Company (HAECO). He will be replaced by Christopher Pratt, Head of the Swire Pacific Trading & Industrial Division and Chairman of Swire Pacific Offshore. (CAT) cited Turnbull's desire to "resume a more active operational role." He was named Chairman of (CAT) in May 2004 after 8 years as Managing Director of (CAT), succeeding James Hughes-Hallet. Turnbull was replaced as (CEO) by (COO) Philip Chen.

December 2005: Hong Kong Civil Aviation Department approved the use of fuel surcharges for an additional 2 months through January. Airlines may raise the levy +2.1% to HKD93/$12 on short-haul flights and +8.4% to HKD383 on long-haul flights, the "Associated Press" reported.

(CAT) signed an agreement with Air Traffic Control (ATC) provider Airservices Australia "aimed at delivering greater operational efficiencies and possible future cost savings," according to (CAT). The arrangement includes development of a communications protocol and implementation of an operational awareness program featuring crew visits to each other's facilities. The deal is the 1st of its kind for (CAT), which said it intends to sign similar accords with (ATC) organizations across its network.

Separately, (CAT) announced it will launch 3x-weekly service (Mon/Thu/Sat) to Manchester via Moscow on March 27 pending government approval. Flights will be operated with A340-300s. (CAT) has been code sharing with Aeroflot (ARO) on flights to Moscow since June 2004. (CAT) will increase the frequency and capacity on its Hong Kong to Rome (FCO) route to daily beginning March 27th. (CAT) will add flights on Tuesday and Thursdays to offer daily service and will upgrade from an A340-300 to a 747-400.

(CAT) took delivery of its 1st 747-400 Boeing Converted Freighter in Xiamen. (CAT) launched the Boeing passenger-to-freighter conversion program in January 2004 with an order for 6 firm conversions and options for a further 6.

(CAT) chose the 777-300ER, stating that it will order up to 36 of the type including 16 firm airplanes that will be delivered between September 2007 and July 2010 and powered by (GE90-115B)s. A Boeing statement did not refer to the deal as a final order but confirmed the numbers (CAT) released. (CAT) said it also will take 3 (Trent 700)-powered A330-300s in 2008 for regional routes.

The firm 777-300ERs will be acquired through a combination of 12 direct purchases from Boeing and 4 operating leases from (ILFC) (ILF). (CAT) holds purchase rights on an additional 20 777s. The A330-300s also will be acquired via operating leases from (ILFC) (ILF). Media reports valued the deal at $4.6 billion.

"These airplane orders mark an exciting and significant milestone in the development of our airline, demonstrating our board's confidence in the long-term future of the airline and Hong Kong," (CEO) Philip Chen said. "This rapid fleet increase will enhance our strength as a carrier and Hong Kong's position as a global hub and gateway to the Chinese mainland."

The order is a blow to Airbus, which had hoped to build on the 3 A340-600s in the (CAT) fleet. Those airplanes are on short-term lease from (ILFC) (ILF) and will be returned when the leases expire. It is expected that the 777-300ERs will replace some passenger 747-400s, although the carrier remains a longer-term candidate for the 747-8. Later this month it takes redelivery of the world's 1st 747-400BCF (Boeing Converted Freighter) converted from 1 of its 747-400s. It has firm orders for 6 747-400BCFs and options for a further 6.

Interestingly (CAT) played a major supporting role for Boeing's recent 777-200LR 23-hour, 42-minute record-breaking flight from Hong Kong to London eastbound, and although the 777-200LR was not mentioned at the order announcement, insiders expect the airline will include that model in the options.

(CAT)'s love affair with the 747-400 is set to continue for "many years yet," according to (COO) Tony Tyler. Tyler confirmed that the 777-300ERs ordered will be used for "new services" that will include new destinations and increased frequencies. The longer-term 747 replacement for the heaviest routes at (CAT) will pit the A380, which Airbus (COO) Commercial John Leahy vows the airline will buy against the born-again 747-8.

(CAT) signed a $2.85 billion purchase agreement for 12 777-300ERs plus 20 options, finalizing an order it placed earlier this month. It will begin taking delivery of the (GE90-115BL2)-powered airplanes in September 2007. The deal also includes 4 leased 777-300ERs from (ILFC) (ILF).

(CAT) celebrated completion and certification of the 1st 747-400BCF (Boeing Converted Freighter) at a redelivery ceremony held in Xiamen. (CAT) ordered 6 firm passenger to freighter conversions and holds options for another 6.

January 2006: Cathay Pacific (CAT) reported December passenger traffic of 6.05 billion (RPK)s, a +12.7% increase over the same month in 2004. Capacity rose +11.1% to 7.55 billion (ASK)s and load factor improved 1.2 points to 80.2% LF. The North American market showed the most growth as passenger traffic climbed +22.4% to 1.64 billion (RPK)s on a capacity increase of +19.1% to 2.02 billion (ASK)s. Cargo traffic rose +17.6% to 623.5 million (FTK)s on a +17.2% increase in freight capacity to 910.2 million (ATK)s. Cargo load factor gained 0.3 point to 68.5% LF, which the carrier attributed in part to "directional imbalances of trade." Full-year traffic grew +13.7% over 2004 to 65.11 billion (RPK)s (14th highest in world), against a +11.8% climb in capacity to 82.77 billion (ASK)s, lifting load factor +1.4 points to 78.7% LF. 15.44 passengers (+13%). Cargo traffic rose +10.2% to 6.62 billion (FTK)s, capacity climbed 12.9% to 9.88 billion (ATK)s and load factor dropped -1.7 points to 67% LF.

Chinese airlines reported robust growth in passengers and cargo for 2005 thanks to surging traffic, and in the case of China Eastern (CEA) and China Southern (GUN) the gains from mergers completed last year. Air China (BEJ) reported a +13% increase in passengers to 27.7 million while cargo jumped +10.2% to 732,818 tonnes. China Eastern (CEA) saw a +37% leap in passengers to 24.3 million and a +14% rise in cargo to 755,010 tonnes. China Southern (GUN) also had impressive numbers as passenger totals jumped +56.4% to 44.10 million and cargo climbed +42.1% to 774,550 tonnes. In Hong Kong, Cathay Pacific (CAT) reported +13% annual growth in passengers to 15.4 million while cargo rose +15% to a record 1.1 million tonnes. Dragonair (DRG) handled 5 million passengers, up +9.9%, and 385,000 tonnes of cargo, a rise of +12.5%.

(EADS) Revima said the 1st 777 landing gear shipset arrived at its workshop in Caudebec-en-Caux, France, for scheduled overhaul, with completion scheduled for the beginning of next month. The landing gear belongs to Cathay Pacific (CAT), which recently signed a long-term contract with (EADS) Revima for gear exchanges and Maintenance Repair & Overhaul (MRO) of its fleet of 777-200s/-300s.

February 2006: Cathay Pacific (CAT)'s passenger traffic rose +12.5% in January to 6.08 billion (RPK)s. Capacity climbed +11.4% over the year-ago month to 7.56 billion (ASK)s, lifting load factor +0.8 point to 80.4% LF. Its most significant increases were on North American routes, where traffic rose +21.5% to 1.75 billion (RPK)s and capacity grew +19.2% to 2.02 billion (ASK)s.

Hong Kong International Airport set a new daily record during the Chinese New Year holiday, handling a record 853 flight movements Jan 27, beating the previous year's record of 827. Hong Kong Airport Authority has announced plans to spend HKD4.5 billion/$580 million on upgrades at its international airport. (CEO) David Pang said HKD1.5 billion would be spent on the passenger terminal while the rest would be used to upgrade air facilities, including the construction of 10 additional cargo stands and taxiways. The taxiway shoulders will also be widened for the A380.

(CAT) said its 3x-weekly service to Manchester via Moscow has been postponed from a scheduled startup of March 27 owing to a delay in securing regulatory approval for the Manchester segment. (CAT) code shares with Aeroflot (ARO) on the Hong Kong - Moscow route.

Hong Kong International Airport reported passenger traffic in January totaled 3.5 million (RPK), a +15.9% increase over the year-ago period.

Hong Kong Airport Authority has received approval to establish a joint venture to operate the airport in the mainland city of Zuhai. It did not provide details of the agreement but said the venture would strengthen ties between Hong Kong and the Pearl River delta area. The deal is seen as a potentially important step for Hong Kong as it battles growing competition from lower-priced transport hubs on the Chinese mainland. Zhuhai airport, located 67 km west of Hong Kong, opened 10 years ago but has struggled to attract airline traffic, handling just 753,900 passengers in 2004.

Airbus announced that (HAECO) has become the 13th member of the Airbus jet airplane Maintenance Repair & Overhaul (MRO) Network.

March 2006: Cathay (CAT) flew 5.22 billion (RPK)s passenger traffic in February, a +9.2% increase over the year-ago month. Capacity rose +9.6% to 6.77 billion (ASK)s, dropping load factor -0.3 point to 77.1% LF. Freight traffic increased +12% to 502.8 million (FTK)s against a +5.4% rise in capacity, lifting cargo load factor +4 points to 68% LF.

(CAT) emphatically stamped itself as one the world's strongest performers with a profit of +HK$3.47 billion/+$446.9 million in 2005 despite a +38% rise in fuel prices. Although profit fell -23.2% from 2004's +HK$4.52 billion, (CAT)'s underlying fundamentals improved. Turnover climbed +19.1% to a record HK$50.91 billion, passengers carried grew +13% to 15.4 million, load factor lifted +1.4% to 78.7% LF, passenger yield increased +1.1% and freight jumped +15% to 1.1 million tonnes. Cost per (ATK) excluding fuel, decreased -1.9%, while average airplane utilization was up +5% to 12.6 hours.

Total operating expenses rose +24.7% to HK$46.77 billion, dropping annual operating profit -21% to +HK$4.14 billion. Overall fuel costs increased +48.5% to HK$11.64 billion. (ASK)s climbed in all regions and only the North American market saw an easing of load factor, but that was more than offset by a leap in yield. Overall passenger capacity rose +11.8% to 82.77 billion (ASK)s and load factor increased +1.4 points to 78.7% LF.

On the cargo front, (FTK)s were up +12.9% to 9.88 billion but load factor dipped -1.7 points to 67% LF and yield eased 0.6%. (CAT) launched new cargo service to Dallas and Atlanta in 2005, plus overnight express operations on behalf of (DHL) to Shanghai, Beijing and Nagoya.

Chairman Christopher Pratt summed up the result by saying, "Demand was strong in 2005, and we remain optimistic about our future even though our 2006 results are likely to remain heavily dependent on fuel prices."

(CAT) will more than double its freighter capacity to and from India by September. The airline now operates 3x-weekly freighter services into Mumbai and onward to Paris, with Boeing 747-200F freighters. It also operates a 3x-weekly service to Delhi and further to London Heathrow with a 747-400F. The capacity expansion will be focused on Mumbai, where it will deploy the larger capacity 747-400F freighter airplane. Frequencies to and from Mumbai will be stepped up to 12x-weekly flights from 3x-. From June, the expansion program will see the introduction of a weekly turnaround service between Mumbai and Hong Kong with a 747-200F. On the Hong Kong - Mumbai - Paris sector, (CAT) will add a 4th service with a 747-400F. In addition, it is proposed to introduce a 4x-weekly service from August on the Paris - Mumbai - Hong Kong sector with the larger capacity 747-400F.

(CAT) will launch a 2x-weekly Hong Kong - Mumbai - Chennai - Hong Kong freighter service aboard a 747-200F. It features (CAT)'s 1st direct cargo flight from India to Hong Kong. (CAT) said it plans to add more freighter flights to India later this year.

The strong financial results underpinned (CAT)'s record order for up to 36 777-300ERs to be delivered between 2007 and 2010. During 2005, 9 airplanes entered service including the world's 1st 747-400BCF, for which it has firm orders for 5 additional and options for a further 6. 1 new 747-400F, 1 777-300, 3 A330-300s and 3 refitted secondhand 747-400 passenger airplanes joined the fleet, which will total 101 airplanes by September when (CAT) celebrates its 60th anniversary.

(CAT) is looking at a variety of options for its growing freighter fleet, according to (COO) Tony Tyler, who said that (CAT) likes the 747-400BCF and may convert 6 options to firm orders. "If and when we do, we are likely to convert some of our own 747-400s but not all, because we will still need the passenger lift," he said. In the longer term, he said (CAT) will "look at the 747-8F as well as other options such as the A380F and the 777-200F." (CAT) has been considered a prime candidate for the 747-8, although its interest in the intercontinental version appears to have waned somewhat in favor of the 777-300ER.

747-444 (25152, B-HUS), ex-South African Airways (SAA) ferried to China for freighter conversion.

April 2006: Cathay Pacific (CAT) flew 5.78 billion (RPK)s passenger traffic in March, a +8.6% increase over the year-ago month. Capacity climbed +10.5% to 7.5 billion (ASK)s and load factor fell -1.4 points to 77.1% LF.

(CAT) (COO) Tony Tyler said (CAT) will focus its mainland China activities on just 3 cities, Beijing and Xiamen (currently served), and Shanghai, with 3x-daily flights starting as early as this year.

"Revenues in China will be growing very quickly and the market is getting more important," Tyler said. But other destinations, like Chengdu, will be better served by Dragonair (DRG), in which (CAT) holds 19.9%. Future route cooperation with partners such as regional startup Hong Kong Express also may occur, "and we would be very happy to work with them when they do the job much cheaper then us," he said.

Meanwhile, the commercial relationship between (CAT) and Air China (BEJ), in which (CAT) holds 9.9%, is at a delicate stage as (BEJ) leans toward joining the Star (SAL) Alliance, while (CAT) is a founding partner in Oneworld (ONW). "To work together with (BEJ) is important for us," Tyler said. But the level of cooperation may hinge on which alliance (BEJ) joins. "It is their decision," he stated. "We share with them our opinions of alliances. It is no secret that Oneworld (ONW) wants to have a Chinese partner."

There have been rumors in Hong Kong that (CAT) soon may launch a bid to regain control of (DRG). Tyler declined to comment on possible consolidation but said, "We are looking at how we can work better together. We have some overlap on cargo routes with (DRG), but we see plenty of possibilities."

Later, a joint statement released by (CAT) and Air China (BEJ) and investors Swire Pacific, China National Aviation Co and (CITIC) Pacific confirmed reports that "discussions are taking place about operational cooperation" between (CAT) and (BEJ) and "realignment of shareholdings" in the 2 airlines and Dragonair (DRG), the Hong Kong carrier owned jointly by (CNAC) (43.3%), (CITIC) (28.5%), (CAT) (17.8%) and Swire (7.7%). There has been talk of (CAT)'s increasing its stake in (DRG) as it looks to build a stronger presence on the mainland, while (BEJ), in which (CAT) owns 9.9%, leans toward joining the Star (SAL) Alliance.

"There is no agreement or arrangement which is discloseable under the Listing Rules," the statement said, adding that Swire intends to remain the principal shareholder in (CAT) (46.8%), (CNAC) will retain controlling interest in Air China (BEJ) (69%; it also owns 43.3% of (DRG), (CITIC) "may reduce" its 25.7% share in (CAT) but plans to remain a "significant shareholder," and (BEJ) has "no current intention" to privatize (CNAC).

Negotiations between Air China (BEJ) and (CAT) center on enhancing "cooperation between them in various business and operational areas," the statement said, while (DRG) will continue to "remain a principal airline" in Hong Kong and the Chinese mainland.

Discussing the emergence of low-cost carriers such as AirAsia (ASW) and Tiger Airways (TGR), Tyler said they have had no effect on (CAT) nor is he concerned about the arrival of Oasis, a low-cost, long-haul startup planning to launch service to London this summer. He is more worried about the impact of another airline: "The growth of Emirates Airlines (EAD) affects everybody. We are not a subsidized carrier and cannot grow that fast." He acknowledged that (CAT) has lost traffic to (EAD), "but I wouldn't say how much."

(CAT) will increase the frequency of flights from Hong Kong to Paris (CDG) from 7x- to 10x-weekly on July 2nd. In addition to the daily 747-400 flight, the airline will operate a 2nd flight departing Hong Kong on Wednesdays, Fridays, & Sundays, and departing Paris on Mondays, Thursdays, & Saturdays using an A340-300.

(CAT), which generates about 30% of its revenue from cargo activities, is evaluating its future freighter fleet and is studying the 747-8F, 777F and A380 freighter. "We are looking at them but we may not make a decision this year, because we are very well served with our strategy not to order [new] airplanes too early," (COO) Tony Tyler said. He joked that the airline might make an exception "if Boeing gives us a killer offer."

(CAT) currently operates a fleet of 7 747-200Fs, 6 747-400Fs and 1 747-400BCF. It has orders for 5 more 747BCFs and 6 options. It also holds 60% of Air Hong Kong (AHK), which operates 6 747 freighters. Cathay (CAT) is planning to build its own cargo terminal at Hong Kong International Airport, which it says will add soon-to-be-needed capacity while helping to control handling costs.

On the route network, it faces the same problem as other freight carriers: Flights from the Far East to Europe are mostly full, but on the backhaul, airplanes have too many empty pallet positions. To solve the problem, it is looking for several new European destinations that can offer cargo for return flights. "We have Northern Europe in mind," Tyler said. Meanwhile, (CAT) will start a new 2x-weekly cargo service to Chennai on June 2.

Discussing the passenger fleet, Tyler said the airline is very interested in the 787-10 as well the 787-9. "That's the [kind of] future long-haul airplane we are looking for," he declared. The A380 is very much on the fleet renewal worksheet, as well the 747-8, because "one day we will have a need for larger airplanes." CAT) will take delivery of its 1st 777-300ER in September and place it on the North America network. It holds orders for 16 of the type and purchase rights for 20 more.

May 2006: Cathay Pacific (CAT) flew 5.86 billion passenger traffic (RPK)s in April, a +16.3% increase over the year-ago month. Capacity rose +11.5% to 7.26 billion (ASK)s, lifting load factor +3.3 points to 80.7% LF.

(CAT) will offer early retirement to 1,600 cabin crew (CA) with >15 years experience, according to a (CAT) spokesperson cited by the Associated Press. Those who elect to take the buyout, will receive 17 months' salary in addition to standard benefits and will be replaced by new staff.

(CAE) won contracts for flight simulators from (CAT), and Ryanair (RYR), valued at a combined C$48 million/$43 million. (CAT) signed a contract for a 777-300ER Full Flight Simulator (FFS), an accompanying integrated procedures trainer and seven virtual maintenance trainers. It is the 5th simulator the airline has purchased from (CAE) since 1992. (RYR) exercised an option for a 737-800 (FFS).

(CAE) announced a realignment of senior management responsibilities. Group President, Military Training & Simulation, Don Campbell was named Executive VP, (CAE). Executive VP Sales, Marketing & Business Development, Nick Leontidis was named Executive VP Innovation. Retaining his current role as head of Simulation Products, Marc Parent also will head Military Training & Services. Executive VP Marketing and Sales for Military Simulation & Training, Martin Gagne will retain his current responsibilities and hold the same position for Simulation Products.

(CAT) placed into service its 1st "silver bullet" freighter, a 747F stripped of almost all of its paint that is approximately 200 kg lighter, saving >-HK$1.5 million/-$193,450 in annual fuel costs. (CAT) said all 14 of its freighters will be modified over the next couple of years, and it also will introduce cargo and baggage containers. Passenger airplanes will maintain their full livery.

Japan Airlines (JAL) took delivery of the 2nd 747-400BCF in Xiamen. (JAL) has orders for 8 conversions and 4 options. The 1st 747-400BCF was redelivered to (CAT) in December.

June 2006: Cathay Pacific Airways (CAT) will launch 2x-weekly 747-200F Hong Kong - Mumbai - Chennai cargo flights.

(CAT)'s acquisition of Dragonair (DRG) and its routes into mainland China appeared imminent as trading in the Hong Kong-listed shares of (CAT), Air China (BEJ), China National Aviation Co, (CITIC) Pacific and Swire Pacific, was suspended for a 3rd consecutive day, according to press reports. (CITIC) Managing Director, Henry Fan told reporters he expected an official announcement soon. (CAT) already holds 17.8% of (DRG) and reportedly will pay approximately HK$8 billion/$1 billion in cash and stock for the rest.

It also may double its stake in Air China (BEJ) to 20% for an additional HK$4 billion, according to "Bloomberg News." In turn, Air China (BEJ) will obtain 17.5% of (CAT), making it the 3rd-largest shareholder behind Swire (which also holds 7.7% of (DRG)) and (CITIC) (which owns 28.5% of (DRG)). Air China (BEJ) holds 69% of (CNAC), (DRG)'s largest shareholder at 43.3%.

(CAT)'s only destinations on the Chinese mainland are Beijing, Xiamen, and Shanghai (freight only).

Later, the much-anticipated change in shareholder structure among (CAT), (DRG), and (BEJ), announced earlier by owners Swire Pacific, (CNAC) and (CITIC) Pacific is set to create the most powerful airline group in Asia. Under the agreement, which is subject to shareholder approvals, (DRG) will be wholly owned by (CAT), and (BEJ) will acquire a 17.5% stake in (CAT), which in turn will double its holding in (BEJ) to 20%. Swire will remain the principal long-term shareholder in (CAT). (DRG) will continue to operate under its own brand, but under (CAT) management, while (CAT) and (BEJ) will continue to develop closer ties.

The far-reaching deals end several years of sparring between (CAT) and (DRG) over access to the Chinese mainland. (CAT) part-owned and managed (DRG) between 1990 and 1996, when its current ownership structure came into effect, and set the 2 on a competitive collision course. Those difficulties manifested themselves in a range of problems, such as (CAT)'s and (DRG)'s inability to offer competitive through fares into China. The emergence of powerful players such as China Southern Airlines (GUN) and China Eastern Airlines (CEA), plus the liberalization of air routes into China, drove the restructuring announced recently.

Philip Chen (CEO) of (CAT), said that he was "delighted with the share realignment deal reached by (CAT), (BEJ), (CNAC), (CITIC) Pacific and Swire Pacific. It will result in a strengthening of Hong Kong's position as the premier aviation hub of the Asia/Pacific region, while at the same time making a significant contribution to the growth of the aviation industry in China. This win-win-win deal means we have created one of the world's strongest airline groupings:. (CAT), (DRG), and (BEJ)."

Under the agreement, (CAT) will buy the 82.21% of (DRG) it does not already own, for HK$8.22 billion/$1.06 billion. (BEJ) will become a substantial shareholder of (CAT) with a 10.16% stake, purchasing shares from Swire and (CITIC) for HK$5.39 billion. (BEJ) and its (CNAC) subsidiary will own 17.5% of (CAT), which will double its holding in (BEJ) for HK$4.1 billion.

No changes are expected in the respective carriers' alliance arrangements, with Air China (BEJ) recently joining the Star (SAL) Alliance and (CAT) being a founding member of Oneworld (ONW).

Later, (BEJ) offered HK$3.23 billion/$416 million to increase its stake in (CAT) to 17.5% as part of a transaction that will privatize China National Aviation Co (CNAC), which controls Air Macau (MCU) and catering, maintenance and ground handling services. (CNAC) agreed to sell its stake in (DRG), as part of the deal in which (CAT) is taking over its fellow Hong Kong airline. "For (BEJ), the privatization will bring the operating units of (CNAC) under our direct control and simplify our shareholding in (CAT)," (BEJ) Chairman, Li Jiaxiang said, according to "Bloomberg News." "For (CNAC) shareholders, this privatization reflects an excellent return on their investment." (BEJ) plans to use bank loans to fund the (CNAC) privatization.

Hong Kong Air Cargo Terminals Ltd (HACTL) issued a statement protesting (CAT)'s acquisition of (DRG), and application for a self-handling air cargo facility at Hong Kong International (HKG), saying the combination would "create a dominant, vertically integrated air cargo operation," that would "negatively impact airlines, cargo terminal operators, freight forwarders and other participants in one of Hong Kong's key business sectors." (HACTL) said (CAT) and (DRG) account for 40% of cargo volume at (HKG) and that a "process of full and open consultation with all stakeholders" should occur before the airport authority makes any further decisions regarding cargo capacity.

(CAT) said it plans to integrate the operations of (DRG) into its group, while keeping the (DRG) brand name separate from its own, following the completion of its acquisition of the airline. Networks and schedules will be integrated.

(CAT) has ordered 6 747-400ERF freighters and takes up all the remaining slots for the standard 747, in what it says is its biggest ever single commitment for new cargo airplanes. (CAT) said that the 6 new-build extended-range freighters are scheduled for delivery between May 2008 and April 2009. It said the 747-400ERFs will be powered by Pratt & Whitney (PW4062A) engines and will be used on key North American routes “to take full advantage of their superior payload range capability”. (CAT)’s freighter fleet currently comprises 14 747 cargo airplanes, specifically one 747-400 Boeing Converted Freighter (BCF), 6 747-400Fs and 7 747-200Fs. It has committed to adding at least 5 more 747-400BCFs, which are being converted from passenger configuration at Taikoo (Xiamen) Aircraft Engineering in China. It also has options on another 6 747-400 conversions.

(CAT) also is expanding its freight network, adding Stockholm and Toronto to bring to 30, the number of destinations served. 2x-weekly service to Stockholm will commence September 17 as an extension of its Munich service. The Toronto flight begins September 20 and will be a 3x-weekly extension of the service to New York. In May, (CAT) launched cargo flights to Chennai.

(CAT) exercised 2 of its 20 purchase rights for 777-300ERs for delivery in 2008. Late last year, Cathay (CAT) ordered 16 777-300ERs plus the purchase rights. The 1st airplane will be delivered in September 2007. They will be powered by (GE90-115B)s.

July 2006: Cathay Pacific Airways (CAT) flew 6 billion (RPK)s passenger traffic in June, a +14.1% increase over the year-ago month. Capacity rose +10.4% to 7.24 billion (ASK)s, lifting load factor +2.7 points to 82.8% LF.

(CAT) applied to the Hong Kong SAR government for rights to resume passenger flights to Shanghai, add additional flights to Beijing, and increase cargo operations to China in the 4th quarter. The move comes as a result of a recent agreement between Chinese and Hong Kong authorities that expands air services, giving Cathay (CAT) the opportunity to return to Shanghai after 16 years. Shanghai accounts for 35% of the passenger traffic and 68% of the cargo market between China and Hong Kong. According to a statement from Hong Kong authorities, each side can designate three airlines to operate passenger and/or cargo flights and an additional carrier to operate all-cargo flights on most of the 45 routes designated starting from winter 2007. Capacity limits also will be raised or eliminated.

(CAT) signed a $1 billion, 20-year OnPoint Solutions service agreement with (GE) covering Maintenance Repair & Overhaul (MRO) of 40 (GE90-115B) engines on 777-300ERs. It has ordered 18 of the type, the 1st of which is scheduled to enter service in September 2007.

777-367 (34244, B-HNQ), delivery.

August 2006: Cathay Pacific Airways (CAT) flew 6.43 billion (RPK)s passenger traffic in July, a +7.4% increase over the year-ago month. Capacity rose +6.6% to 7.59 billion (ASK)s, lifting load factor +0.6 point to 84.6% LF.

(CAT) reached a codeshare agreement with Comair (CML) (South Africa) under which it will place its code on Comair (CML) flights from Johannesburg to Cape Town, Durban and Port Elizabeth from September 1. (CAT) operates daily Hong Kong -Johannesburg flights.

(CAT) will launch a 4th weekly Hong Kong Dallas/Fort Worth - Atlanta 747-400F flight from August 7.

Unisys Corp signed a 3-year contract with (CAT) to host its core business applications. Unisys will move (CAT)'s reservations, departure control and cargo platforms to the Unisys data center in Rhodes. The multimillion-dollar deal includes a 2-year option.

Air China (BEJ), (CAT), China National Aviation Co and (CITIC) Pacific shareholders, approved the proposed realignment that would establish cross-shareholdings between (BEJ) and (CAT) and make (DRG) a (CAT) subsidiary. The long-anticipated deal, announced in June, must receive regulatory approval. (BEJ) ChairmanLi Jiaxiang said the realignment will "create a potent new force in the airline industry."

(CAT) starting putting its stamp on (DRG), appointing Kenny Tang as (CEO) designate of the Hong Kong carrier a day after shareholders of the involved companies approved (CAT)'s takeover. Tang replaces Stanley Hui, who resigned earlier in the day. Tang joined (CAT) in 1979 and became General Manager Corporate Finance in 1994, (COO) of Air Hong Kong (AHK) 3 years later and Generla Manager Cargo for (CAT) in 2000. He was seconded to Swire Pacific 2 years ago as Managing Director of Taiwan's Taikoo Motors. He said he will "certainly focus on maximizing the synergies and opportunities that arise with Dragonair (DRG) linking its Mainland services with (CAT)'s international network." Hui departs (DRG) August 29 after >9 years. His aggressive building of the airline's network occasionally came at the expense of (CAT) and he fought in Hong Kong courts to keep (CAT) off routes into China, a stand that was not expected to sit well with the (CAT) board.

(CAT) took delivery of its 100th airplane, an A330-300, in Toulouse. The airplane is painted in a commemorative livery and joins 26 of the type in the (CAT) fleet. A further 5 will be delivered through 2008.

A330-343X (776, B-LAD), delivery.

September 2006: Cathay Pacific Airways (CAT) flew 6.26 billion (RPK)s passenger traffic in August, up +5.6% from the year-ago month. Capacity increased +3.9% to 7.53 billion (ASK)s, lifting load factor +1.3 points to 83.1% LF.

(IATA) and (CAT) warned that urgent attention is needed to relieve air traffic congestion in the burgeoning Pearl River Delta region, noting that the crowding is capping movements at Hong Kong International Airport at 53 per hour instead of a potential 75.

Speaking at an Aerospace Forum Asia lunch in Hong Kong, (IATA) Director General & (CEO) Giovanni Bisignani said the congestion is costing airlines HK$1 million/$128,461 per day.

(CAT) (CEO) Philip Chen added that "(CAT) has become a victim of its own success." It has upped its total fleet from 58 in 1997 to 100 currently and expects to have 135 planes in operation by 2010, not counting (DRG) and Air Hong Kong (AHK) fleets.

(CAT) used the occasion of its 60th anniversary celebration in Hong Kong to unveil a radical upgrade of its first (F), business (C) and economy class (Y) products. New economy (Y) seats, set in a slight recline position that cannot be moved, aim to establish a new standard for the industry. By pushing a button, passengers can move the seat cushion forward and the seatback cushion down, producing greater recline than conventional seats. Passengers get more legroom because magazine holders have been moved from seatbacks to the front of the seat beneath travelers' knees.

(CAT) has retained its 32 inch/33-inch seat pitch in economy (Y). It also has added larger video screens for economy passengers and seats now feature shoulder belts for use during takeoff and landing. In business class (C), Cathay (CAT) has attempted to improve on Virgin Atlantic (VAA)'s herringbone lie-flat bed concept by installing "softer" beds and 15-inch video screens for each seat. It said its upgraded first class (F) cabins will feature the largest bed in airline service. Rollout of the new cabin features will start early next year.

(CAT) announced that, subject to government approvals, it will resume nonstop service from Hong Kong to Shanghai on December 1st. (CAT) will operate a daily flight using a mix of A330-300s and A340-300s.

October 2006: (CAT) is an international airline, based and registered in Hong Kong, offering scheduled cargo and passenger services to >90 destinations in Africa, Asia, Australasia, Europe, Middle East, and North America.

15,040 employees.

(IATA) Code: CX - 160. (ICAO) Code: CPA (Callsign - CATHAY).

Owns: Air Hong Kong (AHK) (60%); Dragonair (DRG) (17.79%); & Air China (BEJ) (10%).

Alliances: OneWorld; Aeroflot Russian Airlines (ARO); Japan Airlines International (JAL); Malaysia Airlines (MAS); Philippine Airlines (PAL); South African Airways (SAA); & Vietnam Airlines (VIE).

Main Base: Hong Kong International (HKG).

International, scheduled destinations: Adelaide; Amsterdam; Auckland; Bahrain; Bangkok; Barcelona; Brisbane; Cairns; Cebu; Colombo; Delhi; Denpasar Bali; Dubai; Frankfurt; Fukuoka; Hanoi; Ho Chi Minh City; Jakarta; Johannesburg; Karachi; Kuala Lumpur; London; Los Angeles; Madrid; Manchester; Manila; Melbourne; Moscow; Mumbai; Nagoya; New York; Osaka; Paris; Penang; Perth; Riyadh; Rome; San Francisco; Santiago de Compostela; Sapporo; Seoul; Singapore; Surabaya; Sydney; Taipei; Tokyo; Toronto; & Vancouver.

SR Technics (SWS) reached a 5-year deal with (CAT) for the remaining 18 (CFM56-5C)s in (CAT)'s fleet. The companies already had a contract covering 49 engines of the same type powering A340-300s running until 2013. (SWS) will provide Maintenance Repair & Overhaul (MRO) on the engines out of its Zurich service center.

(CAT) announced the donation of its 64.7 million shares in China National Aviation Co (CNAC) to 64 charities in Hong Kong, 6 in China and 1 pan-Asian organization under terms of the Hong Kong Takeovers Code that forbids the carrier from exercising its votes in (CNAC)'s privatization. "During the transaction process we found ourselves facing a difficult regulatory problem which had a very agreeable solution," (CAT) (CEO) Philip Chen said. (CAT) said its (CNAC) stake is valued at >HK$181 million/$23.3 million.

(CAT) will launch a 2x-weekly 747-200F freighter service to Beijing on November 15. Flights will depart Hong Kong on Wednesdays and Thursdays. (CAT) currently operates 14x-weekly passenger service to Beijing and a 12x-weekly cargo service to Shanghai.

November 2006: Cathay Pacific Airways (CAT) flew 6.02 billion (RPK)s passenger traffic in October, a +9.1% increase from the year-ago month. Capacity rose +4.8% to 7.58 billion (ASK)s, lifting load factor +3.1 points to 79.4% LF.

1st 9 months = 52.98 billion passenger traffic +10.1% (RPK), 5.14 billion freight traffic +7.4% (FTK), 12.45 million passengers +8.8%.

China Aircraft Services (CASL), a joint-venture owned by China National Aviation Corporation (CNAC) and Hutchison Whampoa, plans to expand its line maintenance business into India and the Middle East in the next few years to capture growth opportunities in those regions, said Managing Director Angus H W Cheung. The company, is also investing HK$300 million to build a maintenance hangar at Hong Kong International Airport.

China National Aviation Corporation (CNAC) (Group) owns 40% of (CASL), while Hutchison Whampoa, United Airlines (UAL) and China Airlines (CHI) each own 20%.

(CASL) initially offered base maintenance services to airlines, but is exploring ways to expand its existing line maintenance services to customers. Base maintenance work includes modifications, repair and overhaul of commercial airplanes and components, while line maintenance includes services provided during transit periods and routine turnarounds.

"(CASL) was concentrating on line maintenance services, but we are now looking at more opportunities for base maintenance business to expand our service portfolio," Cheung said.

(CASL), which is the 2nd largest airplane maintenance company in Hong Kong, after (HAECO) (CAT) with a 30% market share, signed a new agreement with Airport Authority Hong Kong, late September, for a franchise providing airplane line and base maintenance services for 25 years from 2008.

New facilities being built at the airport, allows 2 wide-bodied commercial airplanes to be serviced at the same time.

Cheung said potential new business could boost (CASL)'s sales by +30% in the 1st year.

After North America and Europe, the next largest market is Asia-Pacific. Cheung said maintenance, repair and overhaul (MRO) spending in China alone is expected to grow +70.6% to US$2.9 billion/HK$22.62 billion by 2015. "Base maintenance is a big business in itself. Many operators are in the same business and the competition is fierce in the region," Cheung said.

(CASL) has 30 airlines, but Cheung would not disclose how much revenue is generated from major shareholders.

He said the company would seek new clients, since more revenue could be generated by airlines that are not its shareholders. The company owns a joint-venture in Shanghai Pudong International Airport, which provides maintenance services. It has no plans to expand in China.

Cathay Pacific will increase the frequency on its Hong Kong to Cairns route from 4x- to 6x-weekly on January 1st. The 2 nonstop flights operated on Wednesdays & Saturdays will get an additional frequency on Mondays from January 1st, the 2 direct flights via Brisbane operated on Tuesdays & Fridays will get an additional frequency on Thursdays from January 4th, all operated with A330s.

Cathay Pacific Airways (CAT) will expand its all-cargo Hong Kong - Shanghai flights to 17x-weekly from 12 currently on December 2 and to 18x-weekly on January 5 aboard 747Fs. Pacific Director & General Manager - Cargo, Ron Mathison said the added flights "will enable us to get further leverage on the Eastern China market as demand remains high."

December 2006: Cathay Pacific Airways (CAT) flew 5.84 billion (RPK)s passenger traffic in November, a +7.7% increase from the year-ago month. Capacity grew +4.4% to 7.42 billion (ASK)s and load factor was up +2.4 points to 78.7% LF.

(CAT) and Dragonair (DRG) entered into a comprehensive codeshare agreement resulting from the recent integration of the 2 carriers. It applies to 7 cities and took effect from December 1 on all flights from Hong Kong to Shanghai, Beijing, Xiamen, Tokyo and Kota Kinabalu. It also will apply to 2 new Dragonair (DRG) destinations: Phuket from December 15 and Busan from January 19. Dragonair (DRG) became a wholly owned subsidiary of (CAT) on September 28.

Oneworld (ONW) announced that it will welcome (DRG) next year following (DRG)'s merger with Oneworld founding member, (CAT). "All parties are committed to bring (DRG) on board (ONW) as soon as possible in 2007, immediately all necessary joining technicalities and processes have been completed," (ONW) said. (DRG) will be the 11th carrier set to join (ONW) next year alongside Japan Airlines (JAL) and 5 affiliates, Malev Hungarian Airlines (HGA), Royal Jordanian (RJA), (LAN) Argentina (LNR) and (LAN) Ecuador. Aer Lingus (ARL) is scheduled to leave the alliance in April. The addition of (DRG) will strengthen Oneworld (ONW)'s position in China as it serves 19 mainland destinations with 400 weekly flights. 12 will be new markets for the alliance, nearly doubling its Chinese penetration to 22 destinations.

1 747-412 (27133, B-HKJ), bought from Singapore Airlines (SIA). 6 orders (5/08) 747-400ERFs. +2 orders (1/08) 777-300ERs.

January 2007: Cathay Pacific Airways (CAT) flew 6.33 billion (RPK)s passenger traffic in December, a +4.6% increase over the year-ago month. Capacity climbed +3.3% to 7.8 billion (ASK)s and load factor rose +1 point to 81.2% LF.

China's two top cargo airlines, Air China Cargo (CAO) and China Cargo Airlines (CKK), are set to merge before yearend in a bid to strengthen China's market share over foreign carriers, which currently control about two thirds of the country's air cargo volume. The two cargo airlines, which are affiliated with Air China (BEJ) and China Eastern Airlines (CEA), will merge into one company based in Shanghai, the country's economic hub, under the "China Cargo"'s name. The joint company will be a 50 - 50 venture between (BEJ) and (CEA).

Later, Air China (BEJ) reportedly is planning to set up a Shanghai-based cargo joint venture with Cathay Pacific Airways (CAT). "We are now preparing for the joint venture program and hope to realize practical progress in the cargo business partnership with Cathay (CAT)in the first half of 2007," VP, Fan Cheng said. "How to significantly improve our cargo transport capabilities is an important task for Air China (BEJ) in 2007," he added. He said long-running attempts to reach a similar agreement with China Eastern Airlines (CEA) had failed.

(ARINC) signed a contract with Cathay Pacific Airways (CAT) to provide an Iridium-based voice telephone solution for seven (CAT) 747-200F freighters. (CAT) is the Iridium service's first commercial airline customer.

(DHL) said it will invest an additional $35 million in its Hong Kong operation to increase ground handling capabilities in the growing market, lifting its total investment in the city to $645 million, which includes a $400 million investment in Air Hong Kong (AHK) made in conjunction with Cathay Pacific Airways (CAT).

February 2007: Cathay Pacific Airways (CAT) flew 6.62 billion (RPK)s passenger traffic in January, down -0.1% from the year-ago month. Capacity rose +1.8% to 8.6 billion (ASK)s, dropping load factor -1.4 points to 77% LF. (CAT)'s traffic now includes Dragonair (DRG).

Rockwell Collins (RC) said Cathay Pacific Airways (CAT) will install (RC)'s Airshow 4200D moving map and inflight information system on five A330s and 18 777s, with an option for an additional 20 line fit airplanes. Installation is scheduled for July.

MTU Maintenance signed an open-ended contract with Cathay Pacific Airways (CAT) for Maintenance Repair & Overhaul (MRO) on 15 (CF6-50E2)s powering 747-200Fs. Work will be performed at Hannover Langenhagen. MTU Hannover, named Uwe Blocker, President & CEO, effective March 1.

March 2007: Cathay Pacific Airways (CAT) together with Dragonair (DRG) flew 5.88 billion (RPK)s in February, up +2.2% from the year-ago month. Capacity climbed +3% to 7.79 billion (ASK)s, dropping load factor -0.5 point to 75.5% LF.

Cathay Pacific Airways (CAT) continued to consolidate its position in Asia last year, by purchasing low-cost rival Dragonair (DRG), firming up its relationship with Air China (BEJ), and posting a profit attributable to shareholders of +HK$4.09 billion/+$523.4 million, an increase of +24% over earnings of +HK$3.3 billion in 2005. The airline said it was able to limit the impact of a +29.7% increase in fuel costs with a +19.4% rise in revenue to HK$60.78 billion, fuel surcharges, a slight lift in yield, and a -1.3% drop in cost per (ATK), excluding fuel to HK$1.53 (excluding Dragonair (DRG)). "We expect competition to remain keen in 2007 and the high, volatile fuel price will continue to have a major impact on our business," (CAT) Chairman, Christopher Pratt said. "We will work to optimize the significant commercial opportunity provided by our purchase of Dragonair (DRG)." (CAT) does not release quarterly results, but did say that Dragonair (DRG) posted a +HK$28 million profit in the three months ended December 31. Cathay (CAT)'s expenses climbed +18.8% to HK$55.6 billion, and operating profit rose +25.9% to HK$5.2 billion. Passenger numbers were up +8.4% over 2005 to 16.7 million. Traffic measured in (RPK)s was not provided, but (CAT) did say that (ASK)s increased +7.7% to 89.12 billion and load factor improved +1.2 points to 79.9% LF. It added an A330-300 and a 777-300 to its fleet in 2006. Passenger yield grew +1.5% to HK$0.47 and cost per (ATK) lifted +0.9% to HK$2.21. All figures exclude Dragonair (DRG).

(CAT) also carried a record 1.2 billion tonnes of freight and enjoyed a +3.4% rise in cargo revenue to HK$11.98 billion.

Cathay Pacific Airways (CAT) CEO, Philip Chen will step down effective July 1, to lead Swire Pacific's China investment strategy as Chairman of John Swire & Sons (China), Swire and (CAT) announced. Chen will be replaced as CEO by COO Tony Tyler, who has been with the airline since 1978. Chen will remain on the board as Non-Executive Deputy Chairman. "The appointments open up new horizons for me to help drive the group forward in areas that hold the greatest potential," he said. Swire Pacific Executive Director & Swire Beverages Managing Director, John Slosar will succeed Tyler as COO.

Cathay Pacific Airways (CAT) increased freighter service to Europe to 36 weekly flights from 25. Flights to Frankfurt via Dubai operate 11-times-weekly, up from six. The remaining six additions will operate on the Hong Kong - Dubai - Manchester - Amsterdam - Dubai - Hong Kong route. Amsterdam is a new (CAT) freighter destination.

April 2007: Air China (BEJ) unveiled details of the new cargo airline it plans to operate in partnership with Cathay Pacific Airways (CAT), to be based on the existing China Cargo Airlines (CKK) that flies out of Beijing. The new carrier, in which (BEJ) will hold a 51% stake, is scheduled to launch in June, and will hub in Shanghai. (BEJ) currently holds 51% of (CKK), while Citic Pacific and Beijing Capital Airport Group have stakes of 25% and 24% respectively. "We are discussing with Citic Pacific and Beijing Capital Airport Group on how to cede their shares in China Cargo Airlines (CKK). They can either hold (BEJ)'s shares in exchange or sell their stakes in cash," (BEJ) Planning & Development Department Deputy Director, Hu Pengbin said.

There is widespread speculation that Cathay (CAT) will invest in cargo airplanes for its 49% stake in the new carrier, but that is just one option, (BEJ) noted. Last year, (CAT) introduced two 747-400BCFs and posted record cargo revenue of HK$11.98 billion/$1.53 billion. The cargo venture is said to be an important part of (BEJ)'s strategy to build Shanghai as a hub, which involves expanding international services and integrating a subsidiary from nearby Zhejiang Province into a new company employing approximately 1,000 people to control its business in the Yangtze Delta region, according to (BEJ) VP, Yang Lihua. It intends to establish a cargo station at (PVG) capable of processing 1.2 millions tons each year.

Honeywell will provide its RDR-4000 next generation windshear/weather radar system, Qantaum com/nav radios, (TCAS)/Mode S, solid-state (FDR), 2-hour solid-state (CVR) and emergency locator unit to Cathay Pacific Airways (CAT) for use on 18 firm and 18 option 777-300ERs. Value of the contract good through 2014 is $35 million.

Lufthansa Technik (DLH) (LTK) and Cathay Pacific Airways (CAT) signed a 10-year Total Engine Support contract under which (LTK) will serve 15 (CAT) (PW4056-3) powered 747-400s, including six spares. The companies said they are in "final preparations" for another deal covering (PW4062)s on six new 747-400ERFs set to arrive in May 2008.

May 2007: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew a combined 6.64 billion (RPK)s passenger traffic in April, a +2.3% increase on the year-ago month. Capacity rose +1.2% to 8.26 billion (ASK)s and load factor was up +0.9 point to 80.4% LF.

PROS said it successfully has deployed its O&D revenue management suite at Cathay Pacific Airways (CAT).

Nordam Group and Spirit AeroSystems reached agreement with Cathay Pacific Airways (CAT) to provide overhaul services and spares support for (Trent 800) thrust reversers.

June 2007: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew a combined 6.35 billion (RPK)s passenger traffic in May, up +1.1% from the year-ago month. Capacity climbed +1% to 8.46 billion (ASK)s and load factor rose +0.1 point to 75.1% LF.

The Nordam Group was chosen by Cathay Pacific Airways (CAT) to provide "a comprehensive repair and support network" for thrust reverser pivot door modifications on its fleet of (Trent 700)s powering 43 A330s operated by Cathay (CAT) and Dragonair (DRG). Agreement covers tooling and repair design, program logistics and management of the supply chain.

July 2007: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 6.67 billion (RPK)s passenger traffic in June, up +1.4% from the year-ago month. Capacity climbed +1.5% to 8.23 billion (ASK)s and load factor slipped -0.1 point to 81% LF.

2 747-412s (27069, B-HKU), RBS Aerospace leased & (26552, B-HKV), Babcock (BBB) leased; A330-343E (850, B-LAE), delivery.

August 2007: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew a combined 7.26 billion (RPK)s passenger traffic in July, up +2.2% from the year-ago month. Capacity rose +0.8% to 8.59 billion (ASK)s and load factor improved +1.1 points to 84.6% LF.

The addition of Dragonair (DRG) accounts into Cathay Pacific (CAT)'s books, along with higher yields and robust demand, helped the Hong Kong-based airline group lift its profit attributed to shareholders for the six months ended June 30, by +54.7% to +HK$2.58 billion/+$329.57 million from +HK$1.67 billion in the year-ago semester. Group turnover rose +27.9% to HK$34.63 billion, and expenses climbed +25.2% to HK$26.29 billion. Operating profit was up +50.7% to +HK$3.19 billion, compared to +HK$2.12 billion. Dragonair (DRG) became a wholly owned subsidiary of the (CAT) Group last fall.
"This is a strong result, with record figures posted despite the impact of the drop in cargo demand and the continued impact of high fuel prices. The Group is in good shape at the moment, and we are now seeing clear benefits resulting from the acquisition of Dragonair (DRG)," Chairman, Christopher Pratt said.

The two airlines carried a combined 11 million passengers during the semester, with a load factor of 78.1% LF, and yields of HK$0.537. Cathay Pacific (CAT)'s load factor rose +0.5 point to 79.6% LF, as passenger numbers climbed +4.1% to 8.5 million, and yield increased +10.9% to HK$0.508, mainly as a result of "strong demand" from first (F) and business class (C) passengers.

(CAT)'s freight load factor fell -1.4 points to 66.3% LF, and yield dropped -8.3% to HK$1.55. "We see the downturn in cargo as short term and remain confident in the future of Hong Kong's airfreight industry," Pratt said. The company has submitted a formal bid for the third cargo terminal at Hong Kong airport (HKG), which Pratt said is "crucial to Hong Kong's future competitiveness as an airfreight hub."

(CAT) plans to take delivery of its first five of 23 777-300ERs from September through December and plans to install its new long-haul product on 15 airplanes by year end. "The second half results should benefit from the additional capacity, although higher fuel prices would have a negative effect," Pratt said.

(CAT) announced an increase in its Japanese service. It will operate a sixth daily Hong Kong - Tokyo Narita (NRT) flight from October 28 and applied to codeshare on new Dragonair (DRG) services to Fukuoka (daily) and Sendai (thrice-weekly), also from October 28. Dragonair (DRG) will cease operating its daily (NRT) flight.

Amadeus announced a 10-year deal with Cathay Pacific Airways (CAT) under which (CAT) and Dragonair (DRG) will adopt the complete Altea Customer Management Solution to manage reservations, inventory and departure control.

Cathay Pacific Airways (CAT) exercised options on five (GE90-115B)-powered 777-300ERs, increasing its commitment to the model to 23 airplanes. The conversion is part of (CAT)'s December 2005 order for 16 (with 12 directly purchased from Boeing (TBC) and four leased from ILFC (ILF)) plus 20 options. Last year, it exercised rights for two more airplanes. Its first 777-300ER will be delivered next month, and it will have five by year end. They will be introduced on the Hong Kong - New York (JFK) route from November 1.

September 2007: Cathay Pacific Airways (CAT) will increase Hong Kong - Sydney service to 25-times-weekly from 21 beginning February 1. Flights are aboard A330-300s.

Cathay Pacific Airways (CAT) abruptly backed away from its proposed bid to buy a stake in China Eastern Airlines (CEA), that could have trumped the share sale agreement between (CEA) and Singapore Airlines (SIA). (SIA) and its parent, Temasek earlier this month agreed to purchase 15.7% and 8.3% stakes respectively in (CEA), but the deal has not yet been approved by (CEA) shareholders. Cathay (CAT) requested the suspension of trading of its shares on the Hong Kong Stock Exchange "pending the announcement of a proposed transaction." Widespread reports speculated that (CAT) and Air China (BEJ) were preparing to invest $4 billion jointly in (CEA). But (CAT) issued a statement saying the purchase of (CEA) shares "will not now proceed." It offered no explanation for why it backed away from the deal, and said its shares will begin trading again. Air China (BEJ) said in a statement it would make no offer for (CEA) shares for at least "the next three months."

777-367ER (36154, B-KPA), delivery.

October 2007: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew a combined 6.57 billion (RPK)s passenger traffic in September, up +5.2% from the year-ago month. Capacity rose +0.6% to 8.32 billion (ASK)s, and load factor was ahead +3.4 points to 79% LF.

Cathay Pacific Airways (CAT) will start a second-daily Hong Kong - San Francisco flight October 18 aboard a 777-300ER.

(CAT) placed its first 777-367ER into service between Hong Kong and Seoul Incheon. The first of 23 ordered by (CAT) will transition to long-haul routes next month and is scheduled to fly to New York (JFK) on November 15, expanding the route into a thrice-daily service. (CAT) will take a total of five 777-367ERs this year, five in both 2008 and 2009, three in 2010 and five in 2011. It currently operates 89 passenger airplanes and 19 freighters.

Despite its abrupt withdrawal from the deal to purchase a major stake in China Eastern Airlines (CEA) in conjunction with Cathay Pacific Airways (CAT) last month, Air China (BEJ) still is considering a merger and will evaluate its options over the next three months, President, Li Jiaxiang told reporters after attending the Communist Party of China's national congress in Beijing. Li explained that (BEJ) backed off the (CEA) deal with (CAT), because China Eastern (CEA)'s share value was too high. That deal would have trumped an agreement reached earlier in September, under which Singapore Airlines (SIA) and parent Temasek agreed to purchase 15.7% and 8.3% stakes respectively in (CEA).

Industry analysts noted that Shanghai's importance as an aviation hub was the driver behind the (BEJ)/(CAT) bid for a major stake in (CEA) in competition with (SIA). Approximately 50% of China's total passenger volume and 70% of cargo volume pass through the Yangtze River Delta Region centered on Shanghai. (CEA) currently has a 36% share of the Shanghai market, while (BEJ) holds 12%, and (CAT) with Dragonair (DRG) have 4%. "We will never give up on the Shanghai market as it plays a significant role in our strategy and we can expand our Shanghai market share in many ways," (BEJ) Board Secretary, Huang Bin said. He noted that (BEJ) is moving forward with its plan to launch a Shanghai-based joint venture cargo carrier with Cathay (CAT).

2 777-367ERs (34432, B-KPC; 35299, B-KPB), (ILF) leased.

November 2007: Dragonair (DRG) officially joined Oneworld (ONW), becoming the alliance's 11th member carrier. Its affiliation will add 15 new destinations to the Oneworld (ONW) network, including 12 in mainland China. "Our strong market presence in the mainland will give passengers greater access to this fast-growing market, and at the same time, we can help people connect with our growing network of niche destinations around the region," CEO, Kenny Tang said. Dragonair (DRG), now part of the Cathay Pacific (CAT) Group, operates 31 passenger airplanes and seven freighters to 33 destinations, including 21 in mainland China.

Oneworld (ONW) members (CAT), British Airways (BAB), and Qantas (QAN) opened the first airport lounge developed as an "alliance project" in Los Angeles International Airport's international terminal. Passengers flying Japan Airlines (JAL) or (LAN) Airlines (which operate from that terminal), and elite members of other alliance carriers, will have access to the 1,360-sq-m facility. American Airlines (AAL) maintains its own lounge in Terminal 4.

Seven cargo airlines working in conjunction with (IATA) (ITA) and freight forwarders, initiated e-freight pilot programs on a number of selected trade routes. The airlines are Air Canada (ACN), British Airways (BAB), Cathay Pacific (CAT), (KLM), Martinair (MTH), (SAS), and Singapore Airlines (SQC). Cargo on key trade routes connecting the countries represented by the carriers, will be processed electronically. "The paper-free era for airfreight begins," (IATA) (ITA) Director General & CEO, Giovanni Bisignani said. "This first wave of pilots will pave the way for a global rollout of e-freight that will eliminate the paper that costs this industry $1.2 billion every year. Combined, these documents could fill 39 747F cargo freighters each year, making e-freight a win for the business and for the environment." Participating freight forwarders in the e-freight pilot program are (DHL) Global Forwarding, Panalpina, Kuehne+Nagel, Schenker, TMI Group-Roadair, and Jetspeed. The potential impact of the increased efficiency in air cargo is expected to have "very broad implications across the global economy," Bisignani claimed. (AFA)/(KLM) said that based on its "experiences at [Amsterdam] Schiphol, we hope to introduce e-freight shipments on the [Paris] Charles de Gaulle network at a later stage" and that it is targeting 50% e-freight penetration on "important trade lanes" within five years.

Cathay Pacific Airways (CAT) CEO, Tony Tyler said the airline is not close to making any decision on acquiring A380s, 787s or A350 XWBs, noting that orders placed today likely would mean deliveries not occurring for five years or longer. "I don't think we are comfortable ordering that far ahead on a new airplane type," he told "Reuters." "I don't think we'll be making any decision on any of these airplanes for at least two years . . . All our financial modeling shows that we are better off offering more frequency with a very efficient airplane like the 777, than simply adding more capacity to an existing frequency, which is what we would do, if we introduced the A380." Airbus (EDS) CCO, John Leahy said this week in India that if an A380 order were placed in the immediate future, first delivery by 2011 is possible.

Cathay Pacific Airways (CAT) placed an order for 10 747-8F freighters and seven additional 777-300ERs, collectively valued at $5.2 billion.
(CAT) already had 19 777-300ERs on order and has committed to leasing four more of the type through a third party, making it Asia's largest 777-300ER customer. It becomes the eighth airline to order the 747-8F; Boeing (TBC) said it now has firm orders for 73 of the type. (CAT) currently operates 19 747F freighters, a combination of 747-200Fs, 747-400Fs, and 747-400BCFs. The 747-8Fs will replace seven -200Fs, that will be phased out, the carrier said. It has six additional 747-400ERFs and two additional 747-400BCFs on order. The 777-300ERs ordered will be powered by (GE90-115B)s, while the 747-8Fs will use (GEnx-2B67)s. Delivery dates for the airplanes were not disclosed. "These orders highlight our long-term confidence in the future of both the cargo and passenger markets in Hong Kong, and confirm our commitment to developing our home city as one of the world's premier aviation hubs," (CAT) CEO, Tony Tyler said. "We are very excited about the 747-8F freighter, which provides the highest payload of any commercial freighter. More importantly, this is a highly fuel-efficient airplane, which consumes -22% less fuel per revenue payload tonne than a 747-200F and -12% less than a 747-400F. Similarly, the 777-300ER is -22% more fuel-efficient than a 747-400 per payload tonne." He added that efficiency is critical in "environmentally sensitive times, and when fuel prices are at record highs."

(CAT) received its first 777-300ER in September and plans to use the type to operate nonstop routes to North America and Europe, according to Boeing (TBC). The 747-8F "offers +16% more revenue cargo volume than the 747-400F, with slightly greater range, accommodating four additional main-deck pallets and three additional lower-hold pallets," Boeing (TBC) said.

Cathay (CAT) stated it is not ready for the A380.

777-367ER (36155, B-KPD), delivery.

December 2007: Airbus (EDS) announced creation of the Airbus (EDS) Maintenance Training Network designed to extend its Maintenance Repair & Overhaul (MRO) Network and simplify access to its training courses. Contracts with major training providers, include Hong Kong Aircraft Engineering Co Ltd (HAECO) (CAT), Iberia (IBE) Maintenance & Engineering, (SIA) Engineering Co, Sogerma Training, and SR Technics (SWS), according to the airplane manufacturer. Computer assisted training, Virtual Aircraft, and the Airbus (EDS) active learning and competence focused training concept, are some of the learning tools available.

Cathay Pacific Airways (CAT) announced an agreement with its Flight Attendants (CA) Union on adjustments to the company's medical plan, ending threats of a work stoppage during the Christmas/New Year period.

Cathay Pacific Airways (CAT) placed an order for eight A330-300s to be delivered in 2010 to 2012, Airbus (EDS) and Rolls-Royce (RR) announced. The (Trent 700)-powered airplanes will join a fleet of 48 A330-300s operated by (CAT) and Dragonair (DRG), including three leased airplanes scheduled for delivery next year. Both carriers will receive new planes. Rolls (RR) said the engine order was worth approximately $280 million at list prices.

777-367ER (36156, B-KPE), delivery.

January 2008: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7.61 billion (RPK)s passenger traffic in December, up +10.5% from the year-ago month. Capacity rose +8.6% to 9.43 billion (ASK)s and load factor lifted +1.4 points to 80.8% LF.

2007 statistics: 81.8 billion (RPK)s passenger traffic +14.9%; +15% capacity (ASK)s; no change on load factor for 79.8% LF. SEE ATTACHED COMPARISON CHART TO SELECTED OPERATORS - "CAT-2007-STATS."

Air China (BEJ) plans to raise its stake in Air China Cargo (CAO) to 76% from 51%, in order to pave the way for its joint venture with Cathay Pacific Airways (CAT). According to a (BEJ) statement, it will acquire the share through the purchase of Gold Leaf Enterprise Holdings' stake in Air China Cargo (CAO) shareholder Langxing Co. Beijing Capital Airport holds the remaining 24%, and is in negotiations with (BEJ) about a sale, that would make the country's largest cargo carrier the flag carrier's wholly owned subsidiary. "So far, 70% of (BEJ)'s cargo business comes from passenger airplane's belly freight, and the scattered shareholding structure of Air China Cargo (CAO) doesn't do any good to our cargo business in the long run," (BEJ) Board Secretary, Huang Bin explained. He also noted that (BEJ) is advancing talks with Cathay (CAT) regarding when and how to launch the cargo Joint Venture (JV).

Air China Cargo (CAO) currently operates four 747-200F freighters and eight 747-400 combis. It also markets the belly space on 60 (BEJ) passenger airplanes. It posted a net loss of -CNY300 million/-$41.1 million in the first six months of 2007, but began to make a turnaround in August. It is expected to earn a profit in 2008.

Airlines throughout the world are contending with antitrust charges made at the end of 2007 by the European Commission (EC), which has accused at least 11 and as many as 25 carriers of "cartel" activity relating to airfreight transport. In addition to British Airways (BAB), Japan Airlines (JAL), Air France (AFA)/(KLM), (SAS) Group, and Cargolux (CLX) (all of which confirmed receipt of statements of objections from the (EC) before Christmas).(ANA), Air New Zealand (ANZ), Air Canada (ACN), Cathay Pacific Airways (CAT), (LAN) and Singapore Airlines (SIA) have admitted to being charged.

Cathay (CAT) said it is "carefully reviewing the statement of objections with our internal and external counsel and will make a timely response to it." It noted that it has "always supported fair competition, and remains committed to compliance to all applicable competition laws."

Carriers charged late last year, have two months from the receipt of statements of objections to respond in writing to the (EC) and also have the option of requesting a formal hearing. An airline found guilty or admitting to guilt can be fined up to 10% of its annual revenue.

777-367ER (36832, B-KPF), delivery and A330-342 (895, B-LAG), (ILF) leased.

February 2008: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7.79 billion (RPK)s passenger traffic in January, up +17.8% on the year-ago month. Capacity rose +10.2% to 9.47 billion (ASK)s, lifting load factor +5.3 points to 82.3% LF.

China Eastern Airlines (CEA) continues to press on in its effort to reach a deal with Singapore Airlines (SIA) and plans to cooperate with (SIA) parent, Temasek to fashion terms that will be acceptable to minority shareholders, who vetoed the sale of a 24% stake last month. (CEA) is preparing for the second minority shareholders conference even though it has yet to reach a revised deal with (SIA)/Temasek. The latter recently confirmed that it will work with (CEA) to win over minority shareholders. (SIA) repeatedly had said it would not raise its offer.

Meantime, the Shanghai-based carrier noted that it has made no progress with Air China (BEJ) parent, (CNAC), which presented its own offer for (CEA), that trumped (SIA)'s. Cathay Pacific Airways (CAT), a close ally of (BEJ), offered its support to the bid earlier this week. According to the "Financial Times," (CAT) CEO, Tony Tyler said his airline wanted to avoid any dilution of its 17.5% cross-shareholding with Air China (BEJ), which would occur "if they were to issue a load of shares in order to buy China Eastern (CEA) or a big chunk of (CEA)." He also said that better management would have little difficulty in turning (CEA) around.

Later, Cathay Pacific Airways (CAT) raised its stake in Air China (BEJ) from 17.5% to more than >18% through the February 6 purchase of 15 million "H" shares, according to a statement released by the Hong Kong Stock Exchange last week. (BEJ) Board Secretary, Huang Bin noted that Cathay (CAT) may want to avoid any dilution of its cross-shareholding in (BEJ), as the latter plans to circulate 400 million additional "A" shares to raise funds for the acquisition of 54 airplanes. That purchase is awaiting approval from the China Securities Regulatory Commission. Cathay (CAT)'s holding in (BEJ) cannot exceed >20% under the terms of the agreement between the carriers. Huang ruled out the possibility that (CAT)'s purchase is related to (BEJ)'s bid for China Eastern Airlines (CEA), but (CAT) CEO , Tony Tyler said that his airline will help fund (BEJ)'s effort to beat out Singapore Airlines (SIA) for a strategic stake in (CEA). Industry analysts speculated that the share purchase has more of a symbolic significance to (CAT), as it bought the stock on the market rather than directly from (BEJ), which did not benefit financially from the transaction. However, by raising its stake in (BEJ), (CAT) sent a signal that it will stand by its promise to help the carrier in its bid for (CEA).

Later again, China Eastern Airlines (CEA) formally rejected Air China (BEJ)'s bid to raise its stake in the Shanghai-based airline from 12% to just over 26% and said it will continue its search for a strategic investor with a continued preference for Singapore Airlines (SIA). (BEJ) parent, China National Aviation Holding Co (CNAC) submitted its bid to (CEA) last month, saying it intended to purchase 2.9 billion "H" shares for at least HK$5/$0.64 per share. (CNAC) also said it would cooperate with (CEA), especially in Shanghai, and that the carriers would launch a cargo (JV). But (CEA) accused (BEJ) of "lacking sincerity to make the cooperation happen." (CEA) Board Secretary, Luo Zhuping noted earlier that the companies had no contact and conducted no negotiations following (BEJ)'s bid submission. Ying Ming Law Firm, (CEA)'s legal adviser, said in a statement that (BEJ)'s bid was full of "uncertainties" and could lead to "antitrust investigations." (CEA) financial adviser, Shenyin & Wanguo Securities Co said the bid would not enable (CEA) to realize its goal of importing foreign know-how that could advance its management expertise and upgrade its operating level and profitability. To that end, (CEA) Independent Director, Zhou Ruijin revealed that the airline's board still prefers (SIA)'s bid, even though (SIA) CEO, Chew Choong Seng insists there will be no increase of its offer for a 24% stake. "Whether (SIA) will raise its offer or not, is not the most important thing," Zhou said, adding that (CEA) and (SIA) will begin new discussions on the stake sale soon.

(CAT) 777 Chief Pilot, Captain Ian Wilkinson is fired for "buzzing" Paine Field Airport, Everett, Washington, USA on January 30, 2008 delivery of 777-367ER (36832, B-KPF), specifically for "violating company guidelines requiring prior clearance for such maneuvers." (CAT) Chairman, Christopher Pratt was on board. SEE PHOTO & ARTICLE, FRONT PAGE "SEATTLE TIMES" - "CAT-777-FEB08."

Oneworld (ONW) airlines will begin bringing all operations together at Beijing International in the airport's vast new passenger terminal. British Airways (BAB) and Qantas (QAN) will move on February 29, while the alliance's other members serving Beijing (Cathay Pacific (CAT), Dragonair (DRG), Finnair (FIN), and Japan Airlines (JAL)) will transfer into Terminal 3 on March 26. The six Oneworld (ONW) carriers will use check-in desks in the terminal's Area C.

777-367ER (35300, B-KPG), (ILF) leased.

March 2008: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7 billion (RPK)s passenger traffic in February, up +19% from the year-ago month, against a +15.7% increase in capacity to 9.01 billion (ASK)s. Load factor rose +2.1 points to 77.6% LF.

Cathay Pacific Airways (CAT) reported a profit attributable to shareholders of +HK$7.02 billion/+$901.9 million in 2007, up +71.8% from the +HK$4.08 billion earned in 2006. The result featured a full-year contribution from lower-cost subsidiary Dragonair (DRG). Separate results for each airline were not provided. "We are very pleased with our 2007 result, which was driven largely by consistently strong passenger demand," Chairman, Christopher Pratt said. "The synergies between Cathay Pacific (CAT) and Dragonair (DRG) really began to show through and helped to further develop Hong Kong's role as Asia's leading international aviation hub for both passenger and cargo traffic." Helped by the contribution from Dragonair (DRG), turnover rose +24% year-over-year to HK$75.38 billion, while costs climbed +21.6% to HK$67.61 billion. The largest increase was fuel, which jumped +21.8% to HK$24.62 billion. Passenger demand was high throughout the year. The two carried a record 23.2 million passengers, an increase of +28.5% over 2006. Yield, driven by a greater number of premium passengers, grew +14.6% to 55.2 cents. Cargo revenue rose +10% to HK$13.18 billion, although yield dropped -7.7% to HK$1.56, as weak demand from Europe and North Asia, increased competition and a modal shift to marine freight, due to high fuel prices hit the bottom line.

The carriers added 12 airplanes last year, including the first five of 30 777-300ERs on firm order. (CAT) added its sixth 747-400BCF and expects another this year. In May, it will start taking delivery of six new 747-400ERFs.

Looking forward, Pratt warned that airlines can expect competition to intensify this year, "while high and volatile fuel prices will continue to have an impact on the business."

Cathay Pacific Airways (CAT) will launch four-times-weekly, Hong Kong - Madras on June 1.

Beijing Capital International Airport's new $3 billion-plus Terminal 3 opened as Shandong Airlines (SHG) (flight SC1151 arrived from Jinan at 8:39 am. UK architect, Norman Foster claimed it is the largest covered structure ever built - - 3.25 km long and 1.3 million sq m of floor space. Construction began in March 2004. The airport said the three-concourse facility welcomed Shandong (SHG), Sichuan Airlines (SIC), Qantas (QAN), Qatar Airways (QTA), British Airways (BAB), and El Al (ELA). A second move is scheduled for March 26 when Air China (BEJ), Shanghai Airlines (SHA), (SAS), Austrian Airlines (AUL), Lufthansa (DLH), Asiana Airlines (AAR), Air Canada (ACN), United Airlines (UAL), (ANA), Thai Airways (TII), Singapore Airlines (SIA), Finnair (FIN), Cathay Pacific Airways (CAT), Japan Airlines (JAL), Dragonair (DRG), Turkish Airlines (THY), Emirates (EAD), Air Macau (MCU), S7 Airlines (SBR), and EgyptAir (EGP) will transfer to the new building. "Reuters" reported that airport capacity will be boosted to 76 million per year from the 52 million it served in 2007. The baggage system can handle 19,800 pieces per hour, it said.

Boeing (TBC) delivered its 700th 777, a 777-300ER leased by Cathay Pacific Airways (CAT) from (ILFC) (ILF). The lessor has ordered 79 777s since 1992 and has five more scheduled for delivery. (CAT) operates 24 777s, with 23 additional 777-300ERs to come.

April 2008: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7.94 billion (RPK)s passenger traffic in March, up +17.2% on the year-ago month. Capacity rose +13.7% to 9.67 billion (ASK)s, and load factor climbed +2.4 points to 82.1% LF.

Chinese mainland carriers are preparing for commercial flights across the Taiwan Strait to be permitted before year end, as the newly elected President of Taiwan, Ma Yingjiu, has promised. Ma will take office on May 20, and said he plans to allow the launch of weekend charter flights across the strait in July, followed by daily scheduled flights before 2009.

According to China International Capital Corp (CICC), mainland carriers see "big market potential" across the strait. The route is expected to contribute more than CNY5 billion/CNY714.2 million to the collective annual net profit of mainland airlines.

News reports out of Taiwan said that Air China (BEJ) plans to take the lead and establish a branch office on the island after Ma assumes the presidency. (BEJ) did not confirm, but did stated that "all mainland carriers are preparing for launching the cross-strait flights."

(CICC) noted that China Eastern Airlines (CEA) will benefit most from the flights as 35% of the Taiwanese population living on the Chinese mainline resides in Shanghai and the neighboring Jiangsu Province. China Southern Airlines (GUN) should reap more benefits than (BEJ) as well, according to (CICC), as it holds a 60% stake in Xiamen Airlines (XIA). A quarter of the mainland's Taiwanese population lives in the Pearl River Delta region and another 10% in nearby Fujian Province.

Air China (BEJ) holds a 17.5% stake in Cathay Pacific Airways (CAT) and a 51% stake in Air Macau (MCU). Those two carriers will be impacted by the liberalization, especially (CAT), which connects Taiwan to both the mainland and Europe through Hong Kong.

Global Logistics Systems said Cathay Pacific Airways (CAT) adopted its Ezycustoms technology as its customs gateway to conform to AAMS requirements of USA (CBP). Features include compliance verification, waybill records management, and exception alerts.

A330-342 (915, B-LAH), delivery.

May 2008: Calidris said it reached a deal with Cathay Pacific (CAT) and its Dragonair (DRG) subsidiary, to provide its Revenue Integrity solution to identify and eliminate false and duplicate bookings.

Cathay Pacific Airways (CAT) plans to phase out 23 747-400s beginning in 2013, in an effort to realize fuel savings of -22% per seat. COO, John Slosar told Hong Kong media that the carrier is considering a variety of replacement airplanes and that "the A380 is also an option." In the interim, it will raise its fuel surcharge +37% from June 1 in an effort to negate 40% to 50% of the increase in fuel prices. CEO, Tony Tyler said fuel now accounts for 40% of (CAT)'s total operating costs, up +10 points from last year. "At current prices, it costs us $360,000 in fuel alone to fly a 747-400 to London and back," he said.

Merrill Lynch (ML) predicted that (CAT)'s net income will drop -55% to +HK$3.15 billion in 2008, which would represent its worst financial performance since 2003. (ML) estimated that the surcharge increase will add HK$8 billion in revenue, but that the annual fuel bill will increase by +HK$20 billion, if the price of jet fuel holds at $150 per barrel this year.

747-467FER (37299, B-LIA), and 777-367ER (35301, B-KPH), deliveries.

June 2008: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7.59 billion (RPK)s passenger traffic in May, up +19.6% on the year-ago month, against a +16% increase in capacity to 9.81 billion (ASK)s. Load factor rose +2.3 points to 77.4% LF.

Cathay Pacific Airways (CAT) announced the promotions of General Manager Revenue Management, Sales & Distribution, Ian Shiu to Director Corporate Development; General Manager Southwest Pacific, Ivan Chu to Director Service Delivery; current Director Service Delivery, Quince Chong to Director Corporate Affairs; and James Finlay , Managing Director, Rupert Hogg to Director Cargo. All appointments are effective in July.

Royal Jordanian (RJA) CEO, Samer Majali took over as (IATA ) (ITA) Chairman, succeeding (TAP) Portugal, CEO, Fernando Pinto. He will serve one year and said the agenda "has extraordinary challenges. Change must be even more aggressive." (IATA) (ITA)'s board of governors announced that Cathay Pacific Airways (CAT) CEO, Tony Tyler will succeed Majali in June 2009, when the Annual General Meeting (AGM ) will take place in Kuala Lumpur.

Air France (AFA)/(KLM), Cathay Pacific Airways (CAT), Martinair (MTH) and the (SAS) Group all reached agreement with the USA Department of Justice (DOJ) to plead guilty in USA court and pay criminal fines "for participating in a multiyear conspiracy to fix prices for air cargo rates," the (DOJ) said. (AFA)/(KLM) will pay a $350 million fine, Cathay (CAT) has agreed to pay $60 million, Martinair (MTH) $42 million, and (SAS) $52 million, bringing the total imposed by the (DOJ ) during its investigation into air cargo antitrust violations to $1.27 billion. The figure marks the highest amount ever imposed by the antitrust division in one investigation. British Airways (BAB), Korean Air (KAL), Japan Airlines (JAL), and Qantas (QAN) already have pled guilty and paid fines. In addition, a former Qantas (QAN) executive will serve eight months in a USA jail as a result of the investigation.

(AFA)/(KLM) Chairman & CEO, Jean-Cyril Spinetta said the company has "taken thorough steps across the organization to prevent recurrence." (SAS) President & CEO, Mats Jansson said there are "various control mechanisms" in place to prevent antitrust violations, adding that it was "very unfortunate and a serious problem that our policies were not fully observed in this case." Cathay (CAT) CEO, Tony Tyler said that airline "carefully considered all applicable factors and concluded that entering into this agreement at this time presents the best resolution to the investigation," adding that "it transpired that some of our actions relating to shipments from Hong Kong to the USA were in conflict with USA antitrust laws, and we very much regret this."

The (DOJ) said that "the airlines each engaged in a conspiracy to suppress and eliminate competition, by fixing the cargo rates charged to customers for international air shipments. The charged conduct affected billions of dollars of consumer and other goods . . . shipped by these airlines and their competitors." Associate Attorney General, Kevin O'Conner added that the "price-fixing conspiracy undermines our economy and harms the American people who, due to lack of true competition in this area, end up footing the bill." The (DOJ) said its investigation is ongoing. Both Air Canada (ACN) and El Al (ELA), which were not included in the agreements recently announced, said they have made provisions for possible settlements with the (DOJ) regarding cargo antitrust violations. The European Union (EU) and other government agencies throughout the world, also are conducting continuing investigations into alleged anticompetitive airfreight rate practices.

(CAT) took delivery of its first 747-400ERF. It will take five more this year and also has 10 747-8Fs on order for delivery in 2009 to 2012.

July 2008: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7.76 billion (RPK)s traffic in June, up +16.4% year-over-year, against a +16% increase in capacity to 9.54 billion (ASK)s. Load factor rose +0.3 point to 81.3% LF.

Cathay Pacific Airways (CAT) issued a profit warning saying that first-half and full-year 2008 results "are expected to be disappointing" as its fuel expenses have risen by approximately +60% so far this year.

Cathay Pacific Airways (CAT) said the "first stage of its redeployment of services driven by the continuing rise in fuel prices" will comprise four new weekly Hong Kong (HKG) - Dubai - Bahrain frequencies and a new four-times-weekly, (HKG) - Riyadh beginning October 1. On September 16, it will reduce (HKG) - Vancouver to 17 weekly flights from 21, and discontinue its thrice-weekly, (HKG) - Anchorage - Toronto (YYZ), replacing it with daily (HKG) - (YYZ). With the start of the winter schedule, flights to Auckland will increase to 14-times-weekly from 10. "Demand remains high, but the soaring cost of fuel means we have to operate more flights to areas with revenue-earning potential. We will not take a 'slash and burn' approach to the problem. It's important to preserve our network as Hong Kong's home carrier and we aim to keep our team together," CEO, Tony Tyler said.

At the Farnborough Air Show, airline executives said that even the world's most successful carriers will have to consider hiking passenger ticket prices and cargo carriage charges to contend with high fuel costs. Cathay Pacific (CAT) CEO, Tony Tyler said "We are going to have to charge more for passengers and cargo. We're going to have to test the elasticity or nonelasticity of demand by charging the price of production . . . This industry is going to have to start obeying the first rule of business: That is, you charge more than cost or you don't survive."

August 2008: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew a combined 8.41 billion (RPK)s traffic in July, up +15.7% from the year-ago month. Capacity rose +16.3% to 9.99 billion (ASK)s and load factor slipped -0.5 point to 84.1% LF.

1st 6 months = 45.58 billion (RPK)s traffic - - see "CAT-08TOPWLD6MTHSRPK."

Cathay Pacific Airways (CAT) and Dragonair (DRG) parent, Cathay Pacific Group blamed the relentless hike in fuel costs for a loss of -HK$663 million/-$85 million in the 2008 first half, reversed from a profit of +HK$2.58 billion/+$341 million in last year's first six months. It marked the first reporting period in which (CAT) has posted a loss in five years, when (SARS) devastated the Hong Kong-based airline company, and came despite revenue rising +22% to HK$42.45 billion. Chairman, Christopher Pratt said, "Global aviation is making a painful adjustment to the new reality of $100-plus oil. Cathay Pacific (CAT) is reducing other costs where it can, but there is a limit to how much cost can be saved, before quality and brand are compromised. It is thus inevitable that fares for passengers and shippers will have to rise to reflect the new cost of operation."

Cathay (CAT) said its fuel bill leaped +83% from HK$10.55 billion in the 2007 first half to HK$19.31 billion this year. As a percentage of total operating costs, fuel jumped to 45.3% for the first half from 33.6% for the corresponding period last year. The carrier said the steep rise in fuel prices was not matched by increases in fuel surcharges. The Hong Kong Civil Aviation Department approved surcharges during the first half that covered only half of the higher fuel bill, (CAT) said, claiming that its surcharges were significantly behind those charged by major international competitors.

Passenger revenue for the six months grew +21.9% to HK$25.57 billion as (CAT) and Dragonair (DRG) carried a total of 12.5 million passengers, up +13.7% over the same period in 2007. Overall passenger load factor lifted +1.9 points to 80% LF. Cargo carried, climbed +6.8% to 828,399 tonnes, with demand better than anticipated. Pratt said that "the company's priority at this time is to protect the integrity of this network. There will be some redeployment of capacity within the network, but it is not envisaged that the company will withdraw from any destination it now serves."

Cathay Pacific Airways (CAT) announced more changes to its network strategy designed to reduce fuel expenses and focus on demand. It will cut 10 flights to North America, add eight weekly services to Australia, and increase capacity on 14 flights to Europe. Last month it added four weekly flights to Dubai and Bahrain, and cut frequencies to Toronto and Vancouver.

CEO, Tony Tyler said, "We have to maximize our earnings during this difficult period which is why we are moving our capacity. However, while we are reducing services on some routes, we will continue to maintain the integrity of our network, reshaping it where necessary to ensure we fly airplanes to where we can cover our costs and also make some money." One daily flight to Los Angeles will be cut on October 26 and Vancouver service will decline again, this time to 14-times-weekly from 17. Service to Perth, Brisbane and Sydney will increase and A340-300 flights to Amsterdam and London Heathrow will upgrade to 747-400s.

(SITA) will upgrade Cathay Pacific Airways (CAT)'s network infrastructure to ensure readiness for new applications under a four-year, multimillion-dollar deal. The upgrade will offer +425% more bandwidth and feature messaging, IP services, managed firewall and end-to-end service management with a 24/7 help desk and on-site team. The agreement also includes (SITA)'s Airport Hub solution featuring shared Information Technology (IT) systems at more than >100 airports.

Cathay Pacific Group continued to expand and modernize its fleet in the first half, adding three more 777-300ERs and two A330-300s. It also took delivery of the first of six 747-400ERFs it has on order to replace its retiring 747-200/-300Fs.

2nd 747-467ERF (36867, B-LIB), delivery.

September 2008: Hong Kong’s airline market certainly wasn’t immune to the slowdown in mainland China. August traffic there fell -5% (RPK) in August, reflecting a drop in visitors to the city. Mainland
visa tightening related to the Olympics was also a factor, as was the city’s large exposure to the battered global financial markets. Traffic year to date through August, however, was still up +5% (RPK). Hong Kong’s government-controlled airport authority is undertaking
early feasibility studies for a third runway.

Six Hong Kong carriers, including Cathay Pacific Airways (CAT) and Dragonair (DRG), will cut fuel surcharges on international and domestic routes by -10% and -15%, respectively, through October and November. Surcharges will be HK$832/$106.97 on long-haul flights, and HK$196 on short-haul. The decision, as well as cuts implemented by some foreign carriers, have put pressure on airlines from the Chinese mainland. Air China (BEJ) noted that it will "make a corresponding adjustment" on international routes but ruled out the possibility of a domestic reduction, at least in the short term, as the domestic fuel price lags behind the international rate.

(CAT) is beginning to see weakness in corporate demand.

Cathay Pacific Airways (CAT) is moving toward a more comprehensive revamp of its network and fleet than previously disclosed, according to a memo sent to employees by CEO, Tony Tyler, who warned that the airline likely won't "emerge unscathed" from the industry downturn. Last month (CAT) announced significant changes to its network designed to reduce fuel expenses and focus on demand. It cut 10 weekly flights to North America while adding eight to Australia and increasing capacity on 14 flights to Europe. "We have to maximize our earnings during this difficult period, which is why we are moving our capacity," Tyler told reporters at the time, adding that it was "necessary to ensure we fly airplanes to where we can cover our costs." The network shakeup followed (CAT)'s first six-month loss since (SARS). In last week's memo, first reported by the "Associated Press," Tyler told staff, "the industry is now in the middle of a major crisis and it's unlikely that we are going to emerge unscathed. These are extremely difficult times for the aviation industry, and I'm sorry to say there doesn't appear to be any light at the end of the tunnel just yet." He revealed that he is looking at a further restructuring of capacity, raising fares and surcharges and a major reworking of the fleet. It is expected that (CAT) will put under the fuel/yield microscope the role of the 24 747-400s and 15 A340-300s in its passenger fleet.

With regard to the freighter fleet, the airline almost certainly will look to accelerating the retirement of its 747-200Fs. Four were due to be retired by the end of 2009, and another two in 2012. (CAT)'s first 747-400ERF entered service in May, another followed last month, and it will have six in service by the end of next year. It also ordered 10 747-8Fs for delivery between 2009 and 2012.

747-467BCF (25871, B-HOZ), re-delivered after conversion to freighter.

October 2008: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 6.87 billion (RPK)s traffic in September, a +4.5% increase over the year-ago month. Capacity rose +14.2% to 9.5 billion (ASK)s and load factor fell -6.7 points to 72.3% LF.

November 2008: 1st 9 months = 68.6 billion (RPK)s (+14.4%); 6.65 billion (FTK)s (+4.2%); 18.78 million passengers (+10%).

Cathay Pacific Airways (CAT) issued a stock market alert warning that its full-year result will be "disappointing" despite falling fuel prices. (CAT) said in its statement to the Hong Kong Stock Exchange that "weakness in revenue and losses on certain fuel hedging contracts" would "affect the year's results adversely." It lost -HK$663 million/-$85.5 million) in the first half of 2008 after reporting a +HK$7.02 billion profit last year.

The company said the strengthening USA dollar and falling first (F) and business class (C) travel and cargo are causing revenue "to weaken materially." Demand for economy (Y) seats has weakened as well. It also disclosed that its unrealized mark-to-market losses on fuel hedging contracts as of October 31 reached an estimated HK$2.8 billion, up from HK$630 million in September.

(CAT) said "Investors are advised to exercise caution in dealing in shares of Cathay Pacific (CAT)," but did not offer an estimate of its full-year result.

Cathay Pacific Airways (CAT) CEO, Tony Tyler said the current industry downturn will last longer than the one associated with (SARS) in 2003, but that there will be little, if any, cross-border consolidation, particularly in Asia, as a result. "It's already looking difficult and the question is how long and how deep it will be," Tyler said at the Australian Airports Association national convention in Perth. But relief will not come through consolidation, which did not occur during the 1997 Asian financial crisis or (SARS), as many analysts predicted. "There are too many restrictions to cross-border mergers in Asia, and within countries usually only one major player," he said.

(CAT) lost -HK$663 million/-$85.5 million in the first six months of 2008 and said last week it expected a "disappointing" full-year result, but Tyler said it still has "several major strengths - - a strong network, brand and a strong balance sheet." It will maintain its network, but will not leverage its balance sheet to buy airplanes during a depressed market, as it has before. In fact, it has decided to dispose of its five 777-200s. "We have told Boeing (TBC) and Airbus (EDS) we are not in the mood to buy airplanes," he said.

Cathay Pacific Airways (CAT) finally has decided to phase out its 777-200s, rationalizing its 777 fleet around the 777-300 and 777-300ER, while cutting (ASK) capacity. It has been considering the future of its 777-200s for some time, as its fleet is built around the A330-300 for regional flying, and the 777-300 for heavy trunk routes. It will attempt to sell the airplanes. CEO, Tony Tyler told staff in a newsletter that the airline has been formulating an "overhaul" of its operating plan and that "In light of market conditions, we are looking ever more critically at the business prospects for the rest of this year, and for 2009." He emphasized that (CAT) is not cutting destinations nor frequencies, just slowing growth slightly.

It will not renew leases next June on two A330-300s, used by Dragonair (DRG). "The situation is currently extremely volatile, with banks not lending and people and companies not spending," he warned staff. "There's no reason to panic, but equally we have to be realistic about the fact that things are not looking good."

December 2008: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7.13 billion (RPK)s traffic in November, up +1% year-over-year. Capacity rose +7.4% to 9.43 billion (ASK)s, lowering load factor -4.7 points to 75.7% LF.

1st 6 months for Cathay Pacific Airways (CAT) had a net loss of -$71 million, or -$11 million excluding provisions for potential cargo price-fixing fines. (CAT) has $5.4 billion in revenue.

(CAT) unveiled new measures to "help the airline deal with a serious downturn in business as a result of the global financial crisis," including scaling back capacity growth and grounding two freighters.

It also is offering unpaid leave to pilots (FC) and flight attendants (CA) and requesting a two-year delay in the completion of a new cargo terminal at Hong Kong International.

Regarding the current industry and economic downturn, CEO, Tony Tyler said (CAT) "cannot see light at the end of the tunnel at this point." Passenger capacity, which was projected to grow +6% to +7% in 2009, now is set to grow less than +1% next year, "to reflect the anticipated decline in demand," (CAT) said. It is offering "voluntary unpaid leave" for flight crew (FC) beginning January 1 for periods ranging from two weeks to one year.

Australia's Civil Aviation Safety Authority named Cathay Pacific Airways (CAT) Senior Training Captain John McCormick as Director Aviation Safety & CEO, effective March 1. He formerly was with Qantas (QAN) and the Royal Australian Air Force (RAA).

January 2009: Cathay Pacific Airways (CAT) said it expects to report a HK$7.6 billion/$980.2 million unrealized mark-to-market loss on its fuel hedging contracts for 2008 and that its full-year financial result is "still expected to be disappointing." (CAT) issued a profit warning two months ago and said that "revenue has continued to weaken" since that time. Premium traffic has "fallen significantly," it said in a new filing to the Hong Kong Stock Exchange, adding that currency movements have weakened yields further while advance bookings for the current quarter are "markedly down" year-over-year.

The unrealized hedging loss will be accompanied by a -HK$300,000 realized loss, (CAT) said. It claimed it "has benefited, and will continue to benefit from the reduction in oil prices notwithstanding the mark-to-market losses" and that if average oil prices this year are consistent with those at the end of 2008, the fuel bill will fall by approximately -HK$20.3 billion.

(CAT) CEO, Tony Tyler warned in the company's internal staff magazine that things "may get worse" as (CAT) and Dragonair (DRG) reported falling passenger and cargo numbers this week. (CAT) flew a combined 7.79 billion (RPK)s traffic in December, up +2.4% from the year-ago month, but saw a -0.3% dip in passengers to 2.1 million. Capacity rose +4.7% to 9.86 billion (ASK)s and load factor declined -1.8 points to 79% LF. Cargo plunged -23.9% year-over-year to 115.2 million tons and cargo load factor dropped -5.7 points to 62.9% LF. Tyler cautioned staff that while airplanes may look full, "the numbers of passengers actually paying proper first (F) and business (C) class fares is now very low." He added that (CAT) put some very cheap deals into the market to bolster economy loads.

Noting that its airfreight business has been particularly affected, (CAT) announced plans to park two 747-400BCFs in Victorville, California, this month for one year. (CAT) said that it reached an agreement with the Airport Authority Hong Kong (AAHK) to delay the completion of its new cargo terminal by up to two years to mid-2013. (CAT) said the decision "was taken in response to market conditions brought about by the global economic downturn" and that it is aimed at "better matching supply and demand in the airfreight business given the current market outlook." It has suffered from a steep decline in freight traffic, but said it is "fully committed" to the eventual completion of the Hong Kong terminal and that it will compensate (AAHK) for the delay.

747-412BCF (26557, B-HKX) bought from Singapore Airlines (SIA) for conversion to freighter at Xiamen. 747-467ERF (36868, B-LIC) and 777-367ER (36157, B-KPJ), deliveries.

February 2009: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7.89 billion (RPK)s traffic in January, up +1.2% from the year-ago month. Capacity rose +4.7% to 9.91 billion (ASK)s, dropping load factor -2.8 points to 79.5% LF.

Hong Kong visitor arrivals were up +11% in January but only due to the Chinese New Year date shift.

(CAT) CEO, Tony Tyler confirmed at the Oneworld (ONW) anniversary event in Madrid that (CAT) has no plans to lay off employees despite the current downturn and repeated profit warnings. (CAT) is, however, making small changes in order to weather the storm. "We have already parked two freighter airplanes. If necessary, more will follow," Tyler said, ruling out the grounding of any passenger planes. Last month, the Hong Kong Airport Authority agreed to let (CAT) delay completion of its new cargo terminal by two years until mid-2013. It also has been trying to sell five 777-200s, but that effort has hit a snag. "We found a buyer, but it is not able to finance the airplanes anymore," Tyler said.

(CAT) still enjoys an average load factor above >80% throughout its network, "but unfortunately we see a decline in first (F) and business class (C)." He does not expect a major Asian airline to go bankrupt; "Most of them are government owned. They don't want them to fall apart."

(CAT) will continue to focus on its Chinese network, which is well covered through its Dragonair (DRG) subsidiary. (CAT) has no plans to fly from mainland China to the USA or Europe. It still has long-term plans to acquire either the A380 or 747-8 but has established no timetable.

Air France (AFA)/(KLM), British Airways (BAB), (CAT), Virgin Atlantic Airways (VAA) and UK airports operator (BAA) announced formation of the Aviation Global Deal (AGD) Group, which expressed its support for inclusion of carbon dioxide emissions in a "new global climate deal" scheduled to be discussed at December's United Nations climate summit in Copenhagen.

Meeting in Hong Kong, the (AGD) argued for a "fair and effective global policy solution" on aviation emissions, which were not included in the 1997 Kyoto Protocol and are not managed under any current global agreement. (ICAO), which the group supports, is working on its own cap-and-trade plan, while the (EU) plans to include aviation in its controversial trading scheme from 2012.

The four airlines and (BAA) said any global emissions policy must "offer genuine environmental benefits . . . be operationally and economically sound . . . maintain competitiveness between airlines and avoid market distortions . . . [and] balance the social and economic benefits of flying with the industry's responsibility to cut global emissions."

(CAT) CEO, Tony Tyler said, "Aviation has a key part to play in reducing global emissions and for too long has been seen as part of the climate problem rather than part of the solution. We hope the work of our group will offer a practical industry-led solution that creates a level playing field and appeals to policy-makers, environmental groups and businesses alike." The (AGD) said it will seek support from other airlines and industry stakeholders.

March 2009: Cathay Pacific (CAT) and Dragonair (DRG) flew 6.65 billion (RPK)s traffic in February, a -4.9% drop from the year-ago month. Capacity was down -3.7% to 8.68 billion (ASK)s and load factor fell -1 point to 76.6% LF. General Manager Revenue Management, Tom Owen said premium cabin demand is "persistently weak" and that yields are under "tremendous pressure."

(CAT) reported its first full-year net loss in a decade, posting a 2008 deficit of -HK$8.56 billion/-$1.1 billion, reversed from net income of +HK$7.02 billion in 2007. (CAT) said the loss was attributable to shrinking passenger and cargo demand combined with a -HK$7.97 billion non-cash loss on fuel hedging that was reversed from a hedging gain of +HK$933 million in 2007. It noted the "collapse" of the front end of passenger cabins and a "very weak" cargo market. Though fuel prices are significantly down, "we won't get the full benefit," it said, adding that it already has posted mark-to-market fuel hedging losses of -HK$1.9 billion in just the first two months of this year. It has made "conserving cash" and "managing capacity" top priorities and is attempting to sell airplanes including five 777-200s.

Full-year revenue rose +15.2% to HK$83.33 billion, while expenses leaped +39.9% to HK$92.64 billion. Operating loss excluding taxes and fuel hedging, was -HK$1.34 billion, reversed from an operating profit of +HK$5.22 billion in 2007.

Total traffic carried by (CAT) and subsidiary, Dragonair (DRG) increased +11.2% to 90.98 billion (RPK)s on a +12.7% lift in capacity to 115.48 billion (ASK)s, producing a load factor of 78.8% LF, down -1 point. Passenger yield heightened +5.3% to HK63.6 cents. Cargo traffic decreased -0.7% to 8.84 billion (FTK)s on a +0.7% rise in capacity to 13.43 billion (ATK)s, producing a load factor of 65.9% LF, down -0.8 point. Cargo yield lifted +12.4% to HK$2.54.

(CAT) does not forecast a turnaround in 2009. "Passenger and cargo demand are expected to remain weak and, if fuel prices remain at their present levels, further losses on fuel hedging contracts will be incurred," Chairman, Christopher Pratt said.

Kale Consultants said that (CAT) selected its Amber cargo revenue accounting solution.

2 747-467ERFs (36869, B-LID; 36870, B-LIE) deliveries.

April 2009: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7.58 billion (RPK)s traffic in March, down -4.5% year-over-year. Capacity dropped -0.8% to 9.59 billion (ASK)s and load factor fell -3 points to 79.1% LF.

On the heels of a -HK$8.56 billion/-$1.1 billion 2008 loss that represented its first full-year deficit in a decade, (CAT) said that it will confront a "toxic combination" of challenges with measures including a -8% capacity cut beginning next month and unpaid leave for employees. "We anticipate an extremely challenging year in 2009 and a toxic combination of low fares, a big drop in premium travel, weak cargo loads, poor yields and a negative currency impact is making it more important than ever to preserve cash," CEO, Tony Tyler said. "We have no option but to take measures that will help us weather the current storm and maintain the long-term sustainability of the business." He said a "marked deterioration" in first-quarter business included a -22.4% year-over-year decline in revenue.

The -8% cut in passenger capacity will include a reduction of flights to 11 destinations, additional flights to Denpasar, Sapporo and Bahrain/Riyadh and a -13% cut at (DRG), which will suspend service to Fukuoka, Dalian, Shenyang, Guilin and Xi'an.

Cargo capacity will be lowered -11%, with weekly freighter flights falling to 84 from last year's peak of 124. (CAT) will park two more 747-400BCFs, bringing the total to five, and lease an additional 747-400BCF to Air Hong Kong (AHK). It also is negotiating the sale of 777-200s.

The leave scheme will involve all 17,000 (CAT) employees, each of whom will be asked to take 1 to 4 weeks of unpaid time off from May 1 to April 30, 2010. Duration will depend on seniority, with newer employees required to take less leave. Some 65.6% of (CAT) staff will take just one week, while 15.9% will take two, 11.5% will take three and 7% will take all four, losing -15.4% of their salary over a six-month period. Senior executive staff will be foregoing bonuses, (CAT) said. "The pain will be shared from the top down . . . That means that no matter what level an employee is, everyone more senior is taking more pain. Support from all staff is essential," Tyler said.

The Australian Competition and Consumer Commission (ACCC) announced it has instituted proceedings in federal court against (CAT) "for alleged price-fixing of air freight." (CAT) is the eighth airline targeted by Australian authorities, who said that (CAT) "entered into over 70 arrangements or understandings with other international air cargo carriers that had the purpose or effect of fixing the price of a fuel surcharge, a security surcharge and rates that were applied to air cargo" between 2000 and 2006. An initial hearing is scheduled for May 28. The (ACCC) said "other airlines" remain under investigation. (CAT) agreed to pay a $60 million following a USA Department of Justice investigation last summer

(CAT) said approximately 14,000 employees from both (CAT) and (DRG) - - about 70% of the company's total workforce - - have consented to the unpaid leave scheme. (CAT) said the deadline for consent has been extended from April 30 to May 10 in order to give on-duty staff "more time in which to consider the details of the scheme" that will require 1 to 4 weeks of unpaid leave depending on seniority. Notably, just 14% of (CAT) pilots (FC) responded in the affirmative, compared to 55% at (DRG).

747-467ERF (36871, B-LIF), delivery. 747-2L5F (22107), to Southern Air (SOF) and WFU at Mojave.

May 2009: Cathay Pacific (CAT) and Dragonair (DRG) reported a +8.8% rise to 2.2 million passengers enplaned in April. Traffic increased +5.3% to 7.88 billion (RPK)s on a +1.1% lift in capacity to 9.54 billion (ASK)s, resulting in load factor heightening +3.2 points to 82.6% LF. The increase was mainly owing to the Easter holiday falling in April this year and fare stimulation, the airline group said. "The slump in demand for premium traffic continued unabated across the network and . . . combined with lower fares and adverse currency movements again placed significant downward pressure on yields," it noted.

Cargo dropped -13.3% to 123,179 tonnes. For the first fourth months of the year, tonnage fell -17.3%, outpacing a -13.6% capacity cut. General Manager Cargo Sales & Marketing, Titus Diu said, "the cargo story for April was very much in line with the first quarter of 2009, with continued weakness in the global airfreight business overall and soft demand out of Hong Kong and the main manufacturing areas in China."

Hong Kong International airport (HKG) is lowering usage fees and allowing interest-free deferred bill payments. Landing and parking charges will be lowered by -10% for the remainder of 2009, while half of the rental payments due for lounges, office space, ticket counters and storage can be deferred interest free for up to one year. (HKG) traffic fell -7% during the first quarter, with cargo traffic declining -23%.

777-367ER (36158, B-KPK), delivery.

June 2009: In May, Cathay Pacific (CAT) and its Dragonair (DRG) subsidiary flew 7.09 billion (RPK)s traffic, down -6.7% from the year-ago month, on a -7.5% decline in passenger numbers to 2 million. Capacity fell -4.7% to 9.35 billion (ASK)s, reducing load factor -1.6 points to 75.8% LF.

(CAT) CEO, Tony Tyler was named Chairman of the (IATA) (ITA) Board of Governors for 2009 to 2010 at the (ITA)'s Annual General Meeting (AGM) in Kuala Lumpur, succeeding Royal Jordanian CEO, Samer Majali.

Tyler said his first priority is to achieve "a workable, sensible approach to [airline] emissions." (ITA) announced a commitment to achieving carbon neutral growth from 2020. Interestingly, (CAT) is a founding member of the Aviation Global Deal (AGD) Group, a coalition of six airlines plus the British Airports Authority (BAA) formed outside (ITA) to work for the inclusion of aviation in a "new global climate deal" scheduled to be discussed at December's United Nations (UN) climate summit in Copenhagen. In April, the (AGD) presented a draft policy framework for aviation emissions to (UN) climate change negotiators in Bonn.

(ITA) Director Aviation Environment, Paul Steele said the (AGD) and (ITA) are working toward the same goals and that there is no danger of the message being mixed, but Air Transport Association (ATA) President & CEO, James May has said that although the (ATA) supports (ITA)'s goals, it does not support the (AGD).

At an environmental round table at the (AGM), Tyler, British Airways (BAB) CEO, Willie Walsh and Qatar Airways (QTA) CEO, Akbar Al Baker agreed that carbon neutral growth by 2020 is possible, but emphasized that all stakeholders need to play a part. "The goals are achievable but [the airline] industry can't do it alone," Tyler said, adding that governments need to invest in airport and airways infrastructure and support research into alternative fuels. Airframe and engine manufacturers, meanwhile, must continue to invest in greener, more fuel efficient technology. "If it is not done together I do not think it will be possible to have carbon neutral growth," Al Baker said.

(CFM) International CEO, Eric Bachelet, who also participated in the roundtable, said that "biofuels are absolutely indispensible to reaching our goals."

Al Baker blasted airline inclusion in the European emissions trading scheme (ETS), calling it "a complete farce created by the (EU)." He also warned that other states could retaliate by imposing their own fees and taxes on airlines flying into their airspace. Walsh said, "we've got to avoid a patchwork approach . . . it will kill us."

In addition to naming Tyler Chairman for the current 12-month period, the (ITA) board agreed to appoint David Bronczek, President & CEO of FedEx Express (FED), to serve as Chairman following Tyler in June 2010.

(CAT) Chairman, Christopher Pratt said that "demand and yields seem to have stopped falling" but that rising oil prices are contributing to what "continues to be a very nasty situation" for the airline, which lost -HK$8.56 billion/-$1.1 billion in 2008 and suffered a -22.4% drop in first-quarter revenue. It already has announced a -8% cut in passenger capacity but Pratt said "more cuts will come if individual routes turn cash-negative with the changing cost and demand picture."

Dragonair (DRG) appointed Cathay Pacific Airways (CAT) General Manager Sales, Pearl River Delta & Hong Kong, James Tong as its new CEO, effective August 17, succeeding Kenny Tang. Tong joined (CAT) in 1987 and was (DRG)'s Regional Manager Northern China in 1994 through 1996.

August 2009: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew a combined 7.72 billion (RPK)s traffic in July, down -8.2% year-over-year. Capacity dropped -7.5% to 9.25 billion (ASK)s and load factor was down -0.6 point to 83.5% LF.

(CAT) returned to profit in the first half of 2009 thanks to fuel hedge gains and cost/capacity cuts, posting a +HK$812 million/+$104.8 million surplus compared to a -HK$760 million loss in the year-ago semester.

Six-month revenue plunged -27.1% year-over-year to HK$30.92 billion, but expenses fell -32.2% to HK$28.88 billion as (CAT) reduced capacity, negotiated concessions from employees and benefited from a HK$2.1 billion unrealized mark-to-market fuel hedge gain. Operating result swung to a +HK$2.04 billion profit from a -HK$698 million loss in the first half of 2008. "There are cautious signs that the fall in demand has bottomed but there is, as yet, no indication when a sustained pickup will begin. The recent strengthening of fuel prices is a concern," Chairman, Christopher Pratt said. "(CAT) has taken appropriate measures to get through the current slump and will take further measures as necessary should the cost and demand picture not improve."

From May, (CAT) reduced passenger capacity by -8% and cargo capacity by -13%, while its Dragonair (DRG) subsidiary reduced (ASK)s by -13% and cut six destinations from its network. It also reached agreements on 1 to 4 weeks of unpaid leave with its entire employee group.

(CAT) will launch four-times-weekly, Hong Kong - Dubai - Jeddah service October 25 aboard an A330-300. It will increase Hong Kong - Riyadh service to daily (from five-times-weekly) August 1 and reduce Hong Kong service to Brisbane (from 10-times-weekly to daily, September 1 - November 17), San Francisco (14-times-weekly to 11-times-weekly in September and October) and Paris Charles de Gaulle (from 10-times-weekly to daily, September 1).

It added two 777-300ERs and the last of six 747-400ERFs during the semester and retired the last of its 747F Classic freighters. Its six 747-400BCFs also have been removed from service. It said it "continues to work with airplane manufacturers with a view to deferring some of the deliveries of airplanes on firm order and has deferred other capital expenditure." As of June 30, (CAT) operated 123 airplanes and had 37 on firm order. Dragonair (DRG) had 31 planes with two on order, and the group's Air Hong Kong (AHK) subsidiary flew eight A300-600Fs.

Six-month passenger numbers fell -4.2% to 11.9 million and load factor was down -1.5 points to 78.5% LF. Yield plummeted -19.7% to 49.7 HK cents. Total ATKs fell -8.7% to 11.04 billion and cost per ATK declined -25.7% to HK$2.57, but rose +4.8% to HK$1.98, excluding fuel.

The (CAAC) (CAC) approved China Eastern Airlines (CEA)'s acquisition of Shanghai Airlines (SHA), according to (CEA) General Manager, Ma Xulun. The merger still requires the approval of both carriers' shareholders, but (CEA) said it has started the merger process and expects the transaction to be completed by year end. A shareholders conference is planned for October 9 to consider and vote on the merger and approval is expected.

"The total fleet of (CEA) and (SHA) is more than >300 airplanes, so we plan to make a more reasonable utilization of these airplanes during winter and spring flight schedules," Ma said. He revealed that (CEA) plans to promote Express Air Service to denote high frequency on the 22 routes the carriers share. "On some routes, the daily frequencies will be boosted to 14. That is, a flight will be operated every half hour," he said.

Huang Bin, board secretary for Air China (BEJ), said, "(CEA)'s merger with (SHA) will definitely change the competition scenario of the Shanghai air transport market." But he affirmed that it won't affect (BEJ)'s determination to make Shanghai its international gateway.
He added that (BEJ) will "accelerate the preparation process with Cathay Pacific Airways (CAT) to launch a cargo joint venture (JV) based in Shanghai." (BEJ) VP, Fan Cheng told reporters that the asset valuation for the (JV) is "nearing an end," paving the way for it to be launched by year end.

(CAT) said it will park six passenger airplanes despite its better-than-expected half-year result. Thanks to fuel hedge gains and cost/capacity cuts, it posted a +HK$812 million/+$104.8 million profit for the six months ended June 30. But Chairman, Christopher Pratt told media in Hong Kong that (CAT) does not see "signs of any pickup in business," "Bloomberg" reported. The parked airplanes will comprise four A340-300s and two 747-400s. (CAT) already has grounded five 747-400BCFs and is working with Boeing (TBC) and Airbus (EDS) to defer deliveries of some airplanes on order.

September 2009: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7.89 billion (RPK)s traffic in August, a +1.9% rise from the year-ago month. Capacity fell -5% to 9.39 billion (ASK)s, lifting load factor +5.7 points to 84.1% LF.

(CAT) announced two transactions designed to increase its liquidity: The divestment of a stake in Hong Kong Aircraft Engineering Company (HAECO) and a sale-and-leaseback deal with (BOC) Aviation (SIL).

(CAT) will sell its 20.7 million shares in (HAECO), or 12.5% of its holding, for approximately HK$1.9 billion/$245.3 million, or HK$91.83 per share, to Swire Pacific. The deal is subject to approval of (CAT)'s independent shareholders and would reduce its stake in the Maintenance Repair & Overhaul (MRO) provider (HAECO) to 15%. Swire's would increase to 46%.

(CAT), Swire Pacific and (HAECO) Chairman, Christopher Pratt said, "The transaction will bring clear advantages for all parties concerned. From a (CAT) point of view, it will improve the airline's cash position during an extremely difficult time for the aviation industry. At the same time, (CAT) will retain a strategic interest in (HAECO). The transaction will enable Swire Pacific to make a significant increase in its strategic investment in (HAECO) on terms it regards as appropriate. At the same time, it affirms Swire Pacific's long-term commitment to (CAT) and (HAECO) in particular, and to Hong Kong aviation in general."

(CAT) (CEO), Tony Tyler said, "Cash preservation has remained (CAT)'s top priority during this downturn and over the past year we have already taken many measures to help us achieve this goal. The sale of part of our (HAECO) stake will provide funds that will strengthen our balance sheet at a very challenging time for the business. We will keep a strategic stake in (HAECO), which is very important because (HAECO) is our main provider of overhaul and maintenance services, and (CAT) is (HAECO)'s biggest customer."

Swire holds just under 42% of (CAT), which reported a +HK$812 million profit in the first half of 2009.

The deal with (BOC) (SIL), the airline's first, covers six of the 19 777-300ERs that (CAT) has on firm order. The six airplanes are scheduled for delivery between the 2009 fourth quarter and the 2011 second quarter. Tyler said it was the largest sale-and-leaseback arrangement in (CAT)'s history and is "consistent with our cash-preservation priority." He said (CAT) has no plans to cancel any orders but remains in negotiations regarding deferrals. Its fleet comprises 97 owned and 25 leased airplanes. It has 39 airplanes scheduled for delivery through 2012. (SIL) currently has 127 airplanes in its portfolio with +64 more on order.

(ARINC) said Air China (BEJ), Air Macau (MCU), Asiana Airlines (AAR), (CAT), China Southern Airlines (GUN), Dragonair (DRG) and Korean Air (KAL) signed up to use its AviNet Airport wide-area network service, which is available to carriers using its Muse common-use passenger systems.

October 2009: Cathay Pacific Airways (CAT) (CEO), Tony Tyler is "not getting too excited" about (CAT)'s September traffic figures despite positive trends in both the passenger and cargo sectors. Tyler did say that (CAT), while remaining cautious, "expects an upswing in the last quarter of the year." (CAT) and subsidiary Dragonair (DRG) reported a +0.1% September traffic increase to 6.87 billion (RPK)s on a -9.7% capacity cut to 8.57 billion (ASK)s, driving load factor up +7.9 points to 80.2% LF. The two airlines carried a total of 133,301 tonnes of cargo and mail in September, down -5.8% year-over-year, considerably better than the -12.3% decline for the first nine months of 2009.

General Manager Revenue Management, Tom Owen said, "September saw a welcome seasonal upturn in demand for premium traffic with an improved share of the overall business, but at volumes and yields still well below previous years . . . Reduced capacity, especially on some long-haul routes, provided the context for the higher load factors and improved efficiency." General Manager Cargo Sales & Marketing, Titus Diu added, "The trend of plummeting [airfreight] yields that began in fourth quarter 2008 and continued through the second quarter of 2009, has stopped as volumes have strengthened. We have experienced a gradual improvement in both volume and yield, albeit from a low base. However, it is still too soon to say whether these improvements are the beginning of a sustained recovery."

(CAT) is not currently hiring but is interviewing for the "Cadet" program which is now open to all pilots (FC) regardless of citizenship. (CAT) is still taking deliveries of new 777-300er's and by the end of 2010, the North American route structure will be all 777 for its passenger service. (CAT) is adding Chicago to its passenger network in 2010 and Moscow in 2011. (FC) applicants can view additional details and apply online.

777-367ER (36161, B-KPL), delivery.

November 2009: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7.3 billion (RPK)s traffic in October, down -2% year-over-year, while capacity dropped -10.1% to 8.87 billion (ASK)s. Load factor rose +6.8 points to 82.3% LF.

(CAT) starts four-times-weekly, Hong Kong - Dubai - Jeddah service aboard an A330-300.

(CAT) will offer an economy (Y) seat with extra legroom on long-haul flights for $100 per sector beginning December 1 and on flights to regional and Chinese destination for $25 from January 1. Premium loyalty program members will continue to have access to the seats for free. (CAT) said there will be 2 to 4 seats available on "most flights." The offer is available on Dragonair (DRG) service as well.

China's cargo industry appears to be moving toward consolidation as airfreight players look to mitigate damage from continuing losses that have resulted from the global economic downturn. According to an industry insider, Chinese logistics giant Sinotrans has signed a cooperative agreement with China Eastern Airlines (CEA) and "is considering selling some or all of its stake" in Grandstar Cargo International Airlines (GSC), the joint venture carrier it launched with Korean Air (KAL) last year. Sinotrans owns 51% of (GSC) while (KAL) controls 25%. A further 13% is owned by Hana Capital Company and 11% by Shinhan Capital Company. The industry source said that the Sinotrans stake would be sold to either (CEA) or Air China (BEJ), with which the logistics company signed a similar cooperative agreement earlier this year. A final decision on the stake sale has not been made, the insider said.

Grandstar (GSC) has been unable to turn a profit in its first 17 months of operation. Sinotrans cited a -CNY61.8 million/-$9 million third-quarter deficit on its investment in a recent report to investors. (GSC) has not expanded beyond its initial Tianjin - Frankfurt route.

Additional air cargo consolidation in China could result from Air China (BEJ)'s negotiations with Cathay Pacific Airways (CAT) to launch a cargo (JV) in Shanghai by next spring. Also, (CEA) subsidiary, China Cargo Airlines (CKK)'s merger with Shanghai Cargo Airlines likely will result from the pending (CEA) acquisition of Shanghai Airlines (SHA).

China has 9 cargo carriers that operated a total freighter fleet of 70 airplanes as of December 31, 2008. But hit hard by the global financial crisis, those carriers are suffering from serious financial difficulties, especially on international routes. The (CAAC) last month implemented a series of measures designed to lift the nation's airfreight carriers out of the red, including increasing shipping rates, providing subsidies and encouraging mergers and consolidation.

December 2009: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7.28 billion (RPK)s traffic in November, up +2% year-over-year, against a -5.9% cut in capacity to 8.87 billion (ASK)s. Load factor climbed +6.3 points to 82% LF.

Cathay Pacific Airways (CAT) will launch 4x-weekly, Hong Kong (HKG) - Milan Malpensa (MXP) flights on March 28 with a 777-300ER. (CAT) currently operates 6x-weekly freighter service to (MXP). In addition, daily, (HKG) - Toronto service will be increased to 10x-weekly from March 28 and 2x-daily, (HKG) - Los Angeles service will become 17x-weekly on May 1.

Hong Kong International (HKG) said it will extend a -10% discount on landing and parking charges for an additional 3 months to March 31.

2 777-367ERs (36159, B-KPM; 36165, B-KPN), deliveries.

January 2010: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 8.11 billion (RPK)s traffic in December, a +4% lift year-over-year, against a -2% cut in capacity to 9.67 billion (ASK)s. Load factor climbed +4.9 points to 83.9% LF.

777-367ER (36160, B-KPO), delivery.

February 2010: Air China (BEJ) and Cathay Pacific Airways (CAT) plan to launch their cargo joint venture (JV), an industry insider said. (BEJ) is expected to be the controlling stakeholder with a 51% stake while (CAT) will hold the remainder. (BEJ) plans to launch the venture based on the assets of its Air China Cargo subsidiary. To prepare, it increased its stake in the cargo company to 100% with the CNY718 million/$105 million purchase of Beijing Capital Airport Holding Company's 24% share last spring.

Air China Cargo was launched in 2003 with registered capital of CNY2.2 billion. It operates seven 747F freighters. (CAT) reportedly will provide an additional 5 or 6 747Fs to the joint venture. (CAT) had 25 747Fs as of June 30, 2009, with a 26th operated by its Dragonair (DRG) subsidiary.

The new joint venture will be based in Shanghai in an effort to tap the Yangtze River Delta that is one of China's most vibrant economic regions. Shanghai Pudong ranked as the world's 3rd-largest airport in traffic volume last year. (UPS) and (DHL) both operate hubs there.

777-367ER (36164, B-KPP), delivery.

March 2010: The Cathay Pacific Group returned to profit in 2009, posting a +HK$4.69 billion/+$604.9 million surplus that was reversed from a restated 2008 loss of -HK$8.7 billion, as fuel hedges, one-time gains and capacity and cost cuts boosted the bottom line.

Revenue dropped -22.6% to HK$66.98 billion, but the company benefitted from fuel hedge gains of +HK$2.76 billion and +HK$1.25 billion from the sale of a 12.5% stake in Hong Kong Aircraft Engineering Company (HAECO).

"The global slump resulted in extremely challenging business conditions. While there was some pickup in both our passenger and cargo business toward the end of the year overall, we saw a deep downturn in our key markets which in turn led to sharply reduced revenues," Chairman Christopher Pratt said. "We took a number of measures to help us address the steep downturn in business, including reducing capacity in both Cathay Pacific (CAT) and Dragonair (DRG), reducing operating costs and capital expenditure, introducing an unpaid leave scheme for staff, parking a number of airplanes, working to get concessions from suppliers and requesting a deferral of new deliveries from airplane manufacturers," Pratt added.

Operating expenses were slashed -33.7% to HK$62.5 billion and operating result swung to a +HK$5.73 billion profit from a -HK$8.03 billion deficit in 2008. (CAT) and (DRG) carried a combined 24.6 million passengers last year, down -1.6%, while passenger yield plunged -19.5% to HK$0.511. Load factor rose +1.7 points to 80.5% LF as capacity was cut -3.7% to 111.17 billion (ASK)s.

As of year end, (CAT) operated 32 A330-300s, 15 A340-300s, 23 747-400s, 5 777-200s, 12 777-300s, 14 777-300ERs, 6 747-400Fs, 13 747-400BCFs and 6 747-400ERFs. 1 747-400 is coming off lease this year, and (CAT) expects to take delivery of 1 A330-300 and 4 777-300ERs. (DRG) operates 9 A320-200s, 6 A321-200s and 14 A330-300s. 2 A320-200s are scheduled for delivery in 2010 and leases will expire on 1 of each type. The group's Air Hong Kong (AHK) subsidiary flies 8 A300-600Fs.

"We remain cautious about the prospects for 2010," Pratt said. "Revenues and yields remain below levels experienced prior to the recent downturn and there has not yet been a sustained improvement in premium passenger demand . . . That said, we have many things working in our favor which will help to put us in a stronger position if the current recovery in the world economy is sustained."

Air China (BEJ) and Cathay Pacific Airways (CAT) signed a framework agreement in Beijing establishing a jointly owned, Shanghai-based cargo airline built on the assets of Air China Cargo (CAO).

Air China (BEJ) will hold a 51% stake in the new carrier while Cathay (CAT) will acquire a 25% stake and fund an offshore trust, in the form of a loan, to hold an additional 24%. (CAT)'s total investment in the new venture will be CNY1.67 billion/$244.1 million.

The airlines launched their cooperation in 2006 when they signed a cross-shareholding agreement and announced their intention to form a cargo joint venture. The deal requires approval from relevant authorities and the shareholders of both carriers.

Air China Cargo (CAO) plans to transfer its main operating base to Shanghai Pudong this summer while Beijing will remain an operating base. (CAO) currently operates seven 747F freighters. (CAT) will sell 4 freighters and 2 spare engines to the new airline. Launched in 2003, (CAO) is China's biggest cargo carrier and focuses on the northern China and Yangtze River Delta region. Cathay Pacific's cargo operation is centered on the Pearl River Delta.

(BEJ) Chairman, Kong Dong noted that "the restructuring of (CAO)'s shareholding comprises two major aspects. 1st, through fleet expansion, we efficiently set the platform for future growth. 2nd, 2 strong partners are teaming up with complementary strengths to enhance our competitiveness." (CAT) Chairman Christopher Pratt said, "As a strong home-based cargo airline with a firm foothold in the Yangtze River Delta, (CAO) will ensure an efficient capture of cargo movements that may otherwise divert to rival hubs in the region."

It is noteworthy that Chinese cargo traffic recently has grown far more rapidly than passenger traffic. According to the (CAAC) (CAC), January cargo volume climbed +68.2% year-over-year to 450,726 tons. Domestic cargo rose +52.4% while international routes jumped +120.8%.

April 2010: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 8.08 billion (RPK)s traffic in March, a +6.6% rise year-over-year. Capacity was cut -1.6% to 9.43 billion (ASK)s, lifting load factor +6.6 points to 85.7% LF.

The UK Office of Fair Trading (OFT) announced that Virgin Atlantic Airways (VAA) and Cathay Pacific Airways (CAT) are being investigated for possible price-fixing on the London - Hong Kong route, adding that (CAT) brought the allegations to its attention. "The case concerns a number of alleged contacts between employees of the two airlines over a number of years, which it is alleged had the object of coordinating the parties' respective pricing strategies regarding passenger fares through the exchange of commercially sensitive information on pricing and other commercial matters," (OFT) said. It said it was alerted to the alleged cartel conduct by (CAT), which will gain immunity from any penalty imposed in this case owing to its cooperation. Under (OFT)'s leniency policy, the 1st company to report its participation in an antitrust scheme may qualify for immunity from penalties.

Ironically, (VAA) previously benefited from this rule when it alerted (OFT) to price-fixing it engaged in with (CAT) Oneworld (ONW) alliance partner British Airways (BAB) on fuel surcharges on long-haul flights between July 2004 and April 2006. A criminal trial stemming from that case against three former and one current executives at (BAB) started earlier this month. (BAB) pleaded guilty and was fined £121.5 million by (OFT) in 2007.

Both (VAA) and (CAT) have been served with a formal statement of objections, but "at this stage it should not be assumed that the parties involved have broken the law," (OFT) said. (VAA) said it "intends to robustly defend itself against these allegations dating from 2002 to 2006. The airline does not believe that it has acted in any way contrary to the interests of consumers."

INCDT: Cathay Pacific Airways (CAT) Captain (FC) and First Officer (FC) are being lauded after successfully overcoming apparent erratic power surges in the A330 they were operating and landing at an unusually high speed at Hong Kong International (HKG) this month. Problems started for the crew of CX Flight 780 en route to (HKG) from Surabaya when the airplane, with 309 passengers and 14 crew (FC) - (CA) aboard, was on descent about 20 minutes from Hong Kong. Its 2 Rolls-Royce (RRC) (Trent 700) engines began to behave erratically with significant variations in thrust. When the A330 touched down at 239 kt, 109 kt above the typical landing speed, the right engine was at idle while the left was delivering 70% thrust. The braking required to stop the airplane led to the tires overheating. A small fire resulted that was doused quickly by firefighters. Eight passengers were injured during the evacuation and (HKG) closed a runway for 2.5 hours.

Hong Kong's Civil Aviation Department said it would investigate the "serious airplane incident" and release a preliminary report within a month. Safety experts from Airbus (EDS) and Rolls-Royce (RRC) were due to arrive in Hong Kong to assist local authorities and the airline with the investigation. (CAT) emphasized that at no time were both engines shut down.

Cathay Pacific Airways (CAT) received approval to use the (ARINC) AeroConnx electronic flight bag (EFB) solution and has begun operational evaluation on 777-300s.

777-367ER (36162, B-KPQ), delivery.

May 2010: Cathay Pacific Airways (CAT) and Mexicana (CMA) will code share on Hong Kong - Mexico via the USA. Under the arrangements, (CAT)’s flights between Hong Kong and both Los Angeles and San Francisco will carry (CMA)’s code, and (CMA)'s flights between the
California cities and both Mexico City and Guadalajara will
carry (CAT)’s code.

Iberia (IBE) Maintenance won a contract from Cathay Pacific Airways (CAT) to repair and maintain 49 (CFM56-5C4) engines on 11 A340-300s. The work will be carried out at (IBE)'s engine workshop near Madrid Barajas.

Cathay Pacific Airways (CAT) announced a series of senior management changes effective from July 1 that include a number of moves at director level. James Barrington, currently Director Sales & Marketing, will become Director Corporate Development, while Rupert Hogg, currently Director Cargo, will become Director Sales & Marketing. General Manager Information Management, Tomasz Smaczny was named Director Information Management and the current incumbent in that role, Edward Nicol, will retire after 35 years' service with the Swire Group. Richard Hall, currently General Manager Aircrew, will take up the position of Director Flight Operations, a post currently held by Nick Rhodes, who will become Director Cargo. Ian Shiu, the current Director Corporate Development, was appointed a Senior Director at John Swire & Sons (HK) with a brief that covers staff matters in Hong Kong and strategic developments in mainland China and Taiwan.

(CAT) and major shareholder Swire Pacific will sell their combined 30% stake in Hong Kong Air Cargo Terminals Ltd (HACTL) in anticipation of (CAT) setting up a competing freight operation. When Cathay (CAT) won a franchise to establish its own air cargo terminal at Hong Kong International Airport, it agreed to sell its stake in (HACTL). Other shareholders of (HACTL) will buy the Cathay (CAT) and Swire holdings.

747-444BCF (24976, B-HUR), and 747-467BCF (24925, B-HOU), removed from storage at Victorville and returned to service (RTS).

June 2010: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 7.82 billion (RPK)s traffic in May, a +10.3% rise year-over-year. Capacity grew +2.8% to 9.62 billion (ASK)s, lifting load factor +5.5 points to 81.3% LF.

(CAT) will sell its 15% stake in Hong Kong Aircraft Engineering Company (HAECO) to its parent, Swire Pacific and use the proceeds to develop its core aviation business. The transaction is valued at HK$2.6 billion/$333 million, and (CAT) will earn a profit of about +HK$1.8 billion. The money will be used to support the airline's core business, including investments in airplanes, products and services, as well as a new HK$5.5 billion cargo terminal being built at Hong Kong International Airport. The facility is expected to be operational in 2013. (CAT), which has a fleet of 127 airplanes, is also expanding with 31 planes on firm order for delivery before 2013.

John Slosar (COO) said the long-standing operational arrangement between (CAT) and (HAECO) will remain unchanged. (HAECO) is (CAT)'s main provider of airplane overhaul and maintenance services. (CAT) is (HAECO)’s biggest airline customer. The deal comes 9 months after a similar transaction in which (CAT) sold 12.45% of its stake in (HAECO) to Swire Pacific, reducing its shareholding to 15%.

Starts service to Moscow. This month, Hong Kong Airlines (CRY) also started operations to Moscow using a newly delivered A330-200.

In 1990, mainline China had 17 million airline passengers. So far in 2010, it will have >260 million.

747-444BCF (25152, B-HUS), removed from storage at Victorville and (RTS). 777-367ER (36163, B-KPR), delivery.

July 2010: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew a combined 7.97 billion (RPK)s traffic in June, up +19.6% from the year-ago month. Capacity rose +7.7% to 9.34 billion (ASK)s and load factor improved by +8.6 points to 85.4% LF.

(CAT) and Panasonic Avionics signed a Memo of Understanding (MOU) to equip all (CAT) and Dragonair (DRG) passenger aircraft with full broadband connectivity.

(CAT) is the first airline in Asia to announce its intention to deploy Panasonic's Global Communications Suite and also the first globally to signal its intention to provide the solution across its full fleet. Services will launch from early 2012, subject to regulatory approval. "While final terms are still being negotiated, the (MOU) allows the parties to immediately begin developing the plan to provide connectivity for passengers together with promotional, sponsorship and e-commerce opportunities for Cathay Pacific (CAT) partner brands," (CAT) said.

Panasonic's package will comprise the eXConnect broadband service and eXPhone (GSM) phone service. It will feature a CX-branded free-of-charge entertainment portal accessible through all passenger devices and seat back screens that will include a range of content updated during the flight. It will allow access to airline and partner sites and enable e-commerce, airline-specific advertising and live television with a pay-per-view capability for special events.

EXConnect will provide two-way broadband connectivity supporting a wide range of passenger and crew applications, including Internet access, voice, data and the ability to monitor and transmit airline operational data in real time. The eXPhone service will be offered in collaboration with AeroMobile's (GSM) mobile phone technology and allow passengers to use their mobile phones, smartphones and BlackBerry devices on board to make voice calls, send Small Messaging System (SMS) text messages or utilize data services and stream content wirelessly to their iPods, iPhones and iPads.

(CAT) Head of Product, Alex McGowan said in a statement, "Connectivity will form an important part of our overall customer proposition. Having that connectivity integrated closely with our video-on-demand entertainment system is especially valuable as it means that all passengers will be able to use the service. We believe that being connected is now an expected part of everyday life, not just for business purposes but also to stay in touch with family and friends."

August 2010: Cathay Pacific Airways (CAT) 2009 World Total Passenger Traffic = 89,440 Million (-1.7%) (RPK)s (World Highest #13) (#12); World Total Employees = 20,907 (+1.9%) (World Highest #18). SEE ATTACHED - - "CAT-2010-08-WLD RPK-2009."

Cathay Pacific Airways (CAT) and Dragonair (DRG) posted July passenger and cargo traffic results well above the year-ago semester. The two airlines' passenger numbers jumped +19.5% year-over-year to 2,485,244 in July. Capacity (ASK)s were up +8.8% to 10.05 billion, while (RPK)s increased +14% to 8.7 billion, lifting load factor +4 points to 87.5% LF.

(CAT)/(DRG) carried 157,374 tonnes of cargo and mail, up +18.1% on July last year. Cargo and mail load factor was 76% LF, a rise of +3.4 percentage points, while (ATK)s rose +21.3% to 1.21 billion.

(CAT) posted net income of +HK$6.84 billion/+$881 million in the 2010 1st half, a >8fold increase over a +HK$812 million profit in the year-ago period, an earnings jump that was helped by a +33.7% hike in revenue to HK$41.33 billion.

(CAT) said it enjoyed a strong rebound in premium passenger business and cargo traffic in the six months ended June 30. Its profit increase came despite a +51% jump in fuel prices, a major factor in costs increasing +25.9% to HK$36.37 billion. Operating profit lifted +252% to +HK$7.12 billion from +HK$2.04 billion last year. Current period results benefitted from a +HK$2.17 billion profit on asset disposals, primarily the sale of (CAT)'s remaining 15% interest in (HAECO) to Swire Pacific.

“In the 1st half of the year, the Cathay Pacific Group experienced a continuing and significant recovery in its core business following the extremely challenging conditions experienced for much of the previous year,” said Chairman Christopher Pratt. “Both the passenger and cargo businesses of (CAT) and [subsidiary] Dragonair (DRG) performed well with revenues continuing to increase despite uncertainty over the stability of the global economy.”

He added, “In the premium classes, there was a sharp increase in demand for business (C) travel originating in Hong Kong although this was not matched by a comparable increase in demand for travel originating in other major cities."

Compared to the year-ago period, (CAT) and Dragonair (DRG) increased capacity by +3.6% to 11.43 billion (ATK)s. Passenger numbers jumped +8.5% to 12.95 million. Load factor rose +5.5 points to 84% LF. Yield leaped +17.5% to HK$0.0584 cents. Cargo and mail carried soared +24.4% to 872,000 tonnes.

Responding to an upswing in demand, (CAT) plans to increase its flights in November to Australia and New Zealand, along with additional flights to Canada, France and Japan. Beginning November 15, (CAT) will expand its Sydney service from 24 times a week to 4x-daily; Perth will move from daily to 10x-weekly. Brisbane and Cairns will get another weekly linked flight beginning November 21.
(CAT) will add +2 more flights to Auckland, making a total of 12x-weekly starting November 27. Beginning October 31, +2 more flights will be added to Toronto for a total of 12x-weekly, while Osaka will go from 3x- to 4x-daily from Hong Kong. Paris will get 1 additional flight to 11x-weekly starting December 11.

(CAT) (CEO) Tony Tyler said (CAT) aims to increase overall passenger capacity by about +4% (ASK), returning to 2008 pre-financial crisis levels. While capacity will be back to pre-2008 levels, traffic mix is very different with far greater capacity focused on Australia and New Zealand.

(CAT) announced that it signed a letter of intent with Airbus (EDS) covering the purchase of 30 A350-900s. (CAT) said the Rolls Royce (RRC) (Trent 1000 XWB)-powered airplane will form the backbone of its future mid-size wide body fleet. They are slated for delivery between 2016 and 2019 and will replace (CAT)'s A330s and A340s. The next-generation airplanes will be used across the carrier's network, including on nonstop flights from Hong Kong to Europe and North America.

The (CAT) fleet was strengthened during the 1st half by the addition of 4 new 777-300ERs. Of its 6 passenger airplanes parked in the desert, 4 A340-300s will be returned under terms of their operating leases in 2011. That would leave (CAT) with just 2 747-400s parked.

(CAT) will take delivery of another 12 777-300ERs between now and 2013 and the 1st of 10 747-8Fs will start to arrive in January 2011.

(CAT), announcing a hefty rise in profits based on passenger revenues almost back at pre-crisis levels, said it will also order 6 777-300ERs under purchase rights previously negotiated. (CAT) values the intended orders at HK$75 billion/$9.7 billion based on catalog prices.

The 777-300ER order is subject to negotiations with Boeing (TBC), (CAT) says. It would take (CAT)’s fleet of that type to 36, of which it is awaiting delivery of 12 by 2013. (CAT) assigns the 777-300ER as its standard ultra-long-haul airplane.

September 2010: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew 8.49 billion (RPK)s traffic in August, a +7.6% increase from the year-ago month. Capacity rose +7.1% to 10.06 billion (ASK)s as load factor rose +0.3 points to 84.4% LF.

(CAT) General Manager Revenue Management Tom Owen said that passenger traffic in the economy (Y) cabins remained strong throughout August, with very robust demand out of Hong Kong, particularly on long-haul routes and to holiday destinations in Southeast and Northeast Asia.

(CAT) General Manager Cargo Sales & Marketing, James Woodrow said that cargo traffic in August was not quite as strong as the previous month in terms of volume and tonnage growth lags capacity growth.

(CAT) started 3x-weekly, Hong Kong - Moscow Domodedovo service.

October 2010: Cathay Pacific Airways (CAT) and Dragonair (DRG) flew a combined 7.92 billion (RPK)s in September, up +15.2% from the year-ago month. Capacity rose +12.9% to 9.69 billion (ASK)s and load factor improved by +1.6 points to 81.8% LF.

(CAT) said it will begin code sharing with WestJet (WJI) for travel beginning October 20. Under the agreement, (CAT)'s "CX" code will be placed on WestJet (WJI) flights between Calgary, Edmonton, Halifax, Montreal, Ottawa, and Winnipeg, plus (CAT)'s 2 Canadian gateways, Toronto and Vancouver. Japan Airlines (JAL) and (CAT) have expanded their code share to include flights operated by (CAT) on several destinations beyond Hong Kong. From November 1, (JAL) will put its code on (CAT) flights from Hong Kong to Mumbai, Chennai, New Delhi, Penang, Surabaya, Ho Chi Minh City, Johannesburg, Brisbane, Rome, and Milan. Other routes in the new arrangement are Bangkok - Mumbai, Bangkok - New Delhi and Singapore - Colombo. This will add 11 destinations and 13 new routes to the (JAL) network. The expansion follows their recent agreement to code share on every route between
Japan and Hong Kong, and 13 selected (JAL) domestic routes, from October 31.

A330-343E (1163, B-LAJ), delivery.

November 2010: Cathay Pacific Airways (CAT) has announced in a trading statement that it expects its consolidated profit for the year ending December 31, 2010 will not be <+HK$12.5 billion/+$1.62 billion, “as demand for passenger and cargo services had remained very strong with revenues at high levels.”

The anticipated record profit will arrive only 2 years after (CAT) suffered a record loss in 2008, and despite a recent €57.1 million fine imposed by the European Commission (EC) for air cargo price-fixing.

(CAT) reported net income of +HK$6.84 billion for the 2010 1st half, a > 8fold increase over a +HK$812 million profit in the year-ago period, as revenue jumped +33.7% to HK$41.33 billion.

(CAT) noted that the “very strong profits” earned by its strategic partner, Air China (BEJ), for the 9 months ended September 30, was another contributing factor as (CAT) expects to record “a share of +HK$1.7 billion in profits from Air China (BEJ) for the 2nd half of 2010.” The profit forecast also takes into account the aggregate profits of +HK$2.16 billion from the sale of (CAT)’s interests in Hong Kong Air Cargo Terminals Ltd and Hong Kong Aircraft Engineering Company (HAECO).

While stating that he was “delighted to be so handsomely in the black,” (CAT) CEO Tony Tyler warned that only 2 years ago, (CAT) suffered its worst loss ever, noting that the dramatic turnaround “serves to illustrate yet again the volatile and cyclical nature of our business.” Tyler credited the company's staff for its contribution to the turnaround and for making sacrifices during the downturn of the previous 18 months.

The European Commission (EC) fined 11 airlines a total of €799 million/$1.1 billion for "operating a worldwide cartel which affected cargo services within the European Economic Area." The (EC) said the carriers "coordinated their action on surcharges for fuel and security without discounts over a 6-year period." Air France (AFA) received the largest fine at €182.9 million, followed by its affiliate (KLM) at €127.2 million. Other fines include British Airways (BAB) (€104 million), Cargolux (CLX) (€79.9 million), Singapore Airlines (SIA) (€74.8 million), (SAS) (€70.2 million), Cathay Pacific Airways (CAT) (€57.1 million), Japan Airlines (JAL) (€35.7 million), Martinair (MTH) (€29.5 million), Air Canada (ACN) (€21 million), Qantas (QAN) (€8.9 million) and (LAN) Airlines (€8.2 million).

Lufthansa (DLH) and its subsidiary Swiss International Air Lines (CSR) "received full immunity from fines under the (EC)’s leniency program, as it was the 1st to provide information about the cartel," the (EC) stated.

"It is deplorable that so many major airlines coordinated their pricing to the detriment of European businesses and European consumers," said (EC) VP Competition, Joaquin Almunia. "With today’s decision, the (EC) is sending a clear message that it will not tolerate cartel behavior." The (EC) charged that the "cartel members" coordinated pricing from December 1999 to February 2006.

The (EC) in late 2007 sent out official statements of objections to as many as 25 carriers regarding cargo price fixing. It said that 11 carriers originally charged were not fined.

The (EU), USA Department of Justice, Australian Competition & Consumer Commission, and other authorities worldwide have been investigating anti-competitive practices in air cargo since 2005. Cargolux (CLX) President & CEO Ulrich Ogiermann and Senior VP Sales & Marketing Robert Van de Weg were recently indicted in a USA court on charges of conspiring to fix and coordinate certain surcharge rates on air cargo shipments to and from the USA.

(AFA)/(KLM) said it considered the level of the fine to be "disproportionate given the fact that the economic analysis demonstrated that the actions in question had no detrimental effect on the freight shippers or the freight forwarders. Moreover, the level of the fines disregards the economic hardship that the air cargo industry has suffered, and will have a distortive effect on the level playing field." It added that it intends to appeal the decision to (EU) courts. Because the level of the fine exceeds the level of provisions already taken by the company for potential cargo antitrust payments, (AFA)/(KLM) will book a charge of €127 million for the first half of its current fiscal year.

(SAS) said it has not been involved in a global cartel and the fines are disproportionate. It also plans to appeal the decision, a process that could take several years. The fines will be accounted for in (SAS)'s 3rd-quarter earnings.

Air Canada (ACN) said it may appeal the decision and said the penalty is “more than adequately” covered by a C$125 million provision it made in 2008. "We are highly disappointed and strongly contest the considerable level of the fines, which we believe to be disproportionate to (SAS) Cargo's actions," said (SAS) Chief Legal Officer, Mats Loennkvist. "We have cooperated fully with the (EC) during the entire investigation and, for slightly >4 years, we have disputed the (EC)'s view that (SAS) Cargo has been involved in a global cartel."

December 2010: China's Ministry of Commerce gave the green light for the air cargo joint venture (JV) between Air China (BEJ) and Cathay Pacific Airways (CAT), which is expected to launch by year end or early next year, according to (BEJ) Board Secretary, Huang Bin.

The (JV), which was agreed to in February, will create "Air China Cargo (CAO)." (BEJ) will hold a 51% stake in the new carrier while Cathay (CAT) will acquire a 25% stake and fund an offshore trust, in the form of a loan, to hold an additional 24%. (CAT)'s total investment in the new venture will be CNY1.67 billion/$25 million.

Air China Cargo (CAO) will operate 7 747F freighters. (CAT) will sell 4 747-400Fs and 2 spare engines to the new airline. (CAO) also plans to transfer its main operating base to Shanghai Pudong. An insider at (BEJ) noted both carriers agreed that (CAT) will withdraw all its cargo business from China’s mainland market in 3 years so that the new (JV) can be better positioned in the mainland market. Air China (BEJ) is expected to buy out (CAT)’s belly freight service on all its flights to China’s mainland cities.

The new (JV) is expected to face competition as China Eastern Airlines (CEA) announced in October its new subsidiary cargo carrier (comprised of the assets of China Cargo Airlines (CKK), Great Wall Airlines (GWZ) and Shanghai Airlines Cargo (SHA)) will commence operations January 1 from its base in Shanghai.

In a step that highlights Asia's rapidly growing role in commercial aviation, (IATA) (ITA)'s Board of Governors announced it will recommend that Cathay Pacific Airways (CAT) (CEO) Tony Tyler succeed Giovanni Bisignani as leader of the organization when Bisignani retires following the 2011 Annual General Meeting (AGM) next June.

Tyler, 55, becomes the 1st head of an Asia/Pacific-based airline to lead (IATA), which has had just 6 Director Generals (including Bisignani) since its inception in 1946, all of them from Europe or North America. Tyler will be succeeded at Cathay by (COO) John Sosar, who has held that position since July 2007. Slosar, 54, joined Swire in 1980 and worked with the group's Aviation Division in Hong Kong, the USA and Thailand. He was appointed Managing Director of (HAECO) in 1996 and Managing Director of Swire Pacific's Beverages Division in 1998. Tyler will step down from (CAT) on March 31.

Tyler has led the carrier since 2007 and is also Chairman of (CAT) affiliate, Dragonair (DRG). He joined (CAT) parent, the Swire Group in 1977 and moved to (CAT) a year later. He served as (IATA) Chairman in 2009 - 2010.

"Tony’s leadership of Cathay Pacific (CAT) through challenging times prepares him well for the job. His knowledge of Asia will help (IATA) take advantage of opportunities in the industry’s largest market," said David Bronczek (CEO) of FedEx Express (FED) and Chairman of the (IATA) Board of Governors.

In succeeding the dynamic Bisignani, Tyler will have some large shoes to fill. "Since taking the helm of (IATA) in 2002, Giovanni rebuilt (IATA), restored its relevance and set a very high benchmark for its leadership," Bronczek said, adding, "We are absolutely confident that Tony is the right person to take the association to even greater heights." Tyler said, "I am excited at the prospect of leading (IATA) and fully mindful of the responsibility that this important position bears. Giovanni has made (IATA)'s role critical to the industry by successfully managing (IATA)'s $300 billion financial systems while delivering important industry-wide changes."

(CAT) unveiled its new cabin design that includes new business class (C) seating on its long-haul airplanes from March 2011 to be better positioned with the rising demand spurred by the rapid economic growth in Asia. (CAT) said it plans to spend more than >HK$1 billion/+$12.8 million on the upgrades.

The major change in the lie-flat seat/bed is the rearrangement of the alignment to face the windows on the sides and to face inwards in the center of the airplanes. This reverses the current herringbone layout. The new seats will be rolled out on all (CAT)’s new long-haul A330-300 and 777-300ER deliveries and progressively retrofitted on existing airplanes. By February 2013, all 30 of its 777-300ERs and 20 long-haul A330-300s are expected to have the new product.

With the strong rebound of market demand in Chinese mainland, (CAT) incoming (CEO) John Slosar said that strengthening its China operations will be a priority for (CAT). “We’re going to have a very big focus over the next few years on developing our business in China,” Slosar told reporters in Hong Kong. “There is a huge opportunity there,” he was widely quoted as saying in news reports. Its cargo joint venture (JV) with (CAT) is expected to be formally launched this month or early next year. Separately, (CAT) announced it will launch new routes to Chicago and Abu Dhabi in 2011, as well as increase flight frequencies to New York and Toronto.

January 2011: SEE ATTACHED "CAT-2011-01-2010 WORLD TOP TRAFFIC."

Global Logistics System was appointed services partner for Cathay Pacific Airways (CAT) and Dragonair (DRG) for the implementation of 100% air waybill (AWB) in Hong Kong. The official cutover on January 1, made (CAT)/(DRG) the 1st operating out of Hong Kong to fully switch to the e-(AWB).

Nick Rhodes, Director Cargo for Cathay Pacific (CAT), says that the airline cargo peak out of Hong Kong started in the 2nd week in October, a bit later than normal, and reached its height in the 1st 2 weeks of November. Demand was strong to both the USA and Europe.

(CAT) has disclosed that it plans to promote Director Service Delivery Ivan Chu to Director & Chief Operating Officer, succeeding John Slosar, who is moving up to become (CEO). The 2 promotions are effective March 31, and the catalyst for the change was the decision by current (CEO) Tony Tyler to resign and join (IATA) in July 2011 as Director General. Tyler’s last day at (CAT) is March 31. Chu joined (CAT) in 1984 and has worked with (CAT) in Hong Kong, China, Taiwan, Thailand, and Australia. His previous jobs at the airline include General Manager Taiwan & Korea; General Manager SE Asia; General Manager International Affairs, and General Manager SW Pacific. He was appointed Director Service Delivery in September 2008.

(CAT) is recruiting First Officers flight crew (FC). Applicants can apply, (view additional details and minimum qualifications online).

March 2011: The Cathay Pacific Group reported that annual profits nearly tripled in 2010 to +HK$14.04 billion/+$1.8 billion from a +HK$4.69 billion surplus in 2009 on a +33.7% rise in revenue to HK$89.52 billion. (CAT) additionally announced orders for 25 airplanes from Airbus (EDS) and Boeing (TBC) and inked lease agreements with (ILFC) (ILF) for +2 more, additions aimed at both supporting growth and facilitating the replacement of all of its A340-300s and some of its 747-400s.

Under the transactions, (CAT) will acquire +15 more A330-300s powered by Rolls-Royce (RRC) (Trent 700) engines, 10 additional (GE90)-powered 777-300ERs and a pair of (Trent XWB)-powered A350-900s from (ILFC). All of the airplanes will be delivered before the end of 2015. The latest orders follow last year's commitments for 30 A350-900s to be delivered from 2016 to 2019, and 6 777-300ERs arriving in 2013 to 2014. (CAT) now has 91 airplanes on order.

Meanwhile, the group attributed the bumper 2010 financial result to a global economic recovery that started in the latter part of 2009. Chairman, Christopher Pratt said in a statement, "The rapid turnaround in our business from the lows of 2008 and much of 2009 to the record highs of 2010 is very welcome. It is also indicative of the volatile nature of our business. We cannot afford to be complacent. Our results would be adversely affected, and very quickly so, by a return to recessionary economic conditions. Demand is at present expected to remain strong in 2011, but this expectation could be undermined if the current (or any higher) level of oil prices were to reduce global economic activity."

Full-year operating expenses climbed +28% to HK$78.47 billion and operating profit was +HK$14.08 billion, a nearly threefold rise compared to +HK$5.33 billion in 2009. (CAT) and subsidiary Dragonair (DRG) carried a combined 26.7 million passengers last year, up +9.1% over 2009. Capacity rose +9.9% to 24.46 billion (ATK)s and load factor was 83.4% LF, up +2.9 points. Passenger yield jumped +19.8% to HK$0.612.

(CAT) also announced that all eligible staff will receive a 2010 profit share of five weeks' salary plus either HK$6,000 or half of the employee's monthly salary, whichever is lower. Under this formula, >60% of staff will in effect get a profit share of >6 weeks of salary.

The group's full-year cargo revenue increased +50.1% to HK$25.9 billion. Freight carried by (CAT) and (DRG) increased +18.1% to 1.8 million tonnes, while cargo capacity rose +15.2%. During the year, (CAT) brought back into service freighters that had been parked during the recession.

(CAT) warned that fuel remains the largest single expense, representing 35.6% of total operating costs. (CAT) paid +28% higher on average for fuel in 2010 compared to 2009.

(ARINC) announced that (CAT) has successfully completed a half-year operational trial of its AeroConnx Electronic Flight Bag (EFB) solution on a 777-300. (CAT) said it is "pleased" with the outcome of the trial.

Total Number of Cathay Pacific Airways (CAT) Staff: 19,398 worldwide (as of March 2011). (CAT) and its subsidiaries employ 28,122 people worldwide.

(CAT) and its subsidiaries employ 21,367 staff in Hong Kong, where 13,344 are (CAT) staff, while a further 8,023 work for local subsidiaries, making the Cathay Pacific Group one of Hong Kong's biggest employers.

April 2011: Cathay Pacific (CAT) has increased its shareholding in Air China (BEJ) from 18.43% to 18.77% after acquiring 5.48 million shares for HK$40 million/$5.17 million.

May 2011: Air China (BEJ) and Cathay Pacific Airways (CAT) formally launched their joint venture (JV) cargo operation, consolidating the 2 carriers' airfreight divisions. The (JV), called Air China Cargo (CAO), received Chinese government approval last year. (BEJ) holds a 29.99% stake in (CAT).

(BEJ) owns a 51% stake in the consolidated cargo carrier, while (CAT) holds 25% and also funded an offshore trust through a loan that holds 24%. (CAO)'s fleet will comprise 12 747-400F freighters and its base will be in Shanghai, according to joint statement issued by the airlines. "The consolidation of Air China (BEJ) and Cathay Pacific (CAT)'s cargo businesses is part of the 2 airlines' long-term cooperation strategy," (BEJ) and (CAT) said. "This latest collaboration will increase fleet development and strengthen the market position of both airlines. The operation center in Shanghai will satisfy the market demands of the Yangtze River Delta, which makes up two-thirds of Air China (BEJ)'s service area. The cooperation will help (CAO) reach all-round global development."

There are 7 directors on the (CAO) board. 4, including the Chairman, were appointed by (BEJ), while 3, including the Vice Chairman, were appointed by (CAT).

INCDT: A Cathay Pacific Airways (CAT) A330-300 carrying 136 passengers from Singapore to Jakarta, made an emergency turnback to Singapore after its starboard engine failed. According to (CAT), shortly after takeoff at 12:54 am local time, the flight crew (FC) of CX flight 715 was alerted to a stall warning from the No 2 engine. “The flight crew (FC) shut down the Rolls-Royce (RRC) [Trent 700] engine when they received the alert,” (CAT) said. “An emergency landing was declared and the airplane returned at 1:57 am without incident. Fire services met the airplane on arrival. The airplane stopped on the taxiway and sparks from the No 2 engine were reported. They were doused by fire extinguishers,” said (CAT).

July 2011: American Airlines (AAL) and Cathay Pacific Airways (CAT) expanded their code share agreement to include daily (CAT) Hong Kong service to Chicago O'Hare and Ho Chi Minh City.

August 2011: Cathay Pacific Airways (CAT) blamed high fuel prices for a -59% year-over-year drop in net profit to +HK$2.8 billion/+$359 million for the 1st 6 months of 2011. The slump came despite a +13.2% increase in half-year revenue to HK$46.8 billion. (CAT) said that increased jet fuel prices had a significant effect on operating results in the 2011 1st half. (CAT) and affiliate (DRG) carried 13.2 million passengers during the 6 months, up +1.7% over 2010. Load factor fell by -4.7% points while yield increased +11.8% to HK0.653.

(CAT) reported that its cargo business performed reasonably in the 2011 1st quarter, but demand out of its 2 most important markets, Hong Kong and Mainland China, weakened significantly from April onward. 1st-half 2011 cargo yield was up +7.1% to HK$2.42, while capacity heightened +14.6%. Cargo load factor fell -9.6 points to 68.4% LF.

(CAT) will increase 17x-weekly, Los Angeles - Hong Kong service to 3x-daily on March 2.

(CAT) will launch a premium economy (PY) product on its 777-300ERs from March 2012. The 777-300ERs will be in a 340-seater configuration and be dubbed a 77G in the Global Distribution System (GDS) inventory.

The 777 will have 40C business class seats, 32PY premium economy seats in a 2-4-2 layout and 268Y economy seats in a 3-3-3 design. This layout contrasts with the 2 777-300ER versions (77A and 77D) which have 6 1st-class (F) suites, and either 57C or 53C business-class (C) beds and 238Y economy seats.

(CAT) would not confirm the change but simply said, “Our view is that premium economy (PY) is moving from being a niche product in certain areas to being a more general product.”

(CAT) ordered 4 777-300ERs and 8 777-200Fs, its 1st commitment to that variant, valued at HK$25.6 billion/$3.3 billion at list prices. The 777s, powered by (GE90) engines, are expected to be delivered between 2013 and 2016.

(CAT) already operates 22 777-300ERs and, with the latest purchase, will have another 28 on order for delivery up to 2015. The 777-300ERs will help replace 21 747-400s and 13 A340-300s before the end of the decade. (CAT) said that on a typical 3,000 nm route, the 777-200F will burn -24% less fuel per payload tonne compared to a 747-400BCF. (CAT) said the new 777-200Fs will primarily be used on regional and European routes.

With the latest order, (CAT) has a total of 97 airplanes, comprising 79 wide body passenger jets and 18 freighters, on order for delivery through 2019. The airplanes on order are valued at HK$200 billion at list prices.

SEE ATTACHED - - "CAT-2011-10 - 747-8F 1ST FLT."

September 2011: The Chinese government provided Air China (BEJ) with a CNY1 billion/$156.7 million capital injection to allow (BEJ) to increase its holding in Cathay Pacific Airways (CAT), according to a statement from (BEJ) released by the Shanghai Stock Exchange.

(BEJ) and (CAT) established a cross-shareholding deal in 2006. The most recent investment made by (BEJ) in (CAT) was CNY6.34 billion in 2009 to expand its stake to 29.99%, making (BEJ) the second-biggest (CAT) shareholder.

State-owned (BEJ) received CNY1.5 billion from the government in January 2010 to help it reduce its debt ratio.

Boeing (TBC)'s 747-8F freighter program was dealt another blow when Atlas Air Worldwide Holdings (AAWH) canceled 3 of the 12 747-8Fs it had on order, citing "lengthy delays and performance considerations."

Coming on the heels of Cargolux's (CLX) surprising decision to decline delivery of the 1st 2 747-8Fs, the (AAWH) move raises more questions about the 747-8F's operating performance. A (CLX) executive said the 747-8F had an "overall performance shortfall," but there has been wide speculation that Qatar Airways (QTA), which holds a 35% stake in (CLX), played a strong role in the delivery deferral, in part to express its dissatisfaction with (TBC) over 787 delays.

But (AAWH) has long been eager to take delivery of its 747-8Fs and place them into wet-lease (ACMI) services. The termination of its 1st 3 747-8Fs lends credence to the notion that 747-8F (or, at least, the early-build units) fall short of promised performance metrics.

However, (CAT) said it is "satisfied" with the 747-8F and will accept its 1st of the type next month. (CAT) is due to receive 5 747-8Fs this year, 4 of which are on the flight line at (TBC) facilities in Everett, Washington, and 5 next year. (CAT) has options for a further 10.

(AAWH) said it now expects to receive 3 747-8Fs in 2011, 4 in 2012 and 2 in 2013. The 1st 5 already have been placed under long-term wet-lease (ACMI) contracts with British Airways (BAB) (3) and Panalpina (2). (AAWH) President & CEO William Flynn stated, "As prudent asset managers, terminating the 1st 3 airplanes was the right decision for our fleet, our customers and our stockholders. We expect the remaining 747-8Fs in our order to be better-performing airplanes than those we have terminated."

By the end of 2013, (AAWH)'s cargo fleet is expected to comprise 9 747-8Fs and 24 747-400Fs. It plans to retire its last 5 747-200Fs by mid-2012.

INCDT: Hong Kong’s Civil Aviation Department (CAD) said it is conducting an investigation into a recent loss of separation incident between a Cathay Pacific (CAT) 777-300ER and subsidiary Dragonair (DRG) A330-300. According to the (CAD), the 2 airplanes came within 1 nm/2 km of each other in diverging turns while on approach to Hong Kong International.

The international standard for separation between airplanes is 5 nm/9.26 km horizontally or 1,000 ft/304 m vertically. The (CAD) described the weather that day as “inclement.”

The traffic collision avoidance systems (TCAS) on both airplanes activated and the crew took evasive action. According to the (CAD) report, the (DRG) pilot (FC) put his airplane, carrying 284 passengers and 12 crew, into a climb while the (CAT) airplane, with 299 passengers and 18 crew, descended. “As the avoiding actions by both airplanes were executed in a controlled manner and both pilots (FC) had the other airplane in sight well in advance, there was no risk of collision.”

The (CAD) will conduct a comprehensive investigation into all aspects, including Air Traffic Control (ATC) procedures, manning arrangements during bad weather, flight crew operations and (TCAS) operation procedures.

747-867F (39242, B-LJE), delivery.

November 2011: Cathay Pacific Airways (CAT) announced an expansion of its code share with Japan Airlines (JAL)/(JAS) under which its (CAT) code will be placed on selected (JAL)/(JAS) service from Tokyo Haneda to Izumo, Miyazaki, Misawa, Matsuyama, Nagasaki, Oita, Tokushima, and Ube; Tokyo Narita - Nagoya; and Sapporo - Nagoya.

Hong Kong Aircraft Engineering Company (HAECO) signed an Inventory Technical Management (ITM) contract with (CAT) to provide (ITM) services for (CAT)’s fleet of 10 747-8Fs, to be delivered between 2011 and 2012. (ITM) service includes inventory management, reliability management, supply chain management, technical services, and 24/7 Aircraft-on-Ground (AOG) support, covering 747-8F peculiar components for (CAT)'s Hong Kong base and its line station network.

1st 747-867F (39238, B-LJA) freighter delivery, making (CAT) the 1st carrier in the Asia/Pacific region to operate the airplane. 8 customers have ordered a total of 75 747-8Fs.

2 747-867Fs (39238, B-LJA; 39239, B-LJB), deliveries.

December 2011: Cathay Pacific Airways (CAT) has unveiled its new premium economy (PY) class and upgraded economy (Y) class seats on its long-haul flights from March 2012. The 1st airplane featuring the seats will be a 777-300ER, which will enter service in March on the Hong Kong - Toronto route. (CAT) (CEO) John Slosar said the 2 new products were built on (CAT)’s new business (C) class, introduced earlier this year. The premium economy (PY) product will feature a dedicated cabin with between 26 and 34 seats. Seat pitch will be 38 inch (+6 inch >than economy (Y) class) and the seat will be wider and have more recline. It will have a large meal table, cocktail table, footrest, a 10.6-inch personal television, an in-seat power outlet, a multi-port connector for personal devices and extra personal storage space. Passengers will get priority check-in at dedicated counters and priority boarding before traditional economy (Y) class passengers.
(CAT) plans to have 87 airplanes fitted with the product by the end of 2013.

(CAT)’s new long-haul economy (Y) class seat features a cradle mechanism, the latest high-resolution touch-screen personal televisions, a (USB) outlet and an iPod/iPhone outlet, allowing passengers to connect their own mobile devices to view content through the personal televisions.

(CAT), Tradelink and Global Logistic System Company announced a joint effort to promote an end-to-end, paper-free air cargo process flow. The move supports the implementation of the e-freight project, an industry-wide initiative facilitated by (IATA), involving carriers, freight forwarders, ground handlers, shippers and customs authorities.

NW Aerospace Technologies and Hong Kong Aircraft Engineering Company (HAECO) have been selected by Virgin Atlantic Airways (VAA) to provide cabin reconfigurations for its Gatwick airport (LGW) based fleet of 747-400s. Modifications include new seating, new in-flight entertainment (IFE) with connectivity, plus new interior furnishing and decor.

January 2012: Hong Kong Aircraft Engineering Company (HAECO) has signed a Memo of Understanding (MOU) with Cathay Pacific Airways (CAT) for the management of the group’s airframe rotable components.

Cathay Pacific Airways (CX) has ordered +6 A350-900s for delivery between 2016 and 2017. The order builds on (CAT)’s original commitment to the A350-900 for 30 airplanes placed in September 2010.

(CAT) announced an order for +2 A350-900s in August last year. The A350s will replace (CAT)’s A340s and eventually its A330 fleet.

(CAT) is not currently hiring pilots Flight Crew (FC). See FltOps.com and FAPA.aero.

February 2012: China has prohibited its airlines from participating in the (EU) Emission Trading Scheme (EU ETS), escalating the row over the new and controversial carbon emissions tax. According to a "Reuters" report, the Chinese government’s State Council issued a statement on its website that said Chinese carriers were prohibited from participating in (EU ETS) without government approval, and they were also barred from using (ETS) as a reason to raise fares.

The Association of Asia-Pacific Airlines (AAPA) Director General Andrew Herdman told "Reuters" the ruling put Chinese carriers in a difficult position because they have to comply with (EU ETS), or risk large fines, while also being told by their government that they must not comply. “We’re now at the stage that it’s absolutely clear that a whole host of foreign governments are not going to allow the (EU) to do this,” Herdman said.

Chinese carriers are supporting Beijing’s decision to prohibit its airlines from participating in the European Union Emissions Trading Scheme (EU ETS), while still reserving the right to file a lawsuit.
“We are quite supportive of our central government’s decision and we think the real solution should be a global approach through [ICAO],” China Eastern Airlines Chairman Liu Shaoyong said. He emphasized that domestic carriers are reserving the right to file a lawsuit against the (EU ETS).

China Air Transport Association (CATA) Director General Wei Zhenzhong said that “Beijing’s decision reflects Chinese carriers’ wishes and also is quite helpful to protect the real interest of domestic airlines and air travelers.” (CATA) estimates operating expenses of Chinese carriers will increase by +CNY800 million/+$127.2 million annually because of (EU ETS). Air China (BEJ), which operates the most European routes, is expected to see the largest rise in expenses (+CNY200 million). (CEA) is expected to follow at +CNY100 million.

Expenses associated with the (EU ETS) are predicted to keep rising as Chinese carriers open more international routes to Europe to compete with the high speed rail. This year, (BEJ) is scheduled to launch service from Shanghai - Paris and China Southern Airlines (GUN) plans to open a Guangzhou - London route.

Wei said that Beijing’s decision was just the 1st step in the escalating row over the new controversial carbon emissions tax, as Chinese carriers will most likely be suspended from flying to Europe, a consequence of “not joining (EU ETS).” As a result, the Chinese government is considering counter measures against the (EU ETS) with Russia, India, Brazil, and other countries.

777-367ER (37899, B-KPY), delivery.

March 2012: The Cathay Pacific (CAT) Group posted a net profit of +HKD5.5 billion/+$709 million for 2011, down -62% over net income of +HKD14.05 billion in 2010. (CAT) said the results were affected by “persistently high jet fuel prices” and weak cargo demand due to “instability and uncertainty in the world’s major economies.”

Operating revenue climbed +9.9% to HKD98.4 billion, while operating expenses jumped +19.4% to HKD92.9 billion. Fuel costs rose +37.5% to HKD38.88 billion.

“After a record year in 2010, we faced a number of major challenges in 2011: the instability of the global economy, the weakness of the air cargo market, the reduction of yields in economy (Y) class, the impact of natural disasters in Japan and Thailand, unrest in the Middle East and continued high jet fuel prices,” (CAT) Chairman Christopher Pratt said.

Passenger revenue for the year was HKD67.8 billion, up +14.2% compared with 2010, because of a strong demand for premium class travel. Capacity increased +9.2% to 126.34 billion (ASK)s. Passenger boardings rose +2.9% to 27.6 million, while load factor fell by -3.0 points to 83.4% LF.

Cargo revenue for 2011 increased by +0.3% to HKD25.98 billion year-over-year against a +6.9% increase in (ATK)s to 14.37 billion, due to the earthquake and tsunami in Japan in March 2011 that disrupted the supply chain for high technology products. As a result, the manufacture of such products in Mainland China was affected, reducing cargo shipments through Hong Kong.

Looking ahead, Christopher Pratt said, “Economic uncertainties have continued into the 1st half of this year (while these uncertainties continue, we expect pressure on economy (Y) class yields and our cargo business in particular to remain weak). Fuel prices have risen further. As a result, 2012 is looking even more challenging than 2011. We will continue to be vigilant in managing our costs while not compromising the quality of our products and services or our long-term strategic investment in the business.”

Hong Kong’s Executive Council has (in principle at least) endorsed the construction of a 3rd runway at Hong Kong International (HKI), according to the official Hong Kong government website. The endorsement means the airport authority can proceed with an environmental impact assessment, plan design details and financial arrangements, Secretary Transport & Housing, Eva Cheng told media. The government has asked the authority to conduct the environmental study in a strict and professional manner, looking at marine ecology, noise and air quality. The assessment is expected to take 2 years.

"The government wants the authority to complete the assessment, design and financial options by the end of 2014 so the runway can be built by 2023," news.gov.hk said, adding that the forecast cost of the facility is $136 billion. It will also involve the reclamation of 650 hectares of land from the sea.

A high-level steering committee will be set up to work with the authority on the project, along with a dedicated team led by the associated policy bureau, which is a sign of high level commitment for the project.

Cheng emphasized the need for long-term planning for the airport, as air traffic last year had already reached the forecast demand for 2013, as stated in the (HKI) Master Plan 2030.

In 2011, (CAT) took delivery of 6 777-300ERs, 3 A330-300s and 4 747-8Fs. This year, it is scheduled to take delivery of 19 new airplanes. Earlier this year, (CAT) committed to 6 A350s.

April 2012: Beijing airport (PEK) which handled over 77 million passengers in 2011, is the busiest airport in the region and 2nd place in the world’s ranking (just behind Atlanta). “The other 4 airports in the region with the most passenger traffic are Tokyo Haneda airport (HND), Hong Kong airport (HKG), Jakarta airport (CGK) and Dubai airport(DXB).”

Freight traffic in the region, on the other hand, did not fare as well, recording a decrease of -1.5% compared to 2010. “Hong Kong airport (HKG) continued to be the busiest cargo airport in the world, closely followed by Memphis airport (MEM) and Shanghai Pudong airport (PVG). The other 3 busiest airports in the region with the highest freight traffic are Seoul Incheon airport (ICN), Dubai airport (DXB) and Tokyo Narita airport (NRT).”

April 2012: China Eastern Airlines (CEA) and Cathay Pacific Airways (CAT) have downgraded their 1st-quarter profit forecasts citing the slowdown of market demand and high fuel prices. They also pointed to increasing global economic uncertainties and political turmoil in the Middle East for the forecast downgrade.

(CEA) expects its 1st-quarter profit to drop by >half from CNY1.01 billion/$155.8 million reported in the year-ago quarter.

(CAT) said it may have to park airplanes and reduce the number of flights if weakening demand and high fuel costs persist, according to Dow Jones. (CAT), which had already warned of a very challenging 2012, said business has worsened over the last month with falling passenger yields for its economy-class (Y) products as well as its more profitable first- (F) and business-class (C) cabins.

“Fuel prices remain at crippling highs and our cargo business still shows no sign of any sustained pick-up,” (CAT) (CEO), John Slosar said. “The recent turmoil in the euro zone reinforces the fact that the world is still balancing on a knife edge.”

China Southern Airlines (GUN) earlier this month predicted a sharp 1st-quarter decline, citing similar reasons.

May 2012: Cathay Pacific Airways (CAT), which has warned its 1st-half results are “expected to be disappointing,” said it will cut costs and reduce capacity as operating costs rise due to high fuel prices and economic uncertainty.

(CAT) (COO) Ivan Chu said fuel costs, which account for 42% of the total operating expenses, and fuel hedging is not enough to offset rising fuel expenses.

(CAT) (CEO) John Slosar said (CAT) had previously warned “that 2012 is looking even more challenging than 2011 and we were therefore cautious about prospects for this year. In response to the challenging environment we face, we are reducing costs where possible, including through a reduction of capacity.”

On the passenger side, the Cathay Pacific Group will see its capacity growth reduced to +3.2% from the targeted +7% this year. (CAT) will reduce its flight frequencies on some long-haul routes to North America and Europe.

For cargo, (CAT) will now target +4% growth instead of +7%. (CAT) operates 25 freighters, including 5 747-8Fs.

(CAT) is also expected to deploy more fuel-efficient 777-300ERs on more routes, including flights to San Francisco and Paris, as well as speed up the retirement of its older 747-400s. (CAT) operates 21 747-400 passenger airplanes and will retire 3 this year. (CAT) will retire +5 more in 2013 and 1 more in early 2014, bringing the fleet down to 12 airplanes.

In addition, (CAT) will offer voluntary unpaid leave for cabin crew (CA) from June, will cancel non-essential business travel for staff, and will reduce its marketing and Information Technology (IT) spending.

The Airport Authority Hong Kong (AAHK) has submitted its project profile to the Director of Environmental Protection (DEP) to add a 3rd runway at Hong Kong International Airport (HKG).

The submission marks the launch of the project’s statutory Environmental Impact Assessment (EIA) process and follows government approval in principle for (HKG) to expand to a 3-runway operation.

Members of the public will have 14 days, from May 29 to June 11, to submit written comments before (DEP) issues an (EIA) study brief outlining the scope of environmental issues to be addressed in the (EIA) study and requirements to fulfill. Once the study brief has been received, the (AAHK) and its consultants will undertake a series of studies to assess potential environmental impact.

Technical briefing groups (including environmental experts, green (NGO)s, industry representatives and relevant government officials) will be set up as part of stakeholder engagement activities, supported by community liaison groups. The (AAHK) will also organize exhibitions, talks, airport visits, roundtable briefings and meetings as part of the consultation process.

The (EIA) is expected to take about two years to complete.

(AAHK) Deputy Director Projects, Kevin Poole said the potential environmental impacts addressed in the (EIA) study will cover “air quality, water quality, noise, marine ecology, fisheries, waste management, landscape, visual and cultural heritage.”

(AAHK) (CEO), Stanley Hui Hon-chung said the (AAHK) places “great value on the feedback we collect as we explore all possible ways to avoid, minimize, mitigate and compensate for potential environmental impacts.” He said the expansion of (HKG) would “enhance Hong Kong’s long-term development and overall competitiveness.”

June 2012: Air Lease Corporation (ALE) has acquired 1 2009 777-300ER, which it will lease through 2022 to Cathay Pacific Airways (CAT), a new customer for (ALE).

(ALE) President & (CEO) John Plueger called the deal “an incremental transaction for (ALE) in 2012 that is perfectly in line with our growth plan.”

Northwest Aerospace Technologies has received (FAA) Supplemental Type Certificate (STC) certification and Hong Kong Civil Aviation Department (VSTC) approval for the installation of Cathay Pacific Airways (CAT)’s premium economy product including seats, new cabin monuments and associated furnishing for its 747-400 fleet.

(CAT) said last month it would deploy more fuel-efficient 777-300ERs on more routes and speed up the retirement of its older 747-400s as part of its plan to cut costs and reduce capacity as operating costs rise due to high fuel prices and economic uncertainty.

July 2012: (ARINC) Inc was selected by Cathay Pacific Airways (CAT) to implement an advanced information system on its full fleet of Airbus (EDS) and Boeing (TBC) airplanes. The communications suite offers fully customized, integrated communications management of flight operations, data communication services, cabin services, maintenance, diagnostics and safety information.

Air Lease Corporation (ALE) has acquired 1 777-300ER for lease to Cathay Pacific Airways (CAT) through 2022.

(HAECO) will modify Cathay Pacific (CAT) A340-300s with a premium economy (PY) product under a Northwest Aerospace (EASA) Supplemental Type Certificate (STC) with Hong Kong Civil Aviation Department (VSTC) approval beginning in 2013.

Cathay Pacific Airways (CAT) ordered 10 A350-1000s (TRENT), valued at $3.2 billion, plus it converted 16 of original 36 A350-900s to A350-1000s.

747-867F (39245, B-LJH), delivery.

August 2012: The Cathay Pacific Group (CAT) reported a net loss of -HK$935 million/-$120 million for the 1st 6 months of 2012, a steep reversal from the net profit of +HK$2.8 billion in the 1st half of 2011. (CAT) cited “persistently high price of jet fuel, passenger yields coming under pressure and weak air cargo demand” as the main reasons for the result.

Operating revenues rose +4.4% to HK$48.861 billion against a +11.57% increase in operating expenses to HK$49 billion. Fuel accounted for 41.6% of total operating costs, up +6.5% compared with the same period in 2011. Passenger boardings, including Dragonair (DRG), climbed +8.6% to 14.3 million with an average load factor of 80.1% LF, +0.8%. Cargo traffic volume fell -9.8% to 754,000 tonnes.

(CAT) Chairman Christopher Pratt said: “The cost of fuel is the biggest challenge, although the recent cost reduction will, if sustained, provide welcome relief. We will continue to take whatever measures are necessary to protect the business, managing short-term difficulties, while remaining committed to our long-term strategy.”

(CAT) has now finalized an agreement with Airbus Industrie (EDS) to convert 16 A350-900 XWB orders to the A350-1000 XWB and to exercise an option to order additional 10 A350-1000 XWBs. This deal was originally announced at the Farnborough Air Show last month but still subject to final board of directors approval.

September 2012: Cathay Pacific Airways (CAT) has appointed Tom Owen to Senior VP Americas. Owen will be responsible for the overall management of (CAT)'s American operations, and will be based in San Francisco, the company's USA headquarters. Owen has been associated with (CAT) for 17 years, and has held several management positions. Most recently, Owen was Chief Operating Officer (COO) Logistics, for Steamships Trading Company Limited in Papua New Guinea, a subsidiary of (CAT)'s parent company, the Swire Group.

Hong Kong Aircraft Engineering Company (HAECO) and (CAT) have formed a joint venture (JV) company (HAECO) ITEM Limited (HXITM). The (JV) will provide inventory technical management services to airline customers including (CAT) and Dragonair (DRG). It is 70% owned by (HAECO) and 30% owned by (CAT) and will be managed by (HAECO).

November 2012: Cathay Pacific Airways (CAT) is considering new routes to Europe. Destinations include Berlin Brandenburg International (BER), Dusseldorf International (DUS), Madrid Barajas (MAD) and Manchester Ringway International (MAN) as potential destinations where (CAT) would also be able to use synergies with its Oneworld (ONW) alliance partners Air Berlin (BER), British Airways (BAB) and Iberia (IBE). (CAT) currently serves Amsterdam Schiphol (AMS), Frankfurt International (FRA), London Heathrow (LHR), Milan Malpensa (MXP), Moscow Domodedovo International (DME), Paris Charles de Gaulle (CDG) and Rome Fiumicino Leonardo da Vinci International (FCO) in Europe.

Of its region's 25 largest carriers, (CAT) is the only 1 of 2 (the other is Philippine Airlines (PAL)) who have been shrinking. (CAT)'s mainline capacity (ASK)s for next month are down -8%, and down -7% including its wholly owned subsidiary, Dragonair (DRG). The shrinking started a few months ago when it reduced longhaul frequencies to Abu Dhabi, New York, Rome, and Toronto. Soon capacity to Los Angeles and Melbourne will also reduce. 1 of its main problems is not having access to domestic markets in mainland China, where China's Big Three (Air China (BEJ), China Eastern (CEA), and China Southern (GUN)) have had a lot of growth. (CAT) does not have any European nor North American joint ventures (JV). Rivals such as Korean Air (KAL), Singapore Airlines (SIA) and Thai Airways (TII) have all grown and introduced new low cost carrier (LCC) subsidiaries Jin Air (JIN), Scoot (SCT), and Thai Smile, plus introduction of their A380s.

(CAT) has seen the increased competition on the prize Hong Kong - Shanghai route (now flown by 5 airlines: (CAT)/(DRG), (CEA), Hong Kong Airlines (CRY), Juneyao, and Spring Airlines (CQH)) and similarly the Hong Kong - Singapore route ((CAT), Jetstar (IMU), (SIA), Tiger Airways (TGR) and United Airlines (UAL)).

On the bright side, (CAT) is making airplane interior improvements, advancing in Information Technology (IT), with new airplanes on order. It is retiring its high fuel using 747-400s, replacing with 777-300ERs, and on the cargo side is acquiring its new "Queen of the skies" its 747-867Fs. Its main base Hong Kong airport has plans for a 3rd runway and remains the 12th busiest in the world (in passenger traffic), although Dubai and Jakarta surpassed it this year. Another positive move has been its "strategic agreement" with Air New Zealand (ANZ) which was made this month. This occurred with the exit of (ANZ) from its Hong Kong - London route. The agreement will see the 2 carriers code share on the Auckland - Hong Kong route, and on beyond too, giving (ANZ) greater access to (CAT)'s Chinese and even Indian networks, and give (CAT) greater access to (ANZ)'s routes throughout Australasia and the South Pacific islands. The 2 airlines will offer frequent flier reciprocity as well.

December 2012: Cathay Pacific (CAT), which already offers flights to Mumbai, Delhi and Chennai from its Hong Kong (HKG) base, launched its 4th Indian destination on December 1, and now offers 4x-weekly services to Hyderabad (HYD). Tom Wright, Cathay Pacific (CAT)’s General Manager South Asia, Middle East & Africa, said: “The potential in this market is tremendous: The influx of Information Technology (IT) and pharmaceutical companies into the city has made Hyderabad one of the fastest growing markets. We already see strong corporate and student traffic and believe there is real potential for leisure traffic.” (CAT) will operate the flights using its A330-300s.

(CAT)'s short-term focus is regional Asia, which it will continue to grow in 2013, although overall, (CAT) expects a slight decrease in capacity as it looks to improve profitability on its long-haul network by replacing maintenance-intensive 747-400s with new 777-300ERs.

But in the long-term, (CAT)'s focus is very much on leveraging its short-haul network to feed long-haul flights, meanwhile re-examining its short-haul strategy.

(CAT) is once again evaluating the A380 and 747-8I to see if it needs to grow through capacity increases, stick to its preference for frequency and/or consider new destinations many of its passengers currently reach via connections. (CAT) is also considering how it might tap into the lucrative Asia-Latin America market. And of course, (CAT) must consider what role it will have with alliances.

Yet underpinning these growth possibilities is the fact that (CAT)'s short-haul market is under pressure, and this will only intensify as Chinese airlines and low cost carriers (LCC)s continue to gain strength in its home market – an uncomfortable reality, (CAT) has been shy of admitting.

January 2013: Hong Kong Aircraft Engineering Company Limited (HAECO) named Tse Pak Wing Peter to its board of directors as an additional independent non-executive director. Tse is a non-executive director of (CLP) Holdings Limited and an independent non-executive director of (HSBC) Bank (China) Company Limited.

February 2013: Cathay Pacific Airways (CAT) will add a 5th daily flight on its Hong Kong - London Heathrow service on June 27.

March 2013: The Cathay Pacific Group reported a net profit of +HK$916 million/+$118 million for 2012, down -83.3% from a +HK$5.5 billion profit in the year-ago period. Cathay Pacific Airways (CAT) cited high fuel prices, economic uncertainty, particularly in the eurozone countries and an increasingly competitive environment for the profit decline.

Operating revenue grew +1.0% to HK$99.38 billion, while operating expenses jumped +5.03% to HK97.59 billion. Fuel costs increased +0.8% compared to 2011, which accounted for 41.1% of total operating expenses.

Passenger revenue rose +3.5% to HK$70.1 billion, while cargo revenue fell -5.5% to HK$24.5 billion.

The Group’s airlines carried 29 million passengers, up +5% year-over-year. Traffic rose +2.3% to 103.8 billion (RPK)s on a +2.6% increase in capacity to 129.6 billion (ASK)s, producing a load factor of 80.1% LF, down -0.3 points.

Last month, Cathay Pacific (CAT), Air China (BEJ), and Shanghai International Airport launched a ground handling service joint venture (JV).

19 new airplanes were delivered in 2012 and 92 are airplanes scheduled for delivery through 2020, including A350-900s, A350-1000s and 747-8Fs.

Looking ahead, Chairman Christopher Pratt said, “The Cathay Pacific Group operates in a volatile and challenging industry. The cost of fuel remains the biggest challenge, particularly for an airline such as ours where long-haul operations form a significant part of our total operations. Our financial position remains strong and we will continue to invest in the future.”

(CAT) will increase Hong Kong service to Toronto (7x-weekly to 10x-weekly) and Los Angeles (17x-weekly to 20x-weekly) on March 31. It will also add 3x-weekly flights to Hong Kong - Bangkok service on June 28.

Air China (BEJ), Cathay Pacific (CAT) and Shanghai International Airport have launched a ground handling service joint venture (JV).

The new venture, which has a registered capital of CNY360 million/$57.3 million, is 41% owned by Shanghai International Airport Company and 10% by the Shanghai Airport Authority. Air China (BEJ) holds a 24% stake and Cathay Pacific (CAT)’s wholly owned subsidiary, Hong Kong Airport Services holds the remaining 25% stake.

Shanghai Airport Authority and Shanghai International Airport Company have transferred their existing airport ground handling services contracts (including for Cathay Pacific (CAT) and its subsidiary Dragonair (DRG)) to the (JV). Air China (BEJ) will transfer ground handling services to the (JV) from April 1. The new entity provides ground handling services for 30 carriers, comprising 11 domestic carriers and 19 foreign carriers, accounting for one-third of Shanghai Airports’ market share. Shanghai Airport Authority and Shanghai International Airport Company’s ground handling staff have also been transferred to the new joint venture (JV) company to ensure the continuity of operations at both Pudong and Hongqiao airports.

(HAECO) had HK$477 million/$61.5 million net profit in 2012, down -9.1% from the +HK$525 million earned in 2011. Turnover increased +12.7% year-over-year to HK$5.8 billion. It said demand for airframe maintenance and line maintenance in Hong Kong was strong, and it handled +4.6% more airplane movements in 2012. However, it said it was not able to meet the demand for airframe maintenance in the second half of the year due to a shortage of skilled and semi-skilled labor.

(HAECO) (CAT) won a contract from Cebu Pacific Air (CEB) to provide Engineering Services for its fleet of up to 8 A330-300s. It will provide (CEB) with Inventory Technical Management and Fleet Technical Management services.

(HAECO) (CAT) acquired an additional 26% of Shanghai Taikoo Aircraft Engineering Services Company Limited, increasing its equity interest in the line maintenance service provider to 75%.

(CAT) has ordered 3 additional 747-8F freighters, bringing to 13 the total number of 747-8Fs it has ordered. 8 747-8Fs have already been delivered to (CAT). The latest order also includes options for 5 777Fs.

Boeing (TBC) said it has now received orders for 70 747-8Fs from 9 customers; 28 have been delivered to 6 airlines.

(CAT) said in a filing with the Hong Kong stock exchange that it has cancelled orders for 8 777Fs. These airplanes appear to be the 8 777Fs Air China (CAT) said it was ordering last week to be used by Air China Cargo (CCA), which is a joint venture between Air China (BEJ) and (CAT).

April 2013: Cathay Pacific (CAT) added 3x-weekly to Hong Kong - Toronto (10x-weekly) and Hong Kong - Los Angeles (20x-weekly) services. (CAT) also increases Hong Kong - Mumbai to 10x-weekly (from 7x-weekly). (CAT) begins Abu Dhabi - Riyadh A330-300 service on May 4.

May 2013: Cathay Pacific (CAT) is seeing big growth in traffic on Japan routes, as the weaker yen encourages tourism.

(CAT), the largest carrier in the market from Hong Kong to the Middle East, extended its existing 2x-weekly Hong Kong to Abu Dhabi (AUH) with weekly flights to Riyadh (RUH) in Saudi Arabia on May 4. A330-300s are deployed to operate the route, which competes with existing flights from Etihad (EHD) (13 weekly frequencies) and Saudia (SVA) (daily).

(CAT) will equip its (CAT) and Dragonair (DRG) flight attendants (CA) with Guestlogix handheld payment devices.

July 2013: It is better late than never for Hong Kong to use its proximity and scale with mainland China to cater to the booming China - Maldives market. Chinese nationals are the single largest inbound group to the Maldives, with 230,000 visitors in 2012 (> double the next largest market, Germany, with 98,000 visitors in 2012). A few weeks after Hong Kong Airlines (CRY) resumed service to Male, the main gateway of the Maldives, Cathay Pacific (CAT) on July 22, 2013 opened reservations for 4 weekly flights from October 27, 2013. Reflecting inertia at the legacy carrier, (CAT) spent over a year deliberating on whether to serve the Maldives, while Singapore Airlines (SIA) and charter carrier MEGA Maldives (MEG) effectively cleaned up the market.

(CAT)'s services will bring stiff competition to (SIA). (CAT) and its (DRG) subsidiary have a far deeper China network than (SIA) and its SilkAir (SLK) subsidiary, and connecting through Hong Kong is shorter than via Singapore. But (SIA) has a strong frequency advantage (2X-daily) and uses regional airplanes light on premium seats, whereas (CAT) will use a long-haul airplane heavy on premium seats.

Although there is considerable wealth in the outbound Chinese leisure market, it is still price sensitive and primarily package-driven. Existing operators Hong Kong Airlines (CRY) and MEGA Maldives (MEG) should consider gaining scale to reduce unit costs.

(CAT) took delivery of its 39th A330-300 (1436, B-LBB - - SEE PHOTO - - "CAT-2013-07 - 1000 TH A330") in Toulouse, marking the 1,000th delivery of the wide body twin-engine airplane. (CAT)’s 1st A330 entered service in 1995. “Together with our subsidiary Dragonair (DRG), we operate a total of 54 A330s. +10 A330-300s [are on order to] be delivered,” (COO) Ivan Chu said.

The A330 program was launched in 1987. Its 1st flight was in 1992 and entry into service (EIS) was in 1994 with French carrier Air Inter, which operated the airplane in a 417-seat configuration.
Airbus (EDS) said that as of June 30, it has delivered 502 A330-200s, 22 A330-200Fs and 468 A330-300s to 93 customers, flying with 99 operators. Total order backlog is 74 A330-200s, 23 A330-200Fs and 163 A330-300s.

(CAT) also operates 11 A340-300s, which should be phased out by the end of the decade, Chu said. Dragonair (DRG) has 21 A320 family airplanes in its fleet. (CAT) also has 22 A350-900s and 26 A350-1000s on order with deliveries scheduled from 2016.

(CAT) Chief Operating Officer (COO) Ivan Chu stated (CAT) does not see a need for very large airplanes (VLA) such as the A380 or 747-8I/F.

August 2013: The (HAECO) Group reported a 1st-half profit of +HK$359 million/+$46.3 million, down from +HK$455 million.

Cathay Pacific Airways (CAT) will launch daily, Newark - Hong Kong 777-300ER service on March 1, 2014.

(CAT) (CEO) John Slosar will succeed Christopher Pratt as Chairman in March 2014. Ivan Chu (CAT)’s (COO), will take over as (CEO).

Pratt, who joined the Swire group in 1978 and will have been Chairman for 8 years, is retiring. Slosar will also take over as Chairman of John Swire & Sons, Swire Pacific, Swire Properties and Hong Kong Aircraft Engineering Company (HAECO). Slosar joined the Swire group in 1980. He became (CEO) in 2011. Chu joined (CAT) in 1984.

747-867F (39240, B-LJC), 777-367ER (42142, B-KQG), (BBB) leased, and A330-343E (1443, B-LBC), ex-(F-WWKN) deliveries.

According to FAPA.aero, (CAT) is hiring Flight Crew (FC) cadets. No Captains or First Officers (FC) are expected to be hired this year.

September 2013: Cathay Pacific (CAT) will begin daily, Hong Kong - Newark 777-300ER service on March 1, 2014.

(CAT) has filed a formal objection to the application for an air transport operating license by Qantas (QAN) low-cost carrier (LCC) subsidiary, Jetstar Hong Kong on the grounds it is not a Hong Kong-based airline. Jetstar Hong Kong Chairman Pansy Ho has defended (CAT)’s license application in response to objections from local carriers.

Asia's aviation axis has shifted from Singapore Airlines (SIA) to (CAT) as the region undergoes both cyclical and structural change. (SIA) is more exposed than (CAT) to the weak economies of Europe, while (CAT) can more effectively serve North America, currently a strong market. (CAT)'s Hong Kong hub is far better suited to capturing Chinese growth than is Singapore's Changi, and Hong Kong's more northerly location than Singapore, means diversions through the Middle East on Gulf carriers, are less of a threat than at (SIA).

(CAT)'s decision to offer premium economy (PY) (which (SIA) is still hesitant to do) is bearing fruit. (SIA), however, has made more significant and bolder change than (CAT), embarking on new partnerships and launching long-haul (LCC) Scoot (SCT). These will take time to mature: – Scoot especially.

These factors are unlikely to change in the short term, but the long term contains much greater uncertainty. The possibilities of deep partnerships, acquisition, consolidation, changes in bilaterals or a surge in growth out of India and Indonesia, to name but a few, could potentially re-balance not only (SIA) and Cathay (CAT), but all of Asian (and probably global) aviation.

Hong Kong Aircraft & Engineering Company (HAECO) completed its first heavy maintenance visit 4 (HMV4) on a United Airlines (UAL) 747-400 in August. (HAECO) subsidiary, Taikoo Aircraft Engineering Company began performing reconfiguration and heavy maintenance on 12 767-300s flown by Condor (CDF) in September.

October 2013: Cathay Pacific Airways (CAT) now serves Male (MLE) in the Maldives from its Hong Kong (HKG) hub. The four times weekly service launched on October 27th, and will be operated by (CAT)’s A330-300 airplanes. The 4,820 km route is already served by Hong Kong Airlines (CRY) and Mega Maldives Airlines (MEG), who both operate thrice-weekly flights between the two airports. (CAT) (CEO), John Slosar, said: “The Maldives is the perfect getaway for holidaymakers from Hong Kong and around the world. (CAT) is a premium service airline and our passengers will enjoy the best products and services when they fly with us to the Maldives. The continued expansion of our network highlights our commitment to boosting Hong Kong’s place as one of the world’s great international aviation hubs.” This is (CAT)’s first new route of 2013. Its last new destination was Hyderabad, which it began serving in December 2012.

Hong Kong Aircraft Engineering Company (HAECO) (CAT) has signed an agreement to buy USA Maintenance Repair & Overhaul (MRO) provider (TIMCO) Aviation Services (ASC) in a $390 million cash deal. In a joint statement, the companies said the acquisition is expected to be completed in the first quarter of 2014.

(HAECO) (CAT) is based in Hong Kong and is a Swire Group company. Swire also owns Cathay Pacific Airways (CAT). (TIMCO), headquartered in Greensboro, North Carolina provides airplane technical services, including airframe, line and engine maintenance, cabin modification services, seats and interior products manufacturing.

(HAECO) (CAT) Chairman, Christopher Pratt said, “the acquisition of (TIMCO) (ASC) will expand (HAECO)’s operations and broaden its sources of revenue. We believe that the business and operations of (TIMCO) will fit well strategically with the existing business of (HAECO). In combination, they will be able to offer enhanced airplane maintenance and cabin modification services to a wider range of customers. Additionally, the (HAECO) Group will be able to accelerate the development of technical capabilities, while providing a comprehensive range of products, including for narrow body and regional airplanes.”

777-367ER (41760, B-KQJ), Babcock & Brown leased, A330-343E (1457, B-HWM), ex-(F-WWYO), leased to DragonAir (DRG).

November 2013: Cathay Pacific (CAT) and Air Seychelles (ASY) have a new code share agreement that sees Seychelles being added to the Asian carrier’s network. (CAT) introduced four times weekly flights to the Maldives in October. Under the new code-share agreement, Cathay Pacific (CAT)’s “CX” code will be placed on Air Seychelles (ASY)’s three weekly return flights between Hong Kong and the Seychelles, and two flights per week from the Seychelles to Abu Dhabi.

Meanwhile, Air Seychelles (ASY), which is 40% owned by Etihad (EHD), will add its code to Cathay Pacific (CAT)’s three weekly return flights between Hong Kong and Seoul, and Hong Kong and Melbourne. The code share will also apply to flights from Hong Kong to Perth and to Johannesburg, and flights from Perth to Hong Kong. (CAT)’s (CEO), John Slosar said the new agreement would boost business and leisure travel between the Seychelles and Hong Kong. “It will provide passengers travelling from the Seychelles with more choice and flexibility when travelling through our superb Hong Kong hub to connect to the network of Cathay Pacific (CAT)," he added.

Air Seychelles (ASY) (CEO), Cramer Ball said the deal was an important one for the growing China market to the Indian Ocean island. “This will go a long way to support the growing desire for flights between the Seychelles and China, as well as Asia generally.”

Rupert Hogg has been named as Cathay Pacific Airways (CAT)’s new Chief Operating Officer (COO). Rupert will take over as (COO) from March 2014. Hogg’s appointment follows an earlier announcement that current (COO), Ivan Chu will take over as (CEO) at the same time, while current (CEO), John Slosar becomes (CAT)’s Chairman.

As part of his new appointment, Hogg will also assume a position on the airline’s board. Hogg has held position of (CAT)’s Director Sales & Marketing since August 2010, prior to which he was the Director of Cathay’s cargo business. He also has a long record of experience with other Swire Group companies.

Hong Kong Aircraft Engineering Company (HAECO) (CAT) joint venture Taikoo (Shandong) Aircraft Engineering Company (TAECO) has completed a 737 converted freighter for SF Airlines (SFX), the 100th freighter conversion performed by the (HAECO) Group.

Taikoo (Xiamen) Landing Gear Services Company (TALSCO) will resume operations in December, more than a year after a fire shut down its facility at Gaoqi International airport in Xiamen. (TALSCO)'s USA (FAA) approvals have been reinstated for the full series of Boeing 777s, 767s, 757s, 747s, 737s and Airbus A320s, said Hong Kong Aircraft Engineering Company (HAECO), which holds a 50% stake in the landing gear company.

It added that additional audits will be carried out by other relevant aviation authorities in the coming weeks, and (TALSCO) will reinstate its capabilities under other national authorities in due course.

During the shutdown period, (TALSCO) started work on a new plating shop which is expected to be completed in the first quarter of 2015. The company also made improvements to its equipment, and added more spares and skilled workers. “The company is now well positioned to offer more rotable asset options to large fleet operators requiring multiple landing gear overhaul events within short turnaround time,” said (HAECO).

The fire, which broke out in November 2012, was caused by an electrical failure in a temperature control cabinet. This led to structural damage to the production buildings that required restoration. In March, (HAECO) said that the fire cost (TALSCO) around -HK$4 million/-$516,000 in losses.

(TALSCO), opened in 2008, is a joint venture (JV) between (HAECO), Cathay Pacific Airways (CAT), Japan Airlines (JAL)/(JAS) and four other partners.

Messier-Bugatti-Dowty will provide landing-gear restoration and support services for Cathay Pacific Airways (CAT) and Dragonair (DRG) A330s and A340s. The agreement extends support until 2024.

December 2013: Cathay Pacific Airways (CAT) will move its freighter operations from Dubai International to Al Maktoum International at Dubai World Central (DWC) from February 1st, 2014.

Dubai is (CAT)’s transit hub for its European destinations including Amsterdam, Frankfurt, London, Manchester, Paris, and Milan. (CAT) operates 7x-weekly 747F freighter services and 14x-weekly passenger services in Dubai.

While the freighter operation will move to (DWC) next year, the passenger operations will remain at Dubai International.

Dubai Airports VP Forecasting & Research, Helen Woodrow said the move is a significant development for the new facility. “As an upcoming cargo hub located at the heart of a unique development and connected to the Jebel Ali Freezone and Jebel Ali Port, Al Maktoum International at Dubai World Central offers many advantages for cargo operators. It’s a win-win proposition for the airline and the airport.”

Taikoo Engine Services (Xiamen) (TEXL), a Hong Kong Aircraft Engineering Company (HAECO) (CAT) subsidiary, has completed its 100th (GE90-110/115B) engine overhaul, this one for Cathay Pacific Airways (CAT). The other 99 were done for 10 other airlines and (GE) Capital Aviation Services (GEF). (TEXL) does quick turns, full overhauls and component repair of the (GE90) engine.

Cathay Pacific (CAT) unveiled the third edition of its "Spirit of Hong Kong" livery at a ceremony on December 9th. The livery features the silhouettes of 110 winners selected from a competition, and was painted onto one of (CAT)’s Boeing 777-300ER airplanes. The first "Spirit of Hong Kong" livery was unveiled in 1997, followed by a second edition in 2000. SEE ATTACHED - - "CAT-2013-12 - SPIRIT OF HONG KONG."

Cathay Pacific (CAT) is the first Asian airline to order Boeing’s 777X with a $7 billion order for 21 777-9X airplanes. (CAT) placed the 777X order as part of its future long-haul fleet strategy. Boeing launched the 777X program at the Dubai Airshow with a record 259 orders worth $95 billion at current list prices.

John Slosar, (CEO) at Cathay Pacific Airways, said the 777-9X fits with their fleet expansion, because its improved payload range capability and reduced operating costs compared to the current 777s within its fleet, including the 777-300ER.

The $377 million 777-9X has a range of more than >8,200 nautical miles, powered by (GE9X) engines with capacity for 400 passengers. According to Boeing (TBC), the 777X series’ composite wings, new engines and advanced technologies lead to a -20% reduction in fuel burn over today's model. "We think it will be an ideal fit for long-haul destinations in North America and Europe, in particular those routes where we carry high volumes of passengers and cargo each day. (CAT) is committed to modernizing its fleet to provide a superior experience to passengers," said Slosar.

(CAT) carrier is also expecting the delivery of 12 Boeing 777-300ERs beginning in 2014, and will add 50 of this airplane type to its fleet by 2020. Deliveries of the 777-9X to (CAT) are scheduled to begin in 2021.

Boeing (TBC) delivered the first 747-8 with performance-improved (GEnx-2B) engines as part of the airplane’s Performance Improvement Package (PIP.) A Cathay Pacific Airways (CAT) 747-8F Freighter was the first 747 to deliver with the (PIP) engines.

The engine is the first of the package’s three improvements to enter service. The two other components, Flight Management Computer (FMC) software upgrades and reactivation of the horizontal tank fuel system on the 747-8I Intercontinental, are expected to enter service later this month and in early 2014, respectively.

“This is a significant milestone for the 747 program. These upgrades are part of our commitment to continually improve the 747-8 for our customers,” said Eric Lindblad, VP & General Manager of the 747 program.

The (PIP) engine improves the airplane’s efficiency by +1.8%. “With this improvement, 747-8 customers will use roughly -30 less semi-sized trucks of fuel per airplane per year,” said Bruce Dickinson, 747-8 Chief Project Engineer & VP.

All three (PIP) components can be retrofitted on the 747-8. The tail fuel reactivation is applicable only for the 747-8 Intercontinental and the (FMC) upgrades can also be made to 747-400s.

Boeing (TBC) announced a new order from Cathay Pacific (CAT), on December 27 for an additional 747-8F Freighter and three 777-300ER (Extended Range) airplanes, a $1 billion order at current list prices.

The new order was announced following a $7 billion order by the Hong Kong-based carrier for 21 Boeing 777-9X airplanes a week earlier.

(CAT) is in the midst of growing its commercial passenger and air cargo fleet. "Both the 777-300ER and the 747-8F Freighter offer a highly efficient solution on Cathay Pacific (CAT)'s ultra long haul routes, combining superb operating economics with a significant reduction in emissions. These two airplane types will form the backbone of our long haul passenger and freighter fleets through to the end of the decade," said John Slosar, (CEO) of (CAT).

(CAT), Hong Kong’s flag carrier operates 55 777s, including 38 777-300ERs and an all-Boeing freighter fleet that includes 13 747-8F Freighters. With this order, Cathay Pacific will have 21 777-9X airplanes, 15 777-300ERs and one 747-8F Freighter on order with Boeing.

3 737-867Fs (43394, B-LJK; 43536, B-LJL; 43825, B-LJM), and 2 777-367ERs (41430, B-KQK; 41431, B-KQL), deliveries.

January 2014: Singapore Airlines (SIA), SilkAir (SLK), Cathay Pacific (CAT) and Dragonair (DRG) have adopted Abacus electronic miscellaneous document (EMD) technology, creating a new paperless ticketing environment, per (IATA) (ITA)’s mandate that all miscellaneous documents issued from January 2014 to be electronic.

Taikoo Engine Services (Xiamen) (TEXL), a Hong Kong Aircraft Engineering Company (HAECO) subsidiary, has completed its 100th (GE90-110/115B) engine overhaul, this one for Cathay Pacific Airways (CAT). The other 99 were done for 10 other airlines and (GE) Capital Aviation Services (GEC). (TEXL) does quick turns, full overhauls and component repair of the (GE90) engine.

(PEMCO) World Air Services (ASC) has a new multi-year contract with JetBlue Airways (JBL) for heavy maintenance services on Airbus 320s for up to five years. Beginning in 2014 with up to two lines of A320 heavy maintenance, the new (JBL) program will support 200 Tampa-based employees. Over the past four years, (PEMCO) and (JBL)’s Technical Operations team have completed nearly 250 maintenance visits in Tampa.

(TIMCO) Aviation Services (ASC), which (HAECO) (CAT) is acquiring, has signed a new contract with JetBlue Airways (JBL) for Maintenance Repair & Overhaul (MRO) on Airbus A320s for three years, effective January 1st, with a two-year extension option. The work includes scheduled airframe maintenance and support for unplanned maintenance events and needs. All work will be performed in Lake City, Florida.

Cathay Pacific Airways (CAT) has awarded L-3 Link Simulation & Training a contract for two Airbus A350 full-flight simulators (FFS) plus trainers, marking Link’s first order for A350 products.

The (FFS)s and two pilot (FC) transition trainers, plus a number of flight management system trainers will be installed at (CAT)’s flight training center in Hong Kong and become operational during the third quarter of 2015 to support A350 fleet introduction the following year.

(CAT) has 46 A350s on order, a mix of A350-900 and A350-1000 variants.

The trainers will be based on L-3 Link’s RealitySeven simulation architecture. The (FFS)s will be equipped with Link’s (eM2K) motion system.

February 2014: Cathay Pacific Airways (CAT) began 7x-weekly freighter services from Dubai World Central with Boeing 747-8Fs.

Emirates (EAD)’s new Taipei service is operated by a Boeing 777-300ER, equipped with 8F luxurious private suites in First Class, 42C lie-flat seats in Business Class, and generous space for 304Y passengers in Economy Class. In-flight passengers enjoy gourmet cuisine in all classes, served by (EAD)’s multinational cabin crew of over 132 nationalities, including Taiwanese.

The move by Emirates Airline (EAD) to add a new service to Taipei would divert Taiwan transit passengers from Hong Kong to Dubai, dealing another blow to Cathay Pacific Airways (CAT)'s long established and lucrative network business in the region, analysts said.

(EAD) will challenge Cathay (CAT)'s dominant role on the Taiwan - Europe route because the deep-pocketed carrier can leverage its better European network and competitive airfares.

Some 65% of the transit passengers from Taiwan opt to fly with Cathay (CAT) now, because Taiwan has limited choices in international air services, said Edwin Lau Wing-chu, (EAD) VP Hong Kong & Taiwan. Taiwan has direct flights to just four European cities: Paris, Frankfurt, Vienna, and Amsterdam. "Taiwan is not a big market but [is one] with good potential as its long-haul market is under served," Lau added.

With an eye on luring Taiwanese travellers to fly via Dubai to Europe, the Middle East or other destinations in North and South America, (EAD) kicked off six weekly flights to Taipei, deploying Boeing 777-300ER airplanes.

Lau said when the extension of the south runway at Taipei Taoyuan International Airport is completed next year to meet the requirements for Airbus 380 landings, (EAD) will consider switching to the A380. Lau also said it is likely that the service will be extended to twice daily in the near term.

"Any airline wanting to compete with the Middle East carriers is destined to be on the losing end, given that airlines is a network business and the international network of (EAD) is expanding in accordance with its aggressive acquisition of planes," said Eric Lin, a transport analyst at (UBS). "In the long run, Hong Kong's hub status is at risk" because transit passengers to North America will eventually shift to mainland carriers, when they expand their international services, Lin said.

Cathay (CAT) has already seen the threat to its European routes from Middle East-based carriers, so has shifted its focus to North America, where it upgraded its New York service to four times daily.

(CAT) and its subsidiary, Dragonair (DRG) flew five million passengers between Hong Kong and Taiwan last year, ranking No 3 after Taiwanese airlines China Airlines (CHI) and (EVA) Airways. (CAT) said 4% of the five million passengers flew beyond Hong Kong to Europe. In terms of international traffic serving Taiwan, the (CAT) group has a share of 16%.

INCDT: A Cathay Pacific (CAT) A340-313X (CFM56-5C4) (157, /96 B-HXE) performing flight CX-270 from Amsterdam (Netherlands) to Hong Kong (China), was climbing out of Amsterdam's runway 18L, when the flight crew (FC) reported to (ATC) departure staff that they had problems with the flaps and possibly needed to return to Amsterdam. The (FC) subsequently worked the relevant checklists attempting to reset the flaps system, however, without success, and subsequently decided to return to Amsterdam. The airplane dumped fuel at FL140 and returned to Amsterdam for a safe landing on runway 27 about 90 minutes after departure.

As a result, passengers complained that their flight was delayed by 48 hours. The A340-313X was still on the ground in Amsterdam 33 hours after landing.

Rolls-Royce (RRC) and Cathay Pacific Airways (CAT) have agreed to "TotalCare" support for (Trent 700) engines on 60 Airbus A330s in service or on order. The contract will run for as long as (CAT) and sister-company Dragonair (DRG) operate (Trent)-powered A330s.

Hong Kong Aircraft Engineering Company (HAECO) (CAT) has completed acquisition of (TIMCO) Aviation Services (ASC).

Fuel efficiency and the ability to add more ultra-long routes, as well as increase frequency on key city pairs, were key drivers in Cathay Pacific Airways (CAT)’s decision to order the Boeing 777X. (CAT) became the first Asian airline to order the 777X, signing a deal in December for 21 of the 777-9X variants at a list price of HK$58 billion/$7.5 billion. Deliveries will take place between 2021 and 2024.

Speaking to journalists at the Singapore Airshow as part of a Boeing 777X briefing, (CAT) Engineering Director, Christopher Gibbs said the importance of fuel efficiency “cannot be understated.”

(CAT) will operate the 777X on thicker routes of 16 hours or longer to North America and Europe, Gibbs said. (CAT) currently operates five daily flights to New York, four to Los Angeles and five to London.

“Frequency is very important to our customers. The 777X will give even more efficiency on those routes with +40 more seats,” Gibbs said.

(CAT) has 26 airplanes currently assigned to ultra-long haul routes; 10 for New York, eight for Los Angeles and four for Toronto and Chicago. Gibbs said the 777X will open up the possibility of adding more long-haul routes, particularly to North America.

Gibbs added that in making their selection of the 777X, (CAT) had no concerns about the reliability of its folding wingtips, which allow the larger airplane to park in a standard 777 bay. “We are very confident that it will be 100% reliable, as are our flight crew (FC),” he said.

March 2014: Cathay Pacific Airways has reported an attributable profit of +$337.5 million for 2013, compared to a profit of +$111 million in 2012. “We are definitely back in profit,” (CAT) (CEO), John Slosar said in an interview.

Although Slosar noted cargo operations had been “a drag” on (CAT)’s bottom line, he said the introduction of the new Hong Kong cargo terminal (and the disposal of four freighters) would enable more efficiency in cargo operations. "The things we did a year ago are paying off,” he said.

(CAT) attributed its 2013 improvement in performance “largely to the strengthening of its passenger business” and conservative fuel hedging. Fuel, it said, accounted for a “significant cost,” at 39% of total operating costs in 2013. Offsetting that, (CAT)’s passenger revenue increased +2.4% to $9.25 billion. This was complemented by a load factor increase of +2.1 points to 82.2% LF, and a yield increase of +1.8%.

These were also helped by an overall capacity decrease of -1.8% through the pensioning of five Boeing 747-400s and a rationalization of long-haul frequencies on some routes, as well as the introduction of 19 new and more fuel-efficient airplanes.

Speaking of the new $760 million cargo terminal (CAT) opened last year, Slosar (who is due to step down from the post this year) said (CAT) “would not have chosen to open [the cargo terminal] when we did” if the company had known the cargo market would contract as it has.

“But the [cargo] market may heat up,” he added. “It will be interesting to see how things change now we have more efficient airplanes.”

Cathay Pacific Airways (CAT) expanded its presence in the USA with a new service from its Hong Kong (HKG) base to New York Newark (EWR) on March 1st. The 12,971 km sector is served daily, utilizing (CAT)’s 777-300s. (CAT)’s new service will face direct competition from United Airlines (UAL)’s daily flights. (CAT) has been serving New York (JFK) with thrice-daily flights from Hong Kong since 1996.

(CAT) stops its services from Hong Kong to Jeddah and Abu Dhabi from March 30th. Citing commercial reasons, the move was believed to be part of a strategic rethink of its summer schedules to the Middle East. It has also announced it will be increasing its rotations to Bahrain to daily flights with an intermediary stop in Dubai.

April 2014: Cathay Pacific Airways (CAT) will begin 4x-weekly Boeing 777-300ER service to the UK’s Manchester International Airport (MAN). The new schedule, slated to start in December, will be the only nonstop direct service between Hong Kong and Manchester, which is establishing itself as a major hub in northwest England. Manchester is ranked third in the UK, after London Heathrow (LHR) and Gatwick (LGW), in terms of passenger throughput.

Inbound flights will arrive in Manchester from Hong Kong at 6:20 am, every Monday, Tuesday, Thursday and Saturday. Flights will depart from Manchester the same day, departing at 12:00 am and will arrive in Hong Kong at 7:55 am every Tuesday, Wednesday, Friday and Sunday.

Cathay Pacific (CAT) (CEO), Ivan Chu said, “We have a deep commitment to the UK market and business ties between the UK and Hong Kong are very strong. He said that by providing more flights to the UK, (CAT) will offer passengers even more choice and flexibility, on top of its existing 5x-daily services to (LHR).

Trucks carrying every product imaginable once flooded into Hong Kong from across the border in China's manufacturing heartland in the Pearl River Delta. Within a day or two, some of their more precious cargo ended up on the shelves of high-end shops in cities as far afield as London, New York, Sydney, and Melbourne.

Today, trucks from the mainland still make the trip to the world's largest air-cargo hub in Hong Kong, where their goods are bundled onto planes for flights that criss-cross the globe.

But China's manufacturing base has become dispersed. Now, iPhones are produced in Jiangzhou in the middle of China, iPads in the south-west city of Chengdu, and laptops and other electronic goods for global companies such as Hewlett-Packard, Toshiba and (ASUS) in Chongqing in the south-west. "Before, we could just sit here in Hong Kong and the trucks just came over the border from the Pearl River Delta (that was the factory of the world). It is still the factory of the world, but there are now other factories of the world," Cathay Pacific (CAT) Cargo Director, James Woodrow said.

It has forced (CAT) and other airlines to literally chase cargo around China, and increasingly to new manufacturing centers in Bangladesh, Vietnam, and Cambodia. (CAT) has freighters flying six days a week just to Hanoi to pick up electronic goods from two factories in the Vietnamese capital.

Coupled with the boom in parcel freight from online shopping, airlines such as (CAT), Singapore Airlines (SIA), and Qantas (QAN) should be rolling in money. (QAN) has a 5% share of the air-freight market between China and the USA (the world's two biggest economies) with routes including Chongqing - New York.

(HAECO) (ITM) Limited and Thai Airways (TII) have embarked on a long-term collaboration in component repair. (HXITM) has identified a list of components that will be repaired at Thai Airways (TII)’s facilities in Bangkok. The collaboration also leverages extensive component capabilities of (HAECO) in Hong Kong.

Oneworld (ONW) alliance partners, Cathay Pacific Airways (CAT) and Qatar Airways (QTA) have reached a new code share agreement. The announcement came as (CAT) formally marked the inauguration of its new Hong Kong - Doha service, which began March 30. The twice-daily service is being followed by a major expansion of cooperation between the two carriers. It expands Qatar Airways (QAT)’s reach in Asia, while Cathay (CAT) will get greater access to Middle Eastern and European destinations.

From April, Cathay Pacific (CAT) flights between Hong Kong and Sydney, Melbourne, Brisbane, Perth, Cairns, Adelaide, Auckland, Tokyo, Osaka, Nagoya, and Seoul will carry Qatar Airways (QTA)’s QR code. Qatar Airways (QTA)’s flights between Doha and Jeddah, Nairobi, Athens, Geneva, Madrid, Barcelona, and Venice will reciprocate with Cathay Pacific (CAT)’s CX designator.

Cathay Pacific (CAT) (CEO), Ivan Chu said: “Cathay Pacific (CAT) has been serving the Middle East for more than >30 years and we are committed to developing our presence in this ever-growing market.”

Qatar (QTA) (CEO), Akbar Al Baker said the new code share routes “will expand travel options for Qatar Airways (QTA) passengers across routes in Australasia and North Asia.”

SEE VIDEO CATHAY PACIFIC 777 CHICAGO TO HONG KONG - -

May 2014: Cathay Pacific (CAT) will launch 4x-weekly, Hong Kong - Manchester Boeing 777-300ER service on December 8. (CAT) will launch direct services from Hong Kong to Zurich from March 29th, 2015. The daily services will be operated by four-class configured Boeing 777-300ERs. (CAT) will compete with Swiss Air Lines (CSR) on the route.

Cathay Pacific (CAT) subsidiary, Dragonair (DRG) has named Algernon Yau as its new (CEO), succeeding Patrick Yeung, who is moving to become Cathay (CAT)’s Group General Manager, Taiwan & Korea. Yau has been heading Cathay Pacific Services, which operates the airline’s cargo terminal at Hong Kong, since mid-2011. He joined Dragonair (DRG) in 1994 having previously worked with Cathay Pacific (CAT), which eventually took over Dragonair (DRG) in 2006.

Cathay Pacific (CAT) has also disclosed a number of senior management changes, with three new directors appointed: Dane Cheng, becomes Director Sales & Marketing, succeeding Rupert Hogg following his move to the Chief Operating Officer (COO) role. (CAT) has also appointed James Ginns as Director Service Delivery, while James Tong becomes Director Corporate Affairs.

June 2014: Cathay Pacific (CAT) has added a fourth daily, Los Angeles - Hong Kong Boeing 777-300ER flight. (CAT)'s daily service to Chicago will increase to 10x-weekly on August 2.

777-367ER (41761, B-KQN), and A330-343 (1523, B-LBE), ex-(F-WWKZ), deliveries.

July 2014: The world's top 10 airlines . . . and Qantas (QAN) is no longer one of them.

Cathay Pacific (CAT) was named the "World's Best Airline for 2014."
Qantas (QAN) slipped down from tenth in 2013 to 11th this year.
The awards are announced annually at the Farnborough International Air Show by Skytrax who conducts a survey with more than >19 million passengers worldwide.

Cathay Pacific (CAT) has passed last year's winner, Emirates (EAD). Along with the title for the year, (CAT) also nabbed a record, becoming the only carrier to win the prestigious award four times after claiming the title in 2003, 2005, and 2009.

(QAN) slipped out of the top 10 for the second time, coming in at number 11. Last year, (QAN) ranked 10th, and its highest position was in 2008, when it was named third in the world. It comes after some setbacks for (QAN) this year, including job losses and questions over foreign ownership.

See more in: [http://i.dailymail.co.uk/i/pix/2014/07/16/article-2693884-1FAC890800000578-241_634x389.jpg]
and
[http://i.dailymail.co.uk/i/pix/2014/07/16/article-2693884-1FAC9B9900000578-910_634x444.jpg]

Earlier this month (QAN) suffered some bad press when an Airbus A380 bound for Melbourne was forced to turn back after water flooded the aisles. A leaking pipe caused water to spill into the upper deck cabin, prompting some passengers to share photos on social media.

Malaysian Airlines (MAS), previously a top 10 airline on three different occasions, experienced a sharp decline in the wake of Flight MH370's disappearance, is now ranked at 18th.

The annual World Airlines Award announcement came at the Farnborough International Air Show in the UK, and the awards are based on research by aviation firm Skytrax.

Cathay Pacific (CAT) (CEO) Ivan Chu told "The Sydney Morning Herald" that he was 'extremely proud, for both (CAT) and Hong Kong' to receive the award.

Second and third place were given to Qatar Airways (QTA) and Singapore Airlines (SIA), while Emirates (EAD) slipped to fourth from first place in 2013.

Locally, it was better news for (QAN) as they were named the Best Airline in the Australia/Pacific region. Virgin Australia (VOZ) and Air New Zealand (ANZ) rounded out the top three.

Indonesian airline Garuda (GIA) won the award for best cabin crew.

The best first (F) class cabin was taken out by Singapore Airlines (SIA).

(QTA) was ranked in the top spot for the best business (C) class, while Korean airline, Asiana (AAR) had the best economy (Y) class cabin.

Jetstar (IMU) was the fourth best budget airline, with AirAsia (ASW) and AirAsiaX (ASX) coming in first and second.

The "Sydney Morning Herald" reported that the Skytrax Awards survey nearly 19 million airline passengers from 160 countries worldwide to come up with the results.

The World Airline Awards are non-for-profit and free from any third party influence, and any airline passenger worldwide can cast a vote.

Last month, Etihad Airways (EHD) tried to withdraw from the rankings, citing a disagreement with the rating system but despite this, came in ninth overall. As airlines are chosen by consumers they cannot be omitted form the awards.

AIRLINE OF THE YEAR 2014
1. Cathay Pacific Airways
2. Qatar Airways
3. Singapore Airlines
4. Emirates
5. Turkish Airlines
6. (ANA) All Nippon Airways
7. Garuda Indonesia
8. Asiana Airlines
9. Etihad Airways
10. Lufthansa

BEST IN AUSTRALIA AND PACIFIC
1. Qantas
2. Virgin Australia
3. Air New Zealand
4. Jetstar Airways
5. Fiji Airways
6. Tiger Airways (Australia)
7. Air Tahiti Nui
8. AirCalin
9. Air Vanuatu
10. Solomon Airlines

August 2014: Cathay Pacific Airways (CAT), Asia's biggest international airline by passengers, reported its profit results that lagged behind estimates as competition with Middle East carriers held down fares, and losses from affiliates widened.

Net income jumped 14-fold to +HK$347 million/+US$45 million in the six months ended in June, compared with the +HK$462 million median profit estimate in a "Bloomberg News" survey of eight analysts. (CAT) made a forecast that business "would be better" in the second half of the year.

Passenger yields fell in the first half amid competition with Emirates (EAD) and Etihad Airways (EHD), which are challenging Asian airlines, and offering features such as showers and butlers. (CEO), Ivan Chu has ordered new planes and is adding flights to the USA and Europe even as a weakness in the cargo market, that started with the global financial crisis, persists.

"Yields are disappointing," said Andrew Orchard, a Hong Kong-based analyst at (CIMB) Group Holdings. "Yields in the first half were a bigger drop than some of its peers. They had to put in promotional fares because of the long-haul routes that were added to the network and that has had a negative impact on pricing."

(CAT) shares extended their decline after (CAT) reported earnings. The stock fell as much as -1.6% and traded down -1.3% at HK$14.74 as of 1:24 pm in Hong Kong trading. (CAT) has declined 10% this year, while the Hang Seng advanced +5.8%.

Passenger yields fell -3.5% to 66.6 Hong Kong cents. (CAT) and its Hong Kong Dragon Airlines (DRG) carried 15.4 million passengers in the first half of the year, +6.5% more than a year earlier, helped by growing travel demand to Northeast Asia and North America. (CAT) filled 83.6% of all seats, an increase of +2.3% points.

"The operating environment for the Cathay Pacific Group and the aviation industry as a whole remains challenging," Chairman, John Slosar said. "This makes it difficult to maintain yields. We expect business to be better in the second half of 2014."

The loss from associates in the first half widened to -HK$265 million from -HK$155 million a year earlier. Global airline earnings are likely to generate net income of +US$18 billion in 2014, +70% higher than a year earlier, the International Air Transport Association (IATA) said in June. Of the total, those in the Asia-Pacific region are expected to earn US$3.2 billion this year.

"There's been some improvement in demand both for cargo and passenger, but at the same time, there's still a lot of capacity," said Andrew Orchard, a Hong Kong-based analyst at (CIMB) Group Holdings. "In the second half, we will see more stability in demand and yields."

(CAT) is Asia's largest international carrier, having transported 21.4 million passengers in all of 2013, while its regional rival Singapore Airlines (SIA) transported 18.7 million. (SIA), which was ahead of (CAT), when it came to the distance flown by passengers, last month reported first-quarter profit dropped after yields declined.

(CAT) plans to increase passenger capacity by +8% this year, Chu said in March. (CAT) plans to start services to Zurich in March and to Manchester in December, after increasing flights to Los Angeles and Chicago earlier this year. "They've increased their capacity to North America quite dramatically, as they rebuild parts of the network that were cut in 2012," said Timothy Ross, a Singapore-based analyst at Credit Suisse Group AG. "That process required the launch of promotional fares to fill those seats."

Excluding hedging, (CAT)'s fuel costs rose +5.2% from a year earlier to HK$19.95 billion. (CAT) also had a fuel-hedging gain of HK$1.02 billion. High fuel prices are still affecting profitability.

(CAT) proposed to pay an interim dividend of 10 Hong Kong cents compared with 6 cents a year earlier.

Freight volumes increased +8.5% on robust demand on trans-Pacific routes from Asia. (CAT) plans to increase cargo capacity by +9% this year as it adds services to manufacturing hubs in inland China, Vietnam, and Mexico. (CAT) will also add freighter services to Calgary, Canada in October and start flying to Mexico City in March.

Cathay Pacific Airways (CAT) is continuing its North American market resurgence by adding destinations and frequencies to take advantage of strong demand. The latest addition is a 4x-weekly nonstop route from Hong Kong to Boston, set to launch in May 2015. (CAT) also increased capacity to its Los Angeles gateway in June and to Chicago earlier this month, as well as launching service to Newark in March. New Boeing 777-300ER deliveries have been aiding the growth in these markets.

North America is proving to be one of the major focuses in Cathay (CAT)’s growth strategy. In July, it increased capacity +22% in the market, with traffic increasing +20.5%. This rate of increase far outstripped the other regions, with (CAT)’s global capacity growth rate just +5.9%.

While the rapid capacity expansion in North America has caused its yield and load factors to slip slightly in the market, loads remain higher than in (CAT)’s other regions. (CAT) also said its revenue rise has remained “in line” with capacity. (CAT) described its USA routes as “very strong” in the first half of 2014, although it admits Canadian yields have been under pressure.

The North American expansion has coincided with a rebound in profitability for Cathay (CAT). (CAT) increased its first-half net profit to +HK$347 million/+$44.8 million), compared to a net profit of +HK$24 million in the same period in 2013.

In 2012, (CAT) was forced to trim North American service as it cut costs and accelerated the retirement of some of its Boeing 747-400s. (CAT)’s North American capacity was down about -15% year-over-year midway through 2013. However, when its premium traffic demand began to rebound, the North American market led the way. By the end of 2013, Cathay (CAT) had resumed all its previously cut services.

When (CEO), Ivan Chu took the reins last year, he said (CAT) was bullish on North America and would be adding both frequencies and destinations. He also said the arrival of its Airbus A350s in 2016 will open up the possibility of thinner routes into North American secondary markets.

With the addition of Boston, (CAT) will serve six markets in the USA and two in Canada. (CAT) will also have 14 freighter markets in North America after it adds Calgary in October.

(CAT), which is phasing out less fuel-efficient Boeing 747-400s, retired two jets from its fleet in the first six months of this year, and another four will leave in the second half. (CAT) had a total of 142 planes on its fleet at the end of December. (CAT) will retire 11 Airbus Group A340-300s by 2017, of which four will be retired by the end of next year.

(CAT) became the first Asian buyer of Boeing's new 777X jet for US$7.5 billion in December. It ordered 21 of the larger 777X-9 version to fly to North America and Europe, when they are delivered from 2021 to 2024.

(CAT) said this month, it invested in Fulcrum BioEnergy Inc to help achieve its target of carbon-neutral growth from 2020. (CAT) also agreed to buy 375 million gallons of fuel, or 2% of its current fuel consumption, from the USA biofuel developer over a 10-year period.

(CAT) adds three weekly flights on Chicago - Hong Kong Boeing 777-300ER service August 2 for a total of 10x-weekly.

INCDT: A Cathay Pacific Airbus A330-343X (TRENT 772B-60) 850, /07 B-LAE), performing flight CX-601 from Hong Kong (China) to Male (Maldives), landed on Male's runway 36 but suffered a hydraulic leak disabling the airplane on the runway and spilling hydraulic fluid onto the runway. The airport was closed for about one hour until the airplane was towed off the runway and the runway had been cleaned. Three flights scheduled to arrive during that time needed to divert.
The A330 was able to depart Male about 32 hours after landing.

Cathay Pacific Airways (CAT) has made a strategic equity investment in California-based sustainable biofuel developer Fulcrum BioEnergy, as part of (CAT)’s biofuel strategy and to help it achieve a target of carbon-neutral growth from 2020. Fulcrum converts municipal solid waste into sustainable aviation fuel or biojet fuel. (CAT) is Fulcrum’s first airline investor and has an option for further investment.

(CAT) has also negotiated a long-term supply agreement with Fulcrum for an initial 375 million US gallons of sustainable aviation fuel over 10 years (representing approximately 2% of (CAT)’s current annual fuel consumption) that meets (CAT)’s technical requirements and specifications. Fulcrum plans to commence construction of its first commercial plant later this year and build large scale, waste-to-renewable jet fuel plants at multiple locations, including locations strategic to the Cathay Pacific (CAT) network, primarily in North America.

(CAT) Biofuel Manager, Jeff Ovens said: “Fulcrum has successfully demonstrated a process of converting municipal solid waste feedstock into sustainable aviation fuel at its scale demonstration facility. The feedstock will be pre-sorted to remove any recyclables prior to being processed into fuels. The company has proved that its technology is viable and has supply commitments in place for feedstock needed for the fuel production. These supply commitments will cover both near-term and future developments.”

Fulcrum President & (CEO), Jim Macias said its biojet fuel would be “a new fuel that has the exact same molecules as fossil fuel but is cleaner, lower in carbon, renewable and lower cost than traditional fossil fuels.”

He said jet fuel produced by Fulcrum’s waste-to-fuels process would reduce lifecycle carbon emissions, when used in airplane or road transport by more than >80% when compared to traditional fuels derived from crude oil and other fossil sources. The process also reduces the amount of municipal solid waste and methane gas emissions going into landfill sites.

(CAT) will remove some of the premium economy (PY) seats on its A330 airplanes flying between Hong Kong and Australia and replace them with more economy (Y) class seating in a move it believes will better suit market demand.

The reconfiguration of 13 A330s will remove seven of the 28PY premium economy seats and replace them with +16Y additional economy (Y) class seats for a total increase of nine (Y) seats per airplane. "The decision to deploy the reconfigured airplanes to and from Australia is mainly due to high demand for economy (Y) class seats on these routes," a (CAT) spokeswoman said. "We believe the configuration change will better suit the current demand in the Australian market."

The move will have the effect of adding capacity on routes between Hong Kong and Australia, which is limited by a bilateral cap. (CAT) is unable to add extra flights between its Hong Kong hub and Sydney, Melbourne, Brisbane and Perth, because it has already reached its maximum allowed level of 70 flights per week.

Qantas (QAN) has this year cut capacity to Hong Kong by switching to smaller airplanes and Virgin Atlantic (VAA) has abandoned the Sydney - Hong Kong route.

From December, (CAT) also plans to switch one of its four flights to and from Sydney a day to a larger 777-300ER from the current A330. The change will occur three times a week at the start, rising to daily from February. The 777-300ER has 340 seats, which compares with 251 on the A330 after the reconfiguration process is completed.

(CAPA) Center for Aviation said the changes to the A330 would help offset a reduction in capacity which Cathay (CAT) had experienced in the Australian market starting in 2012, when it added new business (C) class seats and the premium economy (PY) cabin.

Bureau of Infrastructure, Transport & Regional Economics figures show Cathay (CAT)'s seat capacity fell by -6% in 2013 compared with 2011, even though its frequencies increased during that period.

(CAT) had previously said the introduction of the premium economy (PY) had helped to improve its yields, or returns on fares, on its Australian routes and was its fastest growing cabin for revenue growth. (CAT)'s customers can fly on premium economy (PY) all the way to several European destinations in addition to Hong Kong.

Rival Qantas Airways (QAN) offers premium economy (PY) on its flights between Sydney and Hong Kong but not on the Melbourne - Hong Kong and Brisbane - Hong Kong routes.

(QAN) is reconfiguring its A330 airplanes to introduce new fully-flat business (C) suites starting in December. However, it has decided not to add premium economy (PY) to its A330s as part of that process.

Kylie Morris, Qantas (QAN)'s Head of Creative Development & Customer Experience, has said passengers tend to appreciate premium economy (PY) on very long sectors such as flights from Australia to London and Los Angeles. She said on shorter sectors, customers had shown they were either willing to trade up to business class (C) or remain in economy (Y).

(HAECO) Cabin Solutions, a subsidiary of (HAECO), has received Parts Manufacturer Approval from the (FAA), authorizing the facility to produce and sell approved (PMA) parts directly to airplane operators and airplane parts distributors.

Cathay Pacific (CAT) will phase out its fleet of 747-400Fs and A340-300s between 2016 and 2017 as it pushes ahead with its fleet renewal plan. (CAT) said that it intends to sell six of its 747-400Fs back to Boeing (TBC) with four of them now parked. Four 747-400s are also to be retired with two of them having been withdrawn this month.

Concerning its fleet of eleven A340s, used primarily on flights to Europe, South East Asia, and Russia, (CAT) said a decision had been taken in the first half of this year to accelerate the type's retirement. "Four of these airplanes will be retired by the end of 2015 and the remaining seven will be retired by the end of 2017."

(CAT)'s A340 and 777-200 fleet will be replaced by (CAT)'s order for twenty-five A350-900s, due to begin arriving from February 2016.

Overall, management says it has 90 airplanes on order for delivery by 2024, including three 747-8Fs, twenty-one 777-9Xs, twenty-six A350-1000s, twenty-two A350-900s, eleven 777-300ERs, and eleven A330-300s.

(CAT) currently operates 149 airplanes, and serves 32 countries, with 71 destinations, 154 routes and 279 daily flights.

2 777-367ERs (41758, B-KQP; 41762, B-KQQ), deliveries.

SEE VIDEO OF (CAT) 777-300ER FIRST SUITE HONG KONG TO SEOUL - -

September 2014: Cathay Pacific (CAT) plans to launch non-stop weekly flights to Sri Lanka's capital city, Colombo. The direct flights will replace (CAT)'s current service via Singapore. From October, (CAT) will become the only airline to operate direct services between the two destinations.

A biofuel producer that will provide jet fuel to Cathay Pacific Airways (CAT) is one of three companies to receive funding from the USA government as it moves to kick-start large-scale production of drop-in biofuel alternatives for jet and ship fuel for military and commercial customers.

The USA Agriculture, Energy & Navy Departments have jointly awarded grants totaling $210 million toward the construction and commissioning of biorefineries to Emerald Biofuels, Fulcrum BioEnergy and Red Rock Biofuels.

In August, (CAT) became the first airline investor in Fulcrum, and signed a long-term agreement to buy 375 million gallon of jet fuel over 10 years. Fulcrum plans to build additional facilities close to airports served by (CAT), primarily in North America. Fulcrum also received a $105 million loan guarantee from the Agriculture Department earlier this month, to cover some of the $266 million cost of building its first plant to convert municipal solid waste to synthetic fuel using the Fischer-Tropsch process.

The plant, near McCarran Airport in Nevada will convert almost 150,000 tons of waste into more than >10 million gallons of liquid fuels a year. The facility is planned to become operational next year.

(CAT)’s equity and offtake deal is similar to that between British Airways (BAB) and Solena Fuels, under which a waste-to-jet-fuel plant is being built close to London. In each case, the Fischer-Tropsch biorefinery will supply about 2% of the airline’s annual jet-fuel requirements.

Emerald Biofuels, meanwhile, plans to build an 82 million gallon per year biorefinery on the USA Gulf Coast, converting waste fats to liquid fuels using Honeywell (SGC) company (UOP)’s Ecofining process. This produces (HEFA) bio-jet fuel, which is approved for use in airplanes.

Red Rock Biofuels plans to build a 12 million gallon per year refinery in Lakeview, Oregon, using the Fisher-Tropsch process to covert woody biomass, or the residues from forest management, into synthetic fuels.

Together the three projects are expected to produce more than >100 million gallons of fuels beginning in 2016 - 2017, “at a price competitive with their petroleum counterparts,” according to the Energy Department.

October 2014: SEE NEW LOGO - - "CAT-2014-10 - NEW LOGO."

November 2014: News Item A-1: Cathay Pacific Airways (CAT)'s flights may be disrupted over the peak Christmas travel season after a "big" majority of its unionized pilots (FC) voted to press ahead with a work-to-rule campaign if pay talks fail.

"The company has been open and positive; we remain hopeful of a better pay offer," Hong Kong Aircrew Officers Association, General Secretary, Chris Beebe said. The vote means "union leaders may now implement contract compliance at any time of their choice."

Contract compliance is a form of industrial action in which workers put only as much effort as is stipulated in their employment contracts. Such action, also known as "work to rule," may disrupt operations over the busy year-end period.

The union is in "early talks" with (CAT), Beebe said. Members last month voted to reject an offer from (CAT) of a 10% pay increase over three years. (CAT) is Asia's biggest international airline by passengers carried.

Beebe declined to give details about the work-to-rule authorization. The "South China Morning Post" reported earlier, citing documents from the union, that the result of the online vote was released on November 8th and action must commence within 42 calendar days.

"We will do our best to make sure that we continue to operate our flight services as scheduled," (CAT) said, adding that (CAT) is "disappointed" about the vote.

News Item A-2: The Airport Authority Hong Kong (AA) has been granted an environmental permit (EP) for the proposed expansion of Hong Kong International Airport into a three-runway system.

The (AA) said it welcomed the decision of the Director of Environmental Protection to approve the Environmental Impact Assessment (EIA) report and issue the (EP).

(AA) (CEO), Fred Lam said: “It marks a major step in Hong Kong’s pursuit of strengthening its long-term competitiveness and leading aviation hub status.”

He said the (AA) was committed “to carrying out all the mitigation measures proposed in the (EIA) report, and fully complying with all the conditions listed by the Environmental Protection Department. Our aim is to achieve a balance between economic development and conservation.”

Lam said the (AA) would now “kick-start” its proposal for developing a 2,400-hectare marine park committed to in the (EIA) report. He said the (AA) would also “formulate and finance a detailed Marine Ecology Conservation Plan with support from relevant experts and stakeholder groups. This plan will outline our approach for the conservation of marine life, particularly the Chinese White Dolphins (CWDs) within Hong Kong and Pearl River Estuary waters.”

This will include the implementation of new routes for high-speed ferries operating into and out of the airport, to minimize disturbance in western waters. Lam said some of these precautionary measures “will be implemented even before we begin construction on the third runway.”

(HKIA) is already operating close to its maximum capacity, and expanding it to a three-runway system will allow Hong Kong to meet long-term air traffic demand, while at the same time, generating local employment and facilitating economic development.

With the scheme design for the third runway project now substantially completed, the (AA) is currently reviewing the cost estimate and associated funding arrangements and will submit to the government its recommendation for how to take the project forward.

“We target to obtain all the necessary approvals to expand the airport, with the aim of having the three runway system fully operational in 2023,” Lam said.

News Item A-3: Hong Kong Aircraft Engineering Company (HAECO) has selected Mxi Technologies’ Maintenix Maintenance Repair & Overhaul (MRO) Edition as its core software for managing maintenance in Hong Kong.

December 2014: Cathay Pacific Airways (CAT) pilots (FC) have implemented “work-to-rule” industrial action after long-running contract talks with (CAT) failed to produce an agreement, and it remains uncertain, when the two parties will return to the negotiating table.

The Hong Kong Aircrew Officers Association (HKAOA) instructed members to “perform their assigned duties in strict conformance with their existing conditions of service” beginning December 4. This means the pilots (FC) would refuse some practices that airlines typically rely upon for operational flexibility. Such a move will likely cause (CAT) headaches over the upcoming peak-travel season.

Pilots (FC) had previously voted to authorize the (HKAOA) to take this step if necessary. “It is unfortunate that a year of negotiations has brought us to this point,” union General Secretary, Chris Beebe said. The (HKAOA) “looks forward to resuming talks with management” regarding the contract, Beebe said.

Describing the industrial-action decision as “uncalled for, unnecessary and unproductive,” (CAT) said it “has little choice but to place discussions with the (HKAOA) on hold.”

However, (CAT) said it hoped to reconvene talks in 2015, and is “always open to further dialogue with the (HKAOA) if the union shows sincerity to engage in meaningful discussions.”

(CAT) said it will “do our best to make sure that we continue to operate our flight services as scheduled” during the work-to-rule campaign.

Negotiations for a new three-year contract began in January. (CAT) said it thought it had a deal in August, but when the offer was put to pilots (FC) for a vote with union recommendation, it was rejected by a narrow margin.

While the two sides could not agree on a long-term pay deal, (CAT) last month offered a +4% pay increase covering the period through April 30, 2015. (CAT) had hoped this increase “would allow both parties to close 2014 on a positive note, with the aim to recommence pay and other discussions early next year.”

The (HKAOA) represents more than >2,000 (CAT) pilots (FC) based in Hong Kong, the USA and New Zealand.

Separately, Cathay (CAT) said it reached a deal with flight attendant (CA) and ground staff unions for a pay increase covering 2015. More than >90% of Hong Kong-based flight attendants (CA) and ground crew will receive a raise averaging +4.5%, while senior staff will see a raise of +3.9% to +4.4%. In addition, all eligible Hong Kong-based employees will receive a 2014 year-end bonus on one month’s salary.

January 2015: Higher leisure traffic offset falling premium demand for Cathay Pacific Airways (CAT) in the peak month of December, while the cargo operation continued its upward trajectory.

The Oneworld (ONW) Alliance carrier reported that passenger traffic was “slightly below expectations” in the first half of December, but (CAT) saw a “very strong” Christmas and New Year period and broke daily volume records.

Demand was high on leisure routes from Hong Kong to North Asia and Southeast Asia, and the Australia/New Zealand market was also strong. However, a fall-off in premium demand put pressure on yields.

Combined passenger traffic on (CAT) and its Dragonair (DRG) subsidiary was up +7.5% on a +5.9% capacity gain in December, resulting in load factor rising +1.1 points to 83.5% LF.

On the cargo side, demand “remained robust” until the beginning of the Christmas holidays, then fell off as expected. The cargo market began to pick up again in the second week of January, (CAT) said.

February 2015: News Item A-1: Cathay Pacific Airways (CAT) released combined Cathay Pacific (CAT) and Dragonair (DRG) traffic figures for the first month of 2015 that show an increase in both the number of passengers carried and the cargo and mail tonnage uplifted compared to the same month in 2014.

(CAT) and (DRG) carried a total of 2,612,964 passengers in January (an increase of +2.7% compared to the same month last year). The passenger load factor shrank by -0.7 percentage points to 82.7% LF, while capacity, measured in available seat kilometres (ASKs), increased by +7.3%.

The two airlines carried 147,275 tonnes of cargo and mail last month, an increase of +12.5% compared to the previous January. The cargo and mail load factor rose by +2.9% points to 63.4% LF. Capacity, measured in available cargo/mail tonne kms, rose by +8.9% while cargo and mail revenue tonne kms (RTKs) flown were up by +14.1%.

(CAT) General Manager Revenue Management, Patricia Hwang said: "The month began well, with strong returning traffic from the Christmas and New Year holidays. However, the dip in demand between New Year and Chinese New Year was steeper than anticipated and the increase in passenger numbers failed to keep pace with the increase in capacity. Passenger yield was impacted by the weakness in certain currencies, including the euro, yen and the Canadian and Australian dollars, as well as a shift in Chinese New Year, which distorted year-on-year comparisons."

(CAT) General Manager Cargo Sales & Marketing, Mark Sutch said: "Demand fell away, as expected, after the very busy end to 2014, but the markets remained relatively buoyant, particularly on the North American lanes. Traffic out of the key Hong Kong and Mainland China markets was much stronger than in the same month last year. We saw a pick-up in demand as January progressed, and by the end of the month we were operating close to a full freighter schedule. We expect to see something of a mini-rush before the Chinese New Year holidays begin."

News Item A-2: Cathay Pacific Airways (CAT) introduced a new mobile cargo tracking application. The new app allows customers of Cathay Pacific Cargo (CAT) to track shipments through their Smartphone or tablet from anywhere. Functions include tracking of multiple air waybills, saving waybills, checking flight schedules, shipment loadability, Cathay Pacific (CAT) office locations and Cathay Pacific Cargo news. Cathay Pacific Cargo recently added Calgary and Phnom Penh to its 97-city network.

News Item A-3: Cathay Pacific Airways (CAT) and KfW IPEX-Bank have closed financing of a new Airbus A330-300. The transaction follows the commercial financing of two A330-300 airplanes, which took place in 2014.

News Item A-4: (CAT) has applied its newest corporate image to its Boeing 747-467ERF (1404-37299, B-LIA), the first of its Cargo division
to get the new livery - see "CAT-747-467ERF -2016-02.jpg."

The color scheme is very similar to that of the passenger airplanes, with enlarged brushwings at the nose and the tail (now all-green, with a single gray band running along the fuselage).

March 2015: News Item A-1: Hong Kong flag carrier, the Cathay Pacific Group posted a full-year result of +HK$3.15 billion/+$406 million in net profits for 2014, up +20.2% year-over-year (YOY) over the Hong Kong-based company’s net take of +HK$2.6 billion in 2013.

Acknowledging a difficult first half of 2014 (in which the Group was affected by high fuel prices, lower passenger yield, ongoing weakness and overcapacity in its air cargo market) Cathay (CAT)’s business rebounded in the second half. The Group’s full-year cargo revenue was HK$25.4 billion, a +7.3% (YOY) increase from 2013.

“After a prolonged period of weakness, cargo demand started to improve in the summer of 2014 and was strong in the fourth quarter, [our] peak period for cargo,” Cathay Pacific Group Chairman, John Slosar said. “The sharp reduction in fuel prices in the fourth quarter caused a very welcome net benefit to overall profits. However, it resulted in losses on our hedging contracts [and] significant unrealized hedging losses.”

The Group’s consolidated full-year revenue was HK$105.99 billion, up +5.5% (YOY). Passenger revenue was HK$75.73 billion, up +5.4% (YOY). Consolidated operating expenses for the year were HK$101.56 billion, up +5% (YOY); the Group’s full-year operating profit came in at +HK$4.44 billion, up +18% (YOY).

Consolidated passenger yield for Cathay Pacific (CAT) and Dragonair (DRG) was down -1.8% (YOY) to 67.3 HK cents; cargo and mail yield was down -5.6% (YOY) to HK$2.19. Fuel expenses, net of hedging, were up +5.7% (YOY) to HK$40.3 billion.

Cathay Pacific (CAT) and Dragonair (DRG) carried 31.6 million passengers in 2014, up +5.5% (YOY). Traffic increased +15% (YOY) to 120.3 billion (RPK)s; overall capacity grew +5.9% (YOY) to 134.71 billion (ASK)s; the carriers’ combined passenger load factor came to 83.3% LF, up +1.1 point (YOY).

News Item A-2: Hong Kong flag carrier, Cathay Pacific Airways (CAT) saw significant growth in both passenger numbers and load factors in February, mainly attributed to a travel surge driven by an unusually late Chinese New Year travel period.

(CAT) saw more than >2.6 million passengers through February, up +12.4% year-over-year (YOY). This also boosted (CAT)’s cumulative passenger numbers for the first two months of the year (January - February 2015) by +7.4%.

“Passenger traffic in February was boosted by the Chinese New Year holiday, which fell in January in the previous year, noted (CAT)’s General Manager Revenue Management, Patricia Hwang.

(CAT)'s airplane load factor also grew; it was up to 84.9% LF from nearly 82% LF, possible partly due to slower growth in (ASK)s of +7.8% to +10.8 million.

Despite that, the overall (RPK) rating was also up +11.7% (YOY), although that would offset by significantly lower (RPK) growth figures (+6.3%) in the previous month (January).

Hwang said the best figures were reported by “key routes in North Asia (China) and Japan” and that traffic to Australia and New Zealand was “robust” during the reporting period.

(CAT) also saw an increase in cargo figures. Cathay (CAT) and its regional offshoot, Dragonair (DRG) registered almost 130,500 tonnes of cargo carried in February, an increase of +28.8% compared to 2014. This in turn pushed cargo load factors up to 65.5% LF (an increase of +6.2% (YOY)).

However, the predominance of home bound workers during the holiday period led to a “dip in demand in the premium cabins,” Hwang said.

News Item A-3: Cathay Pacific (CAT) will cease Moscow flights from June 1, due to decreasing number of passengers and growing operational costs of the route.

(CAT) plans to keep the office in Moscow to support the distribution in the country. Russia’s Oneworld (ONW) Alliance member (S7) Airlines (SBR) will become the main Cathay Pacific (CAT) partner in the region.

(CAT) launched 3x-weekly, Airbus A340-300 service to Moscow in July 2010.

Russia’s international traffic did not grow at the end of 2014 and was down -15.3% in January year-over-year. The decrease is due to the change of currency exchange rates, which are expected to continue falling this year.

Austrian’s FlyNiki (NKI) ceased its Vienna - Moscow flights at the beginning of the year. At the same time, German flag carrier Lufthansa (DLH) does not plan to significantly reduce the frequencies or capacity on Russian destinations.

News Item A-4: Although Cathay Pacific (CAT)’s cargo division has just one more freighter due for delivery—and is selling more of its older cargo aircraft—it still expects to be able to boost capacity significantly.

(CAT) will grow its overall cargo capacity by about +10% this year, with a similar increase in both its dedicated freighters and in the belly capacity of its passenger fleet, (CAT) Director Cargo, James Woodrow said. It can do this because of greater efficiency of its new Boeing 747-8Fs, as well as increased numbers of passenger airplanes such as the Boeing 777-300ER, which can carry large cargo volumes.

(CAT) has 13 747-867Fs, and will take delivery of its 14th next year. The 14th airplane will mark the last of its current order for the type, which has become the core of its cargo fleet. (CAT) also has six Boeing 747-400ERFs and five 747-400Fs, of which three are operational and two are parked.

Boeing agreed in 2014 to buy back the six 747-400Fs that (CAT) was operating at the time: One was returned last year, one will go in 2015, and Boeing (TBC) will take the remaining four in 2016. (CAT) will still finish the year with 22 operational freighters, as it will park the one airplane to be returned.

The freighter total has dropped significantly from Cathay (CAT)’s previously operated fleet size, which was in the “high twenties,” Woodrow said. But he noted that (CAT) has steadily increased the size of its freighters as well as frequencies in key markets such as transpacific routes to the USA.

Because the 747-8Fs are newer airplanes, Cathay (CAT) can rely on high utilization. (CAT) consistently achieves approximately 16 block-hours daily per airplane, much higher than its older 747F-freighter fleets. “We can keep pushing their utilization; these are expensive assets so we want to sweat them as much as we can,” Woodrow said. “And we can [also] try to work our (ERF)s a bit harder.”

Another potential option is retaining some of the 747-400Fs a bit longer. If Boeing (TBC) has not found lease customers by the time they are due to be returned, (CAT) could possibly continue to use them, Woodrow said. But any such decision would likely depend upon demand strength and fuel price at that time. For example, if oil climbs back to $100 per barrel in 2016, (CAT) would be unlikely to pursue this alternative.

Passenger-fleet growth is the most obvious source of new cargo capacity for (CAT). Whereas (CAT) has reduced the number of freighters serving Europe in recent years, it has much more belly capacity in that market, as the passenger fleet added destinations and frequencies.

It also helps that the 777-300ERs in the passenger fleet have excellent cargo capacity. (CAT) now operates five daily 777 flights to London, and if each carries 20 tons of cargo, that represents about the same capacity as a single daily freighter. Similarly, (CAT) operates so frequently to Singapore with its A330s, that it can carry 150 tons of cargo every day on that route as belly cargo, in addition to freighter services.

“You have to think of modern wide body [passenger] airplanes as mini-freighters,” Woodward said. For example, a 777-300ER with a light passenger load recently carried 36 tons of cargo on a single flight from Manchester.

(CAT) has no plans to order more freighters at the moment, Woodrow said. (CAT) “continually looks” at its fleet plan, although it will “see what the underlying strength of this [cargo] recovery is” before contemplating more orders.

Because it has new belly space becoming available, and the option to increase airplane utilization, (CAT) still has the opportunity to raise cargo capacity over the next few years, Woodrow said. “We’ll keep evaluating [the fleet], but we’re not in a rush to get our checkbook out at the moment.”

News Item A-5: Cathay Pacific (CAT) has appointed Manuela Elia as San Francisco airport Station Manager, a move from her former position as Cathay (CAT)’s airport station manager in Chicago. Elia will be responsible for liaising with local airport authorities and overseeing the ground operations at San Francisco International Airport.

News Item A-6: A recent 777-300ER delivery to Cathay Pacific Airways (CAT) marks a major milestone between (GE) Aviation (GEC) and Boeing Commercial Airplanes (BCA). The airplane is powered by the 2000th (GE90) engine to Boeing for the 777.

"The (GE90) engine along with the Boeing 777 airplane helped revolutionize the twin-engine airplane concept in commercial aviation," said Bill Millhaem, General Manager of the (GE90)/(GE9X) Program at (GE) Aviation (GEC). "Prior to its introduction, twin-engine airplanes were not viewed as a viable option for long-haul travel. Yet the proven performance and reliability of the (GE90)-powered Boeing 777 airplane altered this mindset and made the engine-airplane combination among the most successful long-range, wide body offering in service today."

Close to 70 operators utilize (GE90)-powered Boeing 777 airplanes, with the 2000th engine powering a Boeing 777-300ER. More than >500 (GE90) engines are on the order book, which continues to increase. "The customers love the airplane. It's a moneymaker for them. Which is the most important thing (that our customers make money and they like the airplane)" said Jim Petersen, Senior Chief Engineer of Propulsion for Boeing Commercial Airplanes (BCA).

The (GE90) engine family powers the Boeing all 777 models and is the exclusive powerplant on the 777-300ER, 777-200LR, and 777F Freighter airplanes. Of the 2000 (GE90) engines delivered to date, more than >400 were the earlier (GE90-94B) model and almost 1600 were the (GE90-115B) engine, which is the world's most powerful jet engine. The family has accumulated more than >45 million flight hours and 7 million cycles since entering service in 1995.

The (GE90) engine features several technology firsts, including carbon fiber composite front fan blades, the world's largest front fan at 128 inches in diameter and the world-record setting thrust of 127,900 pounds during certification testing. The popular (GE90-115B) engine includes such performance-enhancing features as three-dimensional aerodynamic (3-D aero) compressor and wide-chord, swept composite fan blades for greater efficiency. The dual annular combustor emits no more than 40% of the hydrocarbons allowed by today's international standards. In addition, today's (GE90-115B) engines have been enhanced to reduce fuel burn by -3.6% from the 2000 launch specifications.

The (GE90) engine provides the foundation for the new (GE9X) engine that will power the Boeing 777X. The (GE9X) engine will be in the 100,000 pound thrust class and features a 134-inch diameter composite fan case and 16 composite fan blades; a next-generation 27:1 pressure-ratio 11-stage high-pressure compressor; a third-generation (TAPS) III combustor for high efficiency and low emissions; and (CMC) material in the combustor and turbine. Almost 700 (GE9X) engines have been ordered by customers since it was launched last year. Technology maturation testing on key components for the (GE9X) will continue this year with the first engine scheduled to test in 2016.

News Item A-7: See attached "CAT-2015-04 - TOP 25 WORLD TRAFFIC.jpg"
and "CAT-2015-04 - TOP REGIONAL TRAFFIC.jpg."

May 2015: News Item A-1: Cathay Pacific Airways (CAT) has reached a tentative contract deal with its pilot (FC) group that appears likely to end the pilots (FC)’s five-month work-to-rule campaign.

(CAT) said talks will continue with its flight attendants union, which is threatening to escalate industrial action over certain contract issues it wants addressed.

News Item A-2: Hong Kong International Airport (HKIA) reported handling 5.8 million passengers in April, a +8.8% increase year-over-year. Total airplane movements were also up +3.1% to 33,725 for the month, adding to the squeeze on infrastructure.

Passenger volume grew +8.8% overall for first quarter (Q1) 2015, with 22.2 million passengers; cargo volume grew +1.9% over the quarter to 1.4 million tons.

Airport management attributed the record figures to “significant increases” in traffic from Southeast Asia and North Asia, such as AirAsia Zest (RIT)’s 4x-weekly schedule from Manila. Hong Kong resident traffic grew +12% and transfer/transit traffic grew +13%.

The airport said the increase was also partly due to streamlined check-in procedures, including upstream check-in services to Jiuzhou Port in Zhuhai, which “enhances multi-modal connectivity throughout the Pearl River Delta (PRD),” (HKIA) General Manager Market & Connectivity Development, Henry Ma said.

Passengers can now check in baggage and obtain boarding passes for departing flights at seven ferry ports, including Macao, Shenzhen, and Zhuhai Jiuzhou.

News Item A-3: Boeing (TBC) and Cathay Pacific Airways (CAT) celebrated the delivery of (CAT)'s 50th 777-300ER (Extended Range). With this delivery, (CAT) will have 67 777s in operation, which also includes 12 777-300s and five 777-200s. Cathay Pacific (CAT) is slated to receive three more 777-300ERs this year and is one of the launch customers for the 777X with 21 777-9X airplanes on order.

"The 777-300ER forms the backbone of our long-haul fleet," said Ivan Chu, (CEO) (CAT). "We operate the largest 777-300ER fleet in Asia, and this super-efficient long haul airplane allows us to operate multiple daily frequencies to intercontinental markets, which gives our customers a lot of choices."

(CAT) was voted the world's best airline of the year in 2014, for the fourth time, in the airline industry's most comprehensive customer satisfaction surveys conducted by SkyTrax. It bases all awards on a survey of over 18 million airline passengers hailing from over >160 countries. "We truly value the confidence (CAT) have demonstrated in the 777 program as well as Boeing (TBC)'s products and services across the board," said Ihssane Mounir, Senior VP Sales for Northeast Asia, Boeing Commercial Airplanes (BCA). "We are honored that the 777-300ER continues to play a prominent role in the success of Cathay Pacific (CAT)'s business expansion and we look forward to expanding our partnership with the new 777X in the years to come."

The 777-300ER is the most fuel and cost-efficient airplane in its class as well as the most reliable twin-aisle airplane in the world. It also has the highest cargo capability of any passenger airplane. The 777-300ER will receive further improvements in 2016 designed to reduce fuel use by -2%.

The 777-300ER has consistently won many accolades including "Best Airplane Type" based on passenger preference polls, "Best in Class" based on fuel burn, passenger load cost and performance and "Best Residual Value for a Twin Aisle Airplane" among others.

The Cathay Pacific group operates flights to nearly 100 destinations worldwide with its own fleet of more than >200 airplanes. In North America, the airline currently operates some 100 passenger flights a week to New York (JFK), Newark Liberty, Los Angeles, San Francisco, Chicago, Toronto, and Vancouver. (CAT) will begin a four-times-weekly service to and from Boston and Hong Kong on May 2 this year. Cathay Pacific Cargo serves 13 cities across the Americas using the latest 747-8F freighter fleet.

777-367 (41764, B-KQX) delivery.

June 2015: News Item A-1: China’s Airlines Reroute Flights, Refund Tickets to South Korea after Middle East Respiratory Syndrome (MERS), Alert" by (ATW) Jeremy Torr, June 10, 2015.

Following a Middle East Respiratory Syndrome (MERS) Red Alert warning by the Hong Kong government, warning travelers against flying to Korea, Cathay Pacific Airways (CAT) and its subsidiary, Dragonair (DRG) have committed to refunds or re-routing for all existing tickets to Seoul, Busan and Jeju up to the end of August.

In addition, Taiwan-based China Airlines (CHI), (EVA) Air, TransAsia Airways (FSH), and Mandarin Airways (MDN) are also offering full-refund cancellations in the immediate term for Korean flights.

Korea has reported 95 cases of (MERS), with seven deaths in the country. As a result, the Hong Kong Security Bureau issued an Outbound Travel Alert (OTA), advising passengers to avoid “all non-essential travel” to the country.

In addition, Taiwan and Macau have both advised against unnecessary travel to any destination in South Korea, and are mandating that passengers wear facemasks disembarking from Korea-originating flights.

Since the virus was discovered in 2012 in Saudi Arabia, the (MERS) outbreak has killed more than >300 people in more than >20 countries. First identified in Saudi Arabia where it claimed the lives of more than >100, (MERS) is suspected of being spread by respiratory and direct contact vectors.

Cathay Pacific (CAT) and (DRG) say they are “monitoring the situation closely” and have provided extra facemasks, hand sanitizers and gloves for use on any airplanes traveling to Korea. Both carriers are looking at extra sanitation procedures in addition to routine cleaning on airplanes flying to potential infection areas.

Authorities in South Korea temporarily closed two hospitals amid persistent fears about the Middle East Respiratory Syndrome (MERS) outbreak, which had killed 14 people through June 13th. Twelve new infections also were reported, the Health Ministry said. Nearly 140 people in the nation have been diagnosed with (MERS) since the country reported its first case last month.

News Item A-2: Cathay Pacific (CAT) Names New Leader for Rebounding Cargo Unit BY (ATW) Adrian Schofield, June 12, 2015.

(CAT) is changing the leadership of its Cargo operation, as (CAT) continues to benefit from improving performance in this major sector of its business.

Cargo Director, James Woodrow is leaving (CAT) to head China Navigation Company, which is also in the Swire Group. Woodrow has been Director since September 2013, although he held other leadership roles with the cargo unit for four years before that. He has overseen (CAT)’s rebound from the global cargo slump, as well as the modernization of (CAT)’s large freighter fleet.

Fellow Swire Group veteran, Simon Large will take over as Cathay (CAT)’s Director of Cargo. He has previously held senior management positions at (CAT), most recently General Manager Marketing & Loyalty Programs.

(CAT) saw a slight dip in cargo load factor in May, compared to the same month in 2014. However, the long-term trend is still positive. Cargo traffic in May was affected by a holiday period in mainland China at the beginning of the month, but demand “picked up steadily” as factories reopened.

Increased competition in Chinese markets was also a factor, and the USA West Coast seaport congestion that had previously boosted air freight was less of a benefit in May. Demand in the India market was a strong point.

Cathay (CAT)’s cargo traffic was up +9.5% year-on-year in May, although it did not keep pace with the +11.1% capacity rise. For the year through the end of May, however, cargo traffic was up +12.2% on a +9.6% capacity increase.

Passenger demand fared better in May, with load factor rising by +2.9 points to 85.9% LF and capacity rising +7.5%. The Chinese May holiday period helped boost demand, although yield was dampened by a higher proportion of connecting traffic and lower long-haul premium traffic.

In addition to Woodrow’s move, (CAT) has also named Paul Loo as Director Corporate Development, overseeing network and strategic decisions. Loo replaces James Barrington, who will become Group Director Airframe Services at Hong Kong Aircraft Engineering Company Ltd (HAECO).

News Item A-3: "Hong Kong Denies Jetstar (IMU) Application" by (ATW)
Karen Walker, June 25 2015.

Hong Kong regulatory authorities have denied the Qantas Group its application to start a low-cost carrier (LCC) in Hong Kong. The application was fought long and hard by Cathay Pacific Airways (CAT) and Hong Kong Airlines (CRY).

A public inquiry was held in Hong Kong after Qantas (QAN) sought to launch Jetstar (IMU) there in partnership with China Eastern Airlines (CEA) and Hong Kong’s Shun Tak Holdings. Opponents to the plan said the airline did not comply with Hong Kong law, which requires airlines to have their principal place of business in Hong Kong.

In its ruling, the Hong Kong Air Transport Licensing Authority (ATLA) essentially agreed with theo bjectors’ view, saying that submissions and evidence presented showed that ultimate control of the airline would be in Australia and mainland China.

According to the "Sydney Morning Herald," the (ATLA) issued a statement saying, “The Authority decided that Jetstar (IMU) did not comply with Article 134(2) of the Basic Law in having its principal place of business in Hong Kong and that Jetstar Hong Kong (IMU)’s application be refused.”

(CAT) was determined to fight the establishment (IMU), saying (IMU)’s application for a license to operate out of Hong Kong would be a violation of local law.

In November 2013, (CAT) (CEO), Ivan Chu said, “We don’t believe that (IMU) will meet this legal requirement and it’s a very clear legal rule. Hong Kong is bound by the constitution to ensure that all new entrants meet the criteria of having management control based in Hong Kong. So if they are claiming that they are, then they need to go for the test. But our view is that they have a headquarters in Melbourne and that Jetstar (IMU) is 100% owned by Qantas (QAN).”

It is not clear if (QAN) can or will appeal the ruling.

News Item A-4: Cathay Pacific (CAT) (CEO), Ivan Chu will serve as Oneworld (ONW) Alliance governing board Chairman for the year ahead, succeeding (IAG) (CEO), Willie Walsh.

Ivan Chu said he looks forward to “working with other board members to drive continuous developments of the Oneworld (ONW) Alliance. We will never rest on our laurels. We will keep working to provide a seamless travel experience for the millions of customers who fly with (ONW) every year.”

(ONW) (CEO), Bruce Ashby said: “We thank Willie Walsh for his leadership of (ONW) as the alliance completed its biggest yet membership expansion and welcome Ivan Chu as his successor, as we move ahead on the next phase of our journey to establish (ONW) firmly as the first choice alliance for frequent international travelers the world over.”

Chu was appointed Cathay Pacific (CAT) (CEO) in March 2014 after serving as (COO) for three years. He is also Chairman of Hong Kong Dragon Airlines (DRG) Limited (which is an affiliate member of (ONW)) and a director of John Swire & Sons (HK) Limited and of Swire Pacific Limited.

He joined the Swire group, which is (CAT)'s main shareholder, in 1984 and worked with the group in Hong Kong, Mainland China, Taiwan, Thailand, and Australia.

July 2015: News Item A-1: "Typhoons Whip Up Hong Kong Travel Chaos As More Than >1,500 Flights Affected" By Danny Lee, "South China Morning Post" July 10, 2015.

Travelers flying in and out of Hong Kong are yet to escape the mercy of the weather despite the low impact of Typhoon Linfa as another tropical storm churned across the region today (July 10).

Super Typhoon Chan-hom whipped up 155km/hr winds as it barrelled across eastern China towards Wenzhou, affecting dozens of flights and causing cancellations between Hong Kong and major destinations Shanghai, Taipei, and Beijing.

According to the Airport Authority, more than >1,500 flights have been affected, including 50 scheduled departures and arrivals that were axed July 10.

"Affected by typhoons, the Airport Authority continued flight rescheduling control, from 6 am to midnight [on July 10], involving 1,020 flights to and from Hong Kong," an Airport Authority spokesman said.

However, while airlines and the airport braced for significant Typhoon Linfa disruption, the impact was barely felt. Some 520 flights to and from Chek Lap Kok were rescheduled in anticipation, but the storm passed over Hong Kong with a whimper, leaving the city unscathed.

Facing a storm of questions, the Hong Kong Observatory defended its handling of the typhoon, insisting its decision to hoist the typhoon No 8 signal (which triggers a partial city shutdown) was based on meteorological data and consideration for public safety.

Cathay Pacific (CAT) said on July 10 that flights CX463, CX465, CX5487 and CX405 from Taipei and CX5433 from Kaohsiung were cancelled.

Dragonair (DRG) said the following flights were cancelled: KA486, KA5494, KA5450 and KA5466 from Hong Kong to Taipei; KA5465, KA487, KA5495, KA5463 and KA5405 from Taipei.

Also cancelled were KA5390 and KA908 to Beijing; KA5347, KA5391 and KA909 from Beijing; KA432 to Kaohsiung and KA433 from Kaohsiung; KA626 to Hangzhou and KA627 from Hangzhou; plus KA804 to Shanghai and KA805 from Shanghai.

Meanwhile, KA378 to Okinawa and KA379 from Okinawa were delayed.

Hong Kong Airlines (CRY) said it proactively canceled a handful of flights to and from Shanghai, Bangkok, Hangzhou, and Fuzhou, including: HX236 to Shanghai, HX237 from Shanghai; HX774 and HX762 from Bangkok; HX129 from Hangzhou; and HX174 from Fuzhou.

Direct ferry services linking Hong Kong airport with Macau, Shenzhen and Guangzhou had resumed operations, according to an airport spokesman.

News Item A-2: Cargo volume at Cathay Pacific Airways (CAT) remained flat last month as the global market continues a worrying downward trend.

Combined traffic figures for (CAT) and its subsidiary Dragonair (DRG) showed a -2.2% LF year-on-year drop in cargo load factors for the month, as cargo volume grew +0.5%, while capacity increased +5.9%.

"Growth in the cargo markets has been softening . . . and we saw a continuation of this trend in June," said Mark Sutch, (CAT)'s General Manager for Cargo Sales & Marketing.

The International Air Transport Association (IATA) said on July 1 air cargo growth had "undoubtedly come off the boil" due to a weak global economy.

Carriers in the Asia-Pacific experienced slow growth as a result of poor import-export performance, with trade volumes for emerging markets in Asia down -10% at the end of the first quarter, compared with the fourth quarter of last year, (IATA) said.

Sutch said (CAT) had "sporadic" demand and "strong competition" in mainland China, the largest source market.

On the passenger side, (CAT) recorded a +7.6% year-on-year (YOY) increase in traffic last month, but said the Middle East respiratory syndrome (MERS) outbreak had resulted in a "sharp fall" in bookings for South Korea.

"We saw a sharp fall-off in bookings for Korea after the Hong Kong government raised the red outbound travel alert in response to the (MERS) outbreak," General Manager of Revenue Management, Patricia Hwang said. Hwang said growth in passenger numbers outpaced that of capacity last month, with high load factors across the network.
"Premium demand remained behind target on a number of key long-haul routes, although we saw growth within the region," she said.

News Item A-3: INCDT: A Cathay Pacific Airways (CAT) Boeing 777-300ER made an emergency landing at a USA military airport in Alaska due to smoke in the airplane.

(CAT) said that flight CX884, en route from Hong Kong to Los Angeles July 29, diverted to Eareckson Air Station on Alaska’s Aleutian Islands "due to smoke detected in the airplane."

The 777 was carrying 276 passengers and 18 crew ((FC) - (CA)). "All passengers and crew are safe," (CAT) said. American Airlines (AAL) and (LAN) code shared on the flight.

(CAT) said it is sending a relief flight to Eareckson Air Station. (CAT) Director Service Delivery, James Ginns said, "The captain of CX884 made exactly the right decision to divert the flight as a precautionary measure. We understand that this action resulted in a long and arduous journey for those onboard the diverted flight and we apologize for the inconvenience caused. We will launch a thorough investigation into what caused the smoke that was detected on the airplane."

News Item A-4: "First A350 XWB for Cathay Pacific is Taking Shape" by WCARN.com, July 6, 2015.

Assembly of the first A350-900 for Cathay Pacific Airways (CAT) is progressing well at Airbus' A350 XWB Final Assembly Line (FAL) in Toulouse, France. Following the fuselage section joining phase, the wings, the horizontal and vertical tailplane as well as tail cone have been joined to the fuselage. Following this, the A350 XWB will move to the next assembly station for structural completion, ground testing and start of cabin installation.

The aircraft is scheduled for delivery early next year and will be the first of 48 A350 XWBs acquired by Cathay Pacific (CAT). (CAT)'s A350 XWB fleet will include 22 A350-900s and 26 of the larger A350-1000s, for operation on long- and medium-haul services.

The A350 XWB is Airbus' all-new mid-size long range aircraft and the latest member of the manufacturer's leading wide body family. It is the world's most modern and efficient aircraft in its size category and is setting new standards in terms of in-flight experience, operational efficiency and cost-effectiveness for airlines.

The A350 XWB has been especially successful in the Asia-Pacific region, where 11 major airlines have ordered a total of 244 aircraft out of the 781 total ordered so far. (CAT) represents one fifth of the A350 XWB total orders from the Asia-Pacific.

News Item A-5: "Singapore’s Changi Airport Signs Up 5 New Airlines for T4" by (ATW) Jeremy Torr, July 13, 2015.

Singapore’s Changi Airport will have five new tenants for its new S$1 billion/$750 million Terminal 4, due to open in the second half of 2017.

The new tenants include three AirAsia subsidiaries (AirAsia Berhad (Malaysia) (ASW), Indonesia AirAsia (AWR) and Thai AirAsia (THA)) as well as flag carriers Korean Air (KAL) and Vietnam Airlines (VIE). They will join lead tenant Cathay Pacific Airways (CAT) as Terminal 4 launch airline customers.

The new terminal is billed as a replacement for the airport’s previous Budget Terminal, but also as an extension of the airport’s full-service provision. It will boost Changi’s overall passenger capacity from 66 million passengers a year to around 75 million in its initial phases, and will eventually have a maximum planned capacity of 16 million passengers.

Changi Airport Group (CAG) said a mix of tenants will occupy the new terminal’s four wide body and 17 narrow body gates; more announcements are on the way.

The terminal will feature new, high-tech processing technology for travelers. This will include a complete self-service check-in facility including automated registration and bag drop, facial recognition immigration clearance, and scanned-in self-service boarding processes.

(CAG) management says the new technologies will eliminate the need for manual verification and lead to shorter queuing times and increased flexibility through usage of the self-service kiosks.

“Passengers can expect to pass through the various touch points more smoothly and stress-free, giving them more time to enjoy the facilities,” (CAG) Executive VP Air Hub & Development, Yam Kum Weng said.

(CAG) speculates the new technologies will also boost long-term growth, which has slowed at Changi over recent quarters. The new systems are billed to bring both time saving and lower operating costs for tenant airlines, with some -40% less processing costs compared to other terminal operations.

However, the lack of direct SkyTrain access to the other Changi terminals has seen local low-cost carriers Scoot (SCT) and Tigerair (TGR) hold back on support for the new facility. Transit passengers will need to take buses from T4 to other departure points, something Scoot (SCT) (CEO), Campbell Wilson was highly critical of last year.

News Item A-6: 777-367ER (60723, B-KQZ), delivery.

August 2015: News Item A-1: The Cathay Pacific Group reported a first-half net profit of +HK$1.97 billion/+$254 million, up nearly sixfold from a +HK$347 million net profit in the year-ago half.

First-half revenue for (CAT) was down -0.9% to HK$50.4 billion, with declines in both passenger and cargo sectors, while expenses fell -2.6% to HK$48 billion, resulting in an operating profit of +HK$2.4 billion, up +50% over the same period last year.

Chairman, John Slosar said: “There were higher load factors in our passenger business, reflecting strong economy (Y) class demand. The increase in demand in air cargo markets, which began in summer 2014, continued in the first part of 2015, but demand slackened in the second quarter. There was an improved contribution from our subsidiary and associated companies.”

The number of revenue passengers carried by (CAT) and Dragonair (DRG) in the first half of 2015 grew +8.8% to 16.8 million, and (ASK)s increased +6.4% year-on-year. Passenger load factor was up +2.3% points to 85.9% LF. Passenger yield, however, was down -9.2% for the period.

“Strong competition, a significant reduction in fuel surcharges, foreign currency movements and the fact that a higher proportion of passengers were connecting through Hong Kong put downward pressure on yield,” Slosar said. “Demand on regional routes was strong, particularly in economy (Y) class. There was strong economy (Y) class demand on long-haul routes. But premium class demand, though robust on short-haul routes, was weaker than expected on some long-haul routes.”

Cargo and mail carried by the two carriers increased +8% to 868,000 tonnes, with the cargo and mail load factor showing a marginal (0.9% points) improvement year-on-year to 64.1%. Cargo and mail yield, however, declined -11.1% during the half year.

Slosar said that a sustained increase in cargo demand during the first few months of 2015 slackened in the second quarter, bringing the group’s cargo revenue down -2.5% for the period to HK$11.4 billion. He blamed “strong competition, overcapacity in the industry and a significant reduction in fuel surcharges” for the collapse in cargo and mail yield.

“We expect our cargo business to be stable in the second half of 2015,” Slosar said. “We expect more competition on our transpacific routes but intra-Asia shipments traffic will continue to grow. Market conditions will continue to fluctuate [but] we are well placed to take advantage of any increase in demand.”

Looking forward, Slosar said, “We expect our business to do well in the remainder of 2015. Our financial position remains strong.”

News Item A-2: The Cathay Pacific Group announced the appointment of Titus Diu as its General Manager China, responsible for overseeing the business and operations of both Cathay Pacific (CAT) and Dragonair (DRG) in Mainland China.

Mr Diu joined Dragonair (DRG) in 1991 and has subsequently held a number of senior positions within the airline in both Hong Kong and Mainland China, including General Manager, Revenue Management & Distribution, General Manager, Hong Kong & Southern China, and Regional Manager, Northern China. Prior to taking up this post, Mr Diu was Chief Operating Officer (COO), Air China Cargo (CAO), a joint venture (JV) cargo carrier between Air China (BEJ) and Cathay Pacific Airways Limited.

Mr Diu graduated from the University of Western Sydney, Australia.

News Item A-3: (HAECO) Americas will expand into High Point, North Carolina, USA. The company will locate its aircraft interiors unit in a vacant building in an $11.3 million project, in which it pledges to create +147 jobs over five years.

News Item A-4: "Top 10 Premium Economy Class 2015" by AIRWAYS publication placed Cathay Pacific (CAT) in 6th place - - see attached "CAT-2015-08 - Top 10 Premium Economy Class 2015."

September 2015: News Item A-1: Hong Kong flag carrier, the Cathay Pacific Airlines Group saw +8.5% year-over-year passenger traffic growth in August.

The group, which includes regional carrier Dragonair (DRG), broke the 3 million barrier for the first time with 3,091,478 passengers and saw its load factor grow +1.4% to 88.6% LF. This was despite and a commensurate capacity boost of +6.1% over the same time period. “We saw strong demand for leisure traffic to [regional] holiday destinations and very high load factors on long-haul routes to Europe, Africa, and North America,” (CAT) General Manager Revenue, Patricia Hwang said.

However, Kwang also said the (MERS) outbreak in Korea had hit overall passenger numbers, and that Korean schedules “continued to operate on reduced capacity throughout August.” This led to premium passenger traffic remaining below expectations on key long-haul routes, putting continued pressure on overall yields, she added.

(CAT) registered a cargo growth of +0.8% year-on-year, which totaled 148,109 tonnes of cargo, leading to a -1.9 point drop in cargo load factor to 60.6% LF.

Nonetheless, Cathay (CAT) increased its cargo and mail revenue slightly +0.4% year-over-year, possibly due to higher value cargo bookings.

News Item A-2: Cathay Pacific Airways (CAT) has made Dusseldorf (DUS) its second destination in Germany with the launch on September 1 of non-stop flights on the 9,201 km route from Hong Kong (HKG). Service will operate 4x-weekly using (CAT)’s 275-seat 777-300ER airplane. No other carrier operates the city pair. (CAT) already serves Frankfurt in Germany (with non-stop daily flights), as well as seven other European cities; Amsterdam, London Heathrow, Manchester (launched in December 2014), Milan Malpensa, Paris (CDG), Rome Fiumicino and Zurich (launched in March 2015). Service to Moscow Domodedovo was suspended at the end of May 2015.

News Item A-3: Rolls-Royce (RRC) signed the first wide body agreement for its new TotalCare Flex service, designed for mature engines, with Cathay Pacific (CAT) to support (Trent 800)s on 17 Boeing 777s. It is also the first TotalCare Flex agreement with an airplane owner and operator.

News Item A-4: Hong Kong Aircraft Engineering Company (HAECO) has named James Barrington as Director for Airframe Services; Greg Hughes Director for Components & Engine Services; Kevin Carter as Director of Cabin Solutions; Richard Kendall as Deputy (CEO) of (HAECO) Americas; Angus Barcley as Director & General Manager of Hong Kong Aero Engine Services; Summit Chan as (CEO) of (HAECO) Xiamen; and Lutz Wierschin as General Manager of (HAECO) Landing Gear Services.

News Item A-5: Hong Kong International Airport (HKIA) recorded 6.3 million passengers using the facility in August 2015, up +8.8% year-over-year.

Flight movements increased +3.4% to 34,870 year-on-year driven mainly by an upsurge in both transfer/transit aircraft numbers (up +11%) and local Hong Kong aircraft movements (up +13%). The airport saw most traffic growth to Japan and Southeast Asian destinations.

On a 12-month basis, passenger volume grew +7.9% to 67 million passengers from August 2014, and cargo grew +1.6% to 4.4 million tonnes.

(HKIA) spokesperson Henry Ma said recent carrier network additions helped. These included Scandinavian Airlines (SAS), which started a 5x-week schedule to Stockholm in September, and Cathay Pacific (CAT), which added a 4x-week service to Düsseldorf, also in September.

In contrast, cargo volumes at (HKIA) were affected by the regional downturn in manufacturing, seeing a -1.2% drop year-on-year to 361,000 tonnes.

(HKIA) management attributed the drop to a -5% year-over-year drop in trans-shipments, and a fall of -1% in import cargo from the key markets of China and Taiwan.

The airport has been approved to start planning a third runway as part of its plan to ease slot congestion. The airport authority has said that aircraft movements at the airport are rapidly approaching the maximum of 68 per hour, and that it would likely reach maximum runway capacity of 420,000 flight movements a year, by 2016.

News Item A-6: "Cathay Receives 70th Boeing 777" - see photo
"CAT-2015-09 - 70th 777.jpg" in (ATW) Linda Blachly Photo Gallery.

Boeing (TBC) delivered Cathay Pacific Airways (CAT)’s 70th 777 airplane, which is also the last and 53rd 777-300ER (Extended Range) of its confirmed orders. With this delivery, (CAT)’s 777 airplane fleet comprises 53 777-300ERs, 12 777-300s and five 777-200s.

(CAT) is one of the launch customers for the 777X with 21 777-9s on order.

777-367ER (60724, B-HNR), delivery.

October 2015: News Item A-1: "Missiles and Jets Are "Operating on Very Different Altitudes": Cathay's Decision to Change Hong Kong - Europe Route Disputed by Other Airlines" by South China Morning Post Danny Lee, October 18, 2015.

A gulf has emerged among airlines flying between Hong Kong and Europe on routes over the Middle East that may become vulnerable as Russia fires missiles on war-ravaged Syria.

Lufthansa (DLH), Swiss International Air Lines (CSR) and Turkish Airlines (THY) continue to operate flights over the Caspian Sea despite warnings from air safety agencies (issued soon after Moscow escalated its military involvement in the civil war).

In contrast, Cathay Pacific Airways (CAT), which flies to Frankfurt and Zurich like (DLH) and (CSR), promptly rerouted its European flights to cruise over northern China and Russia instead of the Middle East.

The change came after the International Civil Aviation Organization (ICAO) and the European Aviation Safety Agency (EASA) released safety bulletins concerning possible threats to passenger jets. The warnings covered Iraq, Iran, and the Caspian Sea.

In response to the bulletins, Hong Kong's aviation safety authority, the Civil Aviation Department, said it issued "Notices to Airmen" and "Flight Operations Notice" advisories to foreign and local carriers "to draw [the] attention of airline operators and urge them to evaluate the flight safety risks."

But the Sunday Morning Post tracked flights on October 16 and found (DLH)'s Frankfurt and Munich-bound planes, Turkish Airlines (THY)'s Istanbul-bound jets and (CSR)'s Zurich-bound aircraft all flew over the Caspian Sea.

Sophy Zheng, a (DLH) spokeswoman for greater China, acknowledged precision weapons crossed air routes between Europe and the Middle East, but believed it was safe to fly, because the missiles and jets were "operating on very different altitudes."

"Safety is the highest priority for (DLH)," she said, noting that the guidance from the two international agencies did not include a requirement to terminate or plan alternative routes.

Swiss International (CSR) said it did not see the need to change its routing at present, based on intelligence shared between authorities and its parent company the Lufthansa Group.

Airlines have taken greater caution flying over conflict zones following the shooting down of Malaysia Airlines (MAS) flight MH17 last July over Ukraine at 33,000 ft en route from Amsterdam to Kuala Lumpur, killing all 298 people on board the 777.

On October 13, Dutch investigators released conclusions of their probe, finding a Russian-made (BUK) missile had brought down the 777.

Immediately thereafter, (CAT) diverted its Italian and Switzerland-bound flights to Zurich, Rome and Milan to avoid passing over Iran and the Caspian Sea. The new flight paths add an hour of flying time.

(CAT) said it already had a policy of not flying over Iraq, Afghanistan, Ukraine, and Syria.

News Item A-2: Cathay Pacific Airways (CAT) appointed Philippe Lacamp to Senior VP Americas. He will oversee all facets of (CAT)’s operations and commercial activities in the Americas, and will be based in the company’s USA headquarters in San Francisco, California.

(HAECO) Americas has named Mark Peterman President of (HAECO) Cabin Solutions and Jose Pevida Senior VP of Engineering for HAECO Cabin Solutions. David Kelly will be the company’s new VP of Marketing & Strategy.

News Item A-3: The (HAECO) Group has completed its first "C" check on a Boeing 787-8.

News Item A-4: Hong Kong International Airport (HKIA) reported handling 5.4 million passengers in September, up +6.3% year-over-year (YOY). Airport management attributed the increase to a +12% (YOY) growth in travel of Hong Kong residents and a “significant” rise in arrivals and departures from Japan and Southeast Asia.

Aircraft movements increased +3.3% to 33,085 compared to September 2014, and transfer traffic also saw a solid +7% (YOY) rise.

In the first nine months of 2015, (HKIA) saw an overall passenger growth of +8.4% with 51.2 million using the airport, and flight movement growth of +4% with a recorded 301,790 aircraft using the facility.

Compared to the previous 12 months, passenger volume grew +8% to 67.3 million overall, and flight movements increased +4.2% to 402,635.

Bucking recent cargo trends, (HKIA) also saw modest growth in freight figures. September cargo volumes were up +1.1% year-on-year to 368,000 tonnes after several months of slumping figures.

(HKIA) management said the rebound in air cargo was primarily due to a +3% (YOY) growth in exports from the region, despite negligible growth in imports and a drop in trans-shipment volume of -3% (YOY).

On a rolling 12-month basis, cargo handled grew +1.3% to 4.4 million tonnes overall.

November 2015: Cathay Pacific Airways (CAT) will increase Hong Kong - Adelaide in December to 5x-weekly.

December 2015: News Item A-1: "Incident: Cathay Pacific (CAT) A330-300 at Delhi on December 19th 2015, Suspected Brakes Problem."

A Cathay Pacific (CAT) Airbus A330-300, registration (B-LAR) performing flight CX-695 from Hong Kong (China) to Delhi (India), was descending towards Delhi, when the flight crew (FC) stopped the descent at FL160 and entered a hold to work their checklists reporting they had a brakes indication. After working the checklists, the flight crew (FC) declared an emergency and positioned for an approach to runway 28 (length 3,810 meters/12,500 feet) and landed safely about one hour after interrupting the descent.

News Item A-2: Cathay Pacific Airways (CAT) was fined almost EUR500,000/US$547,000 for what a French court termed "irregular pay practices" concerning pilots (FC) operating European routes for (CAT).

January 2016: News Item A-1: Dragonair (DRG) is being renamed "Cathay Dragon" in an effort to align itself more closely with parent Cathay Pacific (CAT). Its aircraft will be repainted with a livery design similar to (CAT)’s. However, the 2 airlines will continue to be operated separately under their own licenses.

(DRG) has been a wholly owned subsidiary of (CAT) since 2006, and operates a fleet of 42 Airbus A330 and A320-family aircraft. The 1st aircraft to be rebranded will be an A330, scheduled for April. The design will be introduced to the rest of the fleet progressively “in accordance with the regular painting schedule.”

(DRG) said the new livery will feature a deeper shade of red than the current Dragonair (DRG) colors. It will use the familiar (CAT) “brushwing” on the tail, and the current Dragonair (DRG) dragon logo will be used on the aircraft nose.

Cathay Pacific (CAT) revealed an updated livery of its own in November, with a Boeing 777-300ER the 1st airplane to feature the new look. These changes include modification to the brushwing, and a simplified color range of green, gray, and white.

News Item A-2: (HAECO) Americas’ Lake City, Florida facility has received a new hangar floor, refurbished hangar doors, energy-efficient lighting, new fire and safety systems and a new training area. And (HAECO) Americas has pledged $50,000 to endow a scholarship for Aerospace Engineering & Aviation Maintenance at Embry-Riddle Aeronautical University.

News Item A-3: (CAT)’s 1st Airbus A350 delivery has been affected by seat production issues, and appears likely to be delayed by a few months. (CAT) was originally expecting to receive its initial A350 in February, but (CAT) is now being less specific and says it is aiming for 1st delivery early this year. (CAT) (CEO) Ivan Chu admitted there would be a delay, but said it will not be major.

February 2016: News Item A-1: Cathay Pacific Airways (CAT) will increase Hong Kong - Boston Boeing 777-300ER service from 4x-weekly to 5x-weekly on May 5.

News Item A-2: Cathay Pacific Airways (CAT) launched its #MyChinaExperience Tumblr blog at cathaypacific.tumblr.com, the 3rd part of a multi-layered digital and online campaign it said will “inspire and celebrate the diversity of travel in China.” (CAT) said the blog was created to “engage, encourage wanderlust and introduce intrepid travelers to the many wonders of China.”

The #MyChinaExperience Tumblr will feature unique content curated by Cathay Pacific (CAT), including photos, essays, articles, videos, and more from contributors of all backgrounds.

News Item A-3: (HAECO) Cabin Solutions announced Cathay Pacific Airways (CAT) will become the launch customer for its new Vector Y+TM economy (Y) class passenger seat on (CAT)’s A350-1000 aircraft. The new seat, designed for long-haul operations, is the latest model from the Vector (TM) seat platform featuring carbon fiber construction, recline with seat pan articulation and industry-leading living space.

March 2016: News Item A-1: Cathay Pacific Airways (CAT) has posted a net profit of +HK$6 billion/+$774 million for 2015, up +90.5% compared to a net profit of +HK$3.15 billion for 2014.

(CAT) attributed the improved performance to low fuel prices, along with strong economy (Y) class demand that offered higher load factors throughout the year.

(CAT)’s overall operating expenses (ex-fuel) increased +2.3% in 2015, which was partly attributed to congestion and flight restrictions at Hong Kong International Airport and across Greater China, as well as a workforce increase.

The company also noted that “unfavorable foreign currency movements” had contributed to a drop in overall yield, which slipped -11.4% to HK59.6 cents.

This helped push the overall Cathay Group revenue down -3.5% to HK$73 billion compared to the 2014 figure. This came despite a +6% rise in capacity from the introduction of new routes to Boston, Düsseldorf, Hiroshima, and Zurich. During the year, (CAT) cut its services to Moscow and Doha, as well as subsidiary, (DRG)’s Manila service.

(CAT) also reported a weaker than expected demand for premium class seats on some long-haul routes. It said cargo demand was weak, especially in (2H) 2015. The cargo division reported a -9% year-over-year drop in cargo revenues to HK$23.1 billion.

However, (CAT)’s overall load factor increased +2.4% to 85.7% LF.

(CAT) took delivery of 3 Airbus A330-300s and 6 777-300ERs in 2015. Over the 12-month period, 4 747-400s and 4 A340-300s were retired. (CAT) expects to take delivery of the 1st of its order of 36 A350-900 XWBs in May 2016, following a 2-month delay for interior retrofits.

News Item A-2: Hong Kong Aircraft Engineering Company (HAECO) posted revenue of HK$12 billion/$1.55 billion in 2015, up +1.4% from 2014. Operating profit was +HK$339 million, down -22.8% from +HK$439 million in 2014.

Full-year profit attributable to shareholders was HK$464 million, down -19.0% year-over-year.

Year-end debt was 37.7% of capital, up +2.4%. Total annual dividends were HK$1.70 per share. Management said profit was down due to new airframes, engines and components requiring less maintenance than their predecessors.

Hong Kong airframe man-hours were up +13.8%, reflecting good demand and more staff. Line man-hours also rose, but man-hours for components and avionics dipped as Boeing 747-400s were retired.

(HAECO) Americas recorded a higher loss in 2015 than in the 11 months following acquisition in 2014 as high works-cope airframe services were replaced by smaller work-scope contracts. Prospects for (HAECO)’s different businesses in 2016 are mixed. Hong Kong airframe capacity is expected to grow with more staff. Demand for line services in Hong Kong should remain strong. Demand for (HAECO) Americas’ airframe services should be similar to that of 2015.

News Item A-3: Cathay Pacific Airways (CAT) has extended its contract with FLYdocs for electronic records-management software. Under the 10-year contract, (CAT) will continue to use FLYdocs as a source for all data required for redelivery of aircraft.

News Item A-4: Cathay Pacific Airways (CAT) plans to retire all of its Airbus A340-300s by the end of 2017. (CAT) phased out 4 last year, leaving 7 in the fleet. 1 was sold in February, and 2 more will leave the fleet this year. The remaining 4 will depart in 2017. (CAT) also has advanced retirement plans for its last 3 747-400 passenger aircraft to this year from 2017.

News Item A-5: The 1st A350-900 for Cathay Pacific Airways (CAT) has completed its maiden flight in Toulouse, France. The aircraft will now enter the final phase of production, including cabin completion, further ground checks and test flights before being prepared for delivery in the 2nd quarter of the year.

(CAT) was originally expecting to receive its initial A350 in February, but delivery has been delayed because of supply issues with seat manufacturer Zodiac Aerospace.

The A350 will be the 1st of 48 A350 XWBs acquired by (CAT). (CAT)’s A350 XWB fleet will include 22 A350-900s and 26 of the larger A350-1000s, for operation on long- and medium-haul services.

April 2016: News Item A-1: "Hong Kong International Sees Passenger and Cargo Growth in March" by (ATW) Jeremy Torr, April 18, 2016.

Hong Kong International Airport (HKIA) recorded a +4.8% rise in the number of passengers handled in March 2016 compared to March 2015, with a total of 6 million passengers. Aircraft movements were also up by +2.2% year-over-year to 35,060.

(HKIA) management described March growth as “steady”; indeed, January 2016 saw a much larger +16% growth.

Bucking a regional trend for shrinking cargo volumes, (HKIA) also saw a “mild” increase in cargo volumes in March compared to the previous year. March cargo volume rose to 368,000 tonnes, up +1.1% year-over-year. Cargo growth came principally from the India and Australasian markets, which saw up to +5% growth in export demand.

Executive Director Airport Operations, C K Ng said (HKIA) was concentrating on developing smart airport technologies to enhance operational efficiency and passenger experience. One example he cited is (HKIA)’s Self Bag Drop service, which has so far been adopted by Cathay Pacific (CAT) and Hong Kong Airlines (CRY). “This new service enables passengers to cut processing time by half compared to queuing at traditional check-in counters,” said Ng.

Overall, for the 1st quarter 2016, (HKIA) handled 17.6 million passengers and saw 102,880 aircraft movements. These figures indicated +7.5% and +4% rises in each, compared to (1Q) 2015.

News Item A-2: (HAECO) Americas has appointed Richard Kendall as (CEO).

May 2016: "Cathay Pacific (CAT) and Lufthansa Cargo (LUB) Enter Joint Business Agreement" by "China Aviation Daily" May 12, 2016.

More direct connections, greater flexibility and time savings combined with service enhancements (these are just some of the benefits customers will enjoy in the future thanks to the cooperation between the cargo division of Cathay Pacific Airways (CAT), the leading air cargo carrier in Asia, and Lufthansa Cargo (LUB), Europe's largest air cargo carrier.

Simon Large Director Cargo at (CAT), and Peter Gerber (CEO) & Chairman of the Executive Board of Lufthansa Cargo, signed an agreement for a highly integrated bilateral cooperation in Frankfurt. With respect to the cooperation routes between Hong Kong and Europe, both airlines will in the future work closely together on network planning, as well as sales, Information Technology (IT) and ground-handling. This will bring Hong Kong, the world's busiest air cargo hub, closer to Europe, strengthening one of the world's great trade lanes.

"Our joint network will cover >140 direct flights per week between Hong Kong and 13 European destinations", said Simon Large. "(CAT)'s large number of direct connections to multiple European destinations, complements (LUB)'s strength in Frankfurt, the most important European air freight hub, and in Europe through its dense feeder-network."

"As a result of our joining forces, customers will gain access to unique flexibility with more flights to choose from and a combination of feeder and direct flights. In this way, their cargo can reach its destination hours earlier", explained Peter Gerber. "We will also have more options for shipments which have to be transported by freighter due to their size or properties."

The cooperation will also focus on service enhancements. For example, customers will be able to access the entire joint network via the booking systems of both partners. Joint handling, initially at the Hong Kong and Frankfurt hubs, will also make things easier for customers, since there will be just 1 point for export drop off and import delivery.

Both partners plan to transport the 1st shipments under the framework of the cooperation from early next year (initially from Hong Kong to Europe). The ability to also book eastbound shipments from Europe to Hong Kong will then follow in the course of the year.

The joint activities will be carried out in full compliance with all applicable laws, including the competition rules of the European Union (EU) and Hong Kong.

June 2016: "Hong Kong to Build 3rd Runway; Will Impose Passenger Levy" by (ATW) Jeremy Torr, June 3, 2016.

The Hong Kong Airport Authority (HKAA) will add a surcharge on all departing passenger tickets from August 1, 2016, to help fund the construction of a 3rd runway at Hong Kong International Airport (HKG).

The fee, called an Airport Construction Fee (ACF), will apply to departing passengers including both origin-destination and transit-transfer travelers using (HKG). The charge will vary according to the type of flight—long-haul or short-haul—and the class of cabin used by the passengers. It will vary from HK$70 ($9) for economy (Y) short-haul to HK$180 for business (C) long-haul users at the airport, with a slight reduction for passengers using transit facilities only.

(HKAA) said it expects around 70% of passengers using (HKG) will pay <HK$90 on each (ACF) ticket levy. “We have considered a number of factors [in introducing the (ACF)], including the additional cost imposed on passengers, and maintaining (HKG)’s competitiveness as a hub airport,” (HKAA) (CEO) Fred Lam said.

The airport is targeting 2023 for completion of the new runway, which will include an extra terminal and taxiways, and cost an estimated HK$141.5 billion.

Work is scheduled to begin on the new runway in August 2016, and the collection of the (ACF) will continue “until all borrowings related to the third runway project have been fully repaid,” said (HKAA).

(HKG) saw 68.5 million passengers in 2015, and it handled 4.38 million tonnes of cargo during the same period. The extra runway is expected to boost these to 102 million passengers and 8.9 million tonnes of cargo by 2030.

July 2016: News Item A-1: "Hong Kong Airport Sees 5.1% Passenger Growth in 1st Half" by (ATW) Jeremy Torr, July 18, 2016.

Hong Kong International Airport (HKIA) has reported a +5.1% rise in passenger numbers for the 1st 6 months of 2016, compared to the same period in 2015. It also registered a +2.6% increase in flight movements to >204,750 over the same period compared to the 2015 figures.

The total number of passengers handled by the (HKIA) between January and June 2016 was 35.2 million, with 5.9 million in June 2016 (up +5.4% compared to the same month in the previous year). (HKIA) management said the recent growth in passenger traffic “was mainly driven by Hong Kong resident travel, which grew +15% compared to [June] last year.”

(HKIA) General Manager Strategic Planning & Development Julia Yan said the facility was looking for continued growth in passengers in (2H) 2016, but expected cargo “to consolidate” following a drop of -0.8% to 2.1 million tones in (1H) 2016 compared to the 1st 6 months of 2015, despite a +5.3% year on year increase to 368,000 tonnes in June 2016. Total cargo shipped in the 12 months to June 2016 was 4.4 million tonnes, down -0.6% compared to the same period up to June 2015.

“Looking towards the second half of the year, passenger traffic is expected to grow steadily and we are [also] closely monitoring any impact on external economic environment and traffic figures caused by Britain’s referendum to leave the European Union (EU),” Yan said. The airport said the jump in cargo figures was helped significantly by transshipment business, principally in cargo shipments to and from Southeast Asia and mainland China. Similarly, passenger traffic saw the most gains in numbers from North Asia, SE Asia, and mainland China regions.

News Item A-2: Cathay Pacific Airways (CAT) is starting to build up its Airbus A350-900 fleet, as it prepares for the A350-900’s long-haul debut later this year. (CAT) has taken delivery of its 2nd A350, which entered service on July 20. This follows the arrival of the 1st aircraft in May. (CAT) will continue to fly both aircraft, which are leased from AerCap (DEA) on short-haul international flights, until more A350s arrive later in the 3rd quarter of this year.

News Item A-3: See video of Cathay Pacific First Class Service from Singapore to New York:

September 2016: Cathay Pacific Airways (CAT) will expand nonstop Boston - Hong Kong service from 4x-weekly to daily on March 27, 2017.

October 2016: News Item A-1: Cathay Pacific Airways (CAT) said its outlook has deteriorated as overcapacity/strong competition has put pressure on its passenger business, with continued shortfalls in revenue and heavy pressure on yield. It no longer expects (2H) 2016 performance results to be better than (1H) 2016.

News Item A-2: Cathay Pacific Airways (CAT) has signed long-term maintenance agreements with Revima for the support of landing gear installed on (CAT)’s Boeing 777-300 airplanes and on Airbus A320/321 aircraft operated by its subsidiary Dragonair (DRG) which will soon be rebranded as Cathay Dragon (DRG). Through these multi-year agreements, Revima will provide repair and maintenance services of landing gears and related components for (CAT)’s Boeing 777-300 and A320/321 fleet, with an exchange solution. Revima will also provide Engineering and on-site support.

News Item A-3: Greensboro, North Carolina-based (HAECO) Americas will exit its line maintenance services segment in the USA to focus resources on its principal businesses, Maintenance Repair & Overhaul (MRO) Services and Cabin Solutions. The company expects to systematically end operations at most locations by the end of 2016. The Greensboro location will not close.

News Item A-4: Silk Way Airlines (AZQ) acquired ex-Cathay Pacific (CAT) 747-467F (32571) from Boeing Capital for lease to Sky Gates Airlines, Moscow.

747-412 (27132, B-HKT) removed from use and stored at Victorville, USA. 747-467 (27230, B-HUI) removed from use ferried to Bruntingthorpe. A340-313X (157, B-HXE) withdrawn from use and ferried to Lourdes. A350-941 (46, B-LRF), ex-(F-LRF) delivery.

November 2016: News Item A-1: Cathay Pacific (CAT) launched 2x-weekly Hong Kong - Portland (PDX) Boeing 747-8F freighter services.

News Item A-2: "Smooth Flying on a Cathay A350 to Manila" by Karen Walker karen.walker@penton.com in (ATW) Editor's Blog, November 17, 2016.

A nice surprise awaited me yesterday as I connected from Hong Kong to a Cathay Pacific (CAT) flight bound for Manila. At the gate was an Airbus A350. (CAT) has just 5 A350-900s in service, having started taking delivery of the wide body earlier this year. It has 22 A350-900s on order, including those delivered, plus 26 of the larger A350-1000 variant, which starts its flight-test program this year. For (CAT) the aircraft will form the backbone of its mid-size long-haul fleet, replacing aircraft like the Airbus A340&#8203;. In addition to short-haul routes such as Hong Kong - Manila, (CAT) is already deploying the A350 on long-haul routes such as Auckland, Dusseldorf, and London Gatwick.

My flight, CX907, was just >2 hours and we cruised at 41,000ft (a smooth and A380-level quiet flight). It was my 3rd A350 flight (I flew 1 of the test aircraft in 2015 out of Toulouse and on a Finnair (FIN) delivery flight from Toulouse to Helsinki later that year. But this was my 1st scheduled commercial flight (and also the 1st A350 flight for some of the cabin crew (CA)). Aside from being pin-drop quiet, the A350 cabin is very spacious, has large windows, high ceilings, large bins that come down low for loading but seem to then vanish into those ceilings on closing, and huge galley areas.

Cathay (CAT) has styled its cabins in neutral beige, adding to the spacious feel, and the business (C)/first (F) cabin, with its 1-2-1 layout so all passengers have an aisle and lie-flat seat/beds, looks sophisticated.

(CAT) expects to have 22 A350s in service by end of 2017. Welcome to the new standard of commercial airline flying.

News Item A-3: Hong Kong on November 14 officially launched a new air traffic control (ATC) system at the city's airport, brushing aside concerns from some pilots (FC) about the readiness of the new arrangement.

The HK$1.5 billion Autotrac 3 air traffic management (ATM) system, procured from USA defense company Raytheon (RAY), was put in operation in phases since June this year even though there had been major breakdowns during the testing phase. With the system now going live, the Civil Aviation Department (CAD) is facing questions as well as strong criticism over the decision.

Jeremy Tam Man-ho, a newly-elected lawmaker who had once been a pilot (FC), accused the (CAD) of being irresponsible, alleging that the department insisted on replacing the old system despite knowing that there were some bugs in the new one, "Apple Daily" reports.

Media reported earlier that 2 (CAT) planes almost had a head-on collision at Hong Kong International Airport in late October. Citing people working at the air control tower, the reports suggested that the new system was to blame for the incident that could have resulted in a disaster. But (CAD) told a different story, stressing that the incident had nothing to do with the new system.

However, Tam said it is clear that there are some problems yet to be resolved in relation to the new system. The (CAD) should have made sure that the problems are eliminated, rather than hurrying to launch the new system, he said. The Hong Kong Airline Pilots Association said earlier this month that it was concerned about the new (ATC) system. While it admitted that Hong Kong needs to upgrade its old system, the association said it is not convinced about the new one's capabilities in light of the breakdown in late October.

According to "am730," the (CAD) demanded its staff to approve the new system and say it is ready to go, when they answered an internal questionnaire. The paper cited a (CAD) employee as saying that many of them felt indignant at the request but dared not speak out since they were told that anyone who failed to follow the order could be denied promotions or even made to suffer pay cuts. Learning about the alleged threat from (CAD)'s top management, Tam urged the government to investigate not only the air traffic safety concerns brought by the new system but also the (CAD) to see if any of its official was involved in misconduct in public office.

Responding to a query from "am730," the department admitted that there it had indeed circulated a questionnaire among some of its staff. But it said the move was nothing unusual and that it merely followed an international practice. It stressed that the employees were absolutely not under any form of coercion or pressure in relation to their responses to the questionnaire.

News Item A-4: "Cathay Pacific Statement on Cabin Crew Retirement Age" by China Aviation Daily, November 18, 2016.

Cathay Pacific (CAT) already scheduled meetings with (CAT)'s cabin crew (CA) union several weeks ago to discuss year-end arrangements and retirement age issues. The meetings with the (CAT) Flight Attendants (CA) Union (FAU) will commence the week of November 21.

(CAT) maintains close communications with the cabin crew (CA) community on matters of mutual interest. It is understood that retirement age is a very important issue for many cabin crew (CA). We are acutely aware that there are also differences of opinion regarding the subject among the crew community itself.

Retirement age is a complex issue, with numerous factors to be considered, including opportunities for career progression for those crew who joined Cathay Pacific (CAT) in recent times. There are >4,500 Hong Kong-based, entry-level cabin crew (CA) employed by (CAT). Any extension to the retirement age would prolong the promotion time for each rank.

(CAT) is an equal opportunity employer. Age has never been a factor in the recruitment, training or promotion of our staff. As recently as 2008, (CAT) aligned the retirement age of the Hong Kong-based cabin crew (CA) from 45 to 55 years.

(CAT) retirement age policies are consistent with the laws of Hong Kong. There are different regulatory requirements to comply with in terms of those cabin crew (CA) who are based outside of Hong Kong.

News Item A-5: "INCDT: Passenger Flight to Hong Kong Forced to Make Emergency Landing in Siberia Amid On-Board Fire Alert" by Julian Robinson, "The Daily Mail," November 23, 2016.

A passenger 777 jet heading from London Heathrow to Hong Kong made an emergency landing in Siberia amid fears a fire had broken out inside the plane. The Cathay Pacific (CAT) flight, carrying 214 passengers and 18 crew, diverted to Novosibirsk in NE Russia in the early hours of the morning.

The drama unfolded 6 hours in to the flight on board the Boeing 777 flight CPX250, when an alarm went off signaling a 'possible aft cargo hold fire.' Airport bosses confirmed the 777 made a safe landing at the snow-covered Tolmachevo international airport at 06.20am UK time.
Passengers and crew were accommodated and fed at nearby hotels.

Cathay Pacific (CAT) later said: Cathay Pacific (CAT) flight CX250 which departed from London at 6:02 pm local time (November 22, 2016) was diverted to Novosibirsk International Airport in Russia about 6 hours on its way to Hong Kong due to an indicator signal in the flight deck that there could have been a fire in the aft cargo hold.
At this time, there is no evidence that there was a fire at the aft cargo hold.

In a tweet, (CAT) added: 'The safety of our passengers and crew is our top priority. We assisted passengers to go to a hotel for rest until a relief flight arrived. "We thank the Russian authorities and teams helping us on the ground for their support, and our passengers for their understanding."

Local authorities told Russian new agency "TASS:" 'Early information received said the landing was caused by a false activation of an emergency gauge.' Passenger pictures showed the snow-covered terminal in Siberia with 1 man, Michael Ots, posting the message: 'Thankful to be safe.' (CAT) told "MailOnline" it had sent another plane from Hong Kong so passengers could continue their journey just after midnight local time.

A Cathay Pacific (CAT) spokesperson added: "Safety is always our top priority and we would like to thank the Novosibirsk authorities and local teams for the support they extended to our operation and passengers. We also appreciate the understanding of our passengers as well as the prompt actions of the flight and cabin crew."

An investigation is underway.

December 2016: News Item A-1: Air Canada (ACN) and Hong Kong flag carrier, Cathay Pacific (CAT) have agreed to code share, the airlines announced December 22. The arrangement will go into effect when tickets go on sale January 12, 2017 for flights beginning January 19.

(ACN) will offer code share services on (CAT) and Cathay Dragon (DRG) flights connecting with Air Canada (ACN)’s service to Hong Kong from Vancouver and Toronto. (ACN) will place its code on (CAT) and (DRG) flights to Manila and Cebu in the Philippines; Kuala Lumpur, Malaysia; Ho Chi Minh City and Hanoi in Vietnam; and Bangkok, Phuket and Chiang Mai in Thailand.

(CAT) passengers flying from Hong Kong to Vancouver and Toronto will be able to fly onward on Cathay Pacific (CAT)-coded Air Canada (ACN) flights to “all major cities across Canada,” (ACN) said, including Montreal, Winnipeg, Edmonton, Calgary, Ottawa, Quebec, and Halifax, among others.

Members of each airline’s loyalty programs will be able to earn reciprocal mileage accrual and redemption benefits while flying on these code share routes. (ACN) is a Star (SAL) Alliance member, while Cathay belongs to the Oneworld (ONW) Alliance.

(CAT) operates 2x-daily flights to Vancouver from Hong Kong, utilizing Boeing 777-300ER airplanes. Beginning March 28, 2017, (CAT) will add 3 additional Hong Kong - Vancouver flights, utilizing Airbus A350-900 aircraft. (CAT) also operates 10x-weekly Hong Kong - Toronto service. (ACN) operates daily flights from both Toronto and Vancouver to Hong Kong, utilizing 777-200ER airplanes on the Toronto - Hong Kong route and 777-300ERs on the Vancouver - Hong Kong route.

January 2017: Hong Kong flag carrier Cathay Pacific (CAT) is reportedly preparing for a business overhaul that could include job cuts, cost savings and shifting flights to its short-haul unit Cathay Dragon (DRG).

Details of a major business review and a plan to stand up to increasing competition from Chinese and Gulf airlines as well as low-cost carriers (LCC)s will be revealed January 18, according to a "Reuters" report.

(CAT) cancelled its 2nd-half profit forecast in October and said it was reviewing its business. The Oneworld (ONW) Alliance carrier saw a sharp profit decline in the 1st half of 2016 with net profit dropping to HK$353 million/$45 million for the 6 months through June 30, compared to a profit of almost +HK$2 billion for the same period a year earlier.

Passenger revenue was down -7.8% to HK$33.4 billion for the half year. “Higher competition, weaker currencies in some markets, and soft premium demand on long-haul routes” were cited as the main causes of “sustained pressure on revenue.”

With massive growth in outbound travel by Chinese travelers, Chinese mainland carriers have accelerated their international expansion pace in recent years, while the major Gulf carriers have also aggressively expanded their China - Europe routes, China - Africa routes and Kangaroo routes that have been Cathay (CAT).

Local (LCC) Hong Kong Airlines (CRY) has also expanded operations and has mapped out long-haul intercontinental ambitions.

February 2017: 12th A350-941 (70, B-LRK), ex-(F-WWTJ) delivery.

March 2017: News Item A-1: Cathay Pacific Airwats (CAT) has blamed increasing competition from direct flights to mainland China as a major factor in its 1st full-year net loss since 2008. (CAT), the Hong Kong flag carrier reported a loss of -HK575 million/-$74 million for 2016, a dramatic reversal from the +HK$6 billion profit it earned in the previous year. (CAT) has been warning of worsening financial health for several months, as it saw a steep drop in profitability in the 1st half of 2016.

News Item A-2: "European Commission (EC) Re-imposes Cargo Cartel Penalties" by Alan Dron alandron@adepteditorial.com, March 17, 2017.

The European Commission (EC) has reinstated fines totaling €776 million/$834 million on 11 airlines for operating a price-fixing cartel on air freight from 1999 to 2006. More legal hearings are likely, as at least 1 of the carriers immediately said it would appeal the decision.

The (EC) originally imposed the penalties in November 2010, but these were annulled by a decision of the European Union’s (EU) General Court in December 2015 on procedural grounds, which ruled there was a technical discrepancy in the prosecution. In a March 17 announcement, the (EC) said it had resolved the discrepancy and was re-imposing the financial penalties on 11 air cargo carriers: Air Canada (ACN), Air France (AFA)/(KLM), British Airways (BAB), Luxembourg-based Cargolux (CLX), Hong Kong flag carrier Cathay Pacific Airways (CAT), Japan Airlines (JAL)/(JSA), (LAN) Chile, Dutch cargo carrier Martinair (MTH), Australia's Qantas (QAN), (SAS) Scandinavian Airlines and Singapore Airlines (SIA).

The (EC) said that a 12th member of the cartel, Lufthansa (DLH) and its subsidiary Swiss International Air Lines (CSR), was spared from the financial penalties after it applied for immunity in 2005 and revealed details of the alleged arrangements between the airlines.

These were said to consist of collusion between the airlines at both bilateral and multilateral levels to fix the level of fuel and security surcharges on cargo. After the initial verdict, all the airlines except Qantas (QAN) appealed. The financial penalty thus became final for QAN). Millions of businesses depend on air cargo services, which carry >20% of all (EU) imports and nearly 30% of (EU) exports,” (EC) Commissioner Competition Policy Margrethe Vestager said. “Working together in a cartel rather than competing to offer better services to customers does not fly with the (EC). Today’s decision ensures that companies that were part of the air cargo cartel are sanctioned for their behavior.”

The (EU) can fine companies participating in cartels up to 10% of their revenue in the year preceding the adoption of a verdict. (SAS) immediately said it would appeal. “We strongly question the European Commission’s move to re-impose a decision that has already been annulled once by the [General Court],” (SAS) General Counsel Marie Wohlfahrt said. “Throughout the entire process, (SAS) has cooperated with the (EC) and, for >11 years, has argued against the (EC)’s perception that (SAS) Cargo had participated in a global cartel.”

Nevertheless, the fine would be recognized as a nonrecurring expense by (SAS) in its earnings for (2Q) 2016/2017. Air France (AFA) - (KLM), which will be fined €325 million if the penalties become final, said it would analyze the new decision and whether to appeal it again at the General Court. It added that the fines had been covered in its financial accounts since 2010.

News Item A-3: The Lufthansa Group has signed a code share agreement with Hong Kong-based Oneworld (ONW) member Cathay Pacific Airways (CAT), beginning April 26, (DLH) follows through on its expansion strategy to partner with non-Star (SAL) Alliance members.

The code share also includes Lufthansa Group subsidiaries Austrian Airlines (AUL) and Swiss International Air Lines (SWISS) (CSR).

The agreement covers (CAT) flights with LH/LX/OS designator codes between Hong Kong to Sydney, Melbourne and Cairns in Australia and Auckland in New Zealand. (CAT) will place its CX designator code on 14 Lufthansa (DLH), SWISS (CSR) and Austrian (AUL) European flights.

“This new code share agreement will offer Cathay Pacific (CAT) passengers enhanced connectivity to destinations in continental Europe through flights operated by (DLH), (CSR) and (AUL) via our gateways in Frankfurt, Dusseldorf and Zurich,” (CAT) (CEO) Ivan Chu said.

Lufthansa Group (CEO) Carsten Spohr called the code share a “ground-breaking partnership.” He added, “The code share and frequent flyer agreement between (DLH), (AUL), (CSR) and (CAT) brings advantages for the passengers of all the partners, because the airlines’ route networks complement each other perfectly.”

Spohr said the cooperation with Cathay Pacific (CAT) is another key building block in (DLH)’s Asia strategy and supplements existing commercial joint ventures with Star (SAL) alliance airlines (ANA), Singapore Airlines (SIA) and Air China (BEJ).

Airfreight subsidiaries of both carriers, Cathay Pacific Cargo and Lufthansa Cargo (LUB), signed a cooperation agreement in May 2016 and (since February 2017) have been jointly marketing their capacities on flights between Hong Kong and Europe.

On February 1, (DLH) signed a commercial partnership agreement with Abu Dhabi-based Etihad Airways (EHD) that will see the 2 companies cooperate via code shares and across catering and (MRO) services.

On March 16, (DLH) signed a code share agreement with Kazakhstan flag carrier Air Astana (AKZ), which began March 26. Neither (EHD) nor Air Astana (AKZ) are members of any of the 3 global alliances.

April 2017: News Item A-1: Cathay Pacific (CAT) parent Swire Pacific has named senior executive Rupert Hogg to replace (CAT) the Hong Kong flag carrier’s current (CEO) Ivan Chu as part of a major leadership reshuffle. Hogg, who is (CAT)’s (COO), will become (CEO) May 1. Chu will become Chairman of China’s John Swire & Sons, where he will “play a leading role in the Swire Group’s overall Mainland China investment and development strategy,” the company said.

May 2017: News Item A-1: Cathay Pacific (CAT) has followed through on its plan to slash management staff by announcing it will cut about -600 staff positions at its headquarters. (CAT), the Hong Kong flag carrier said in March that it intended to cut its management labor costs by -30%. This move is part of (CAT)’s reaction to its worsening financial results, and aligns with corporate restructuring plans. Former (CEO) Ivan Chu drafted the blueprint for the restructuring.

News ITem A-2: Cathay Pacific (CAT), reports the "South China Morning Post", will decide by this summer on an order for as many as 32 narrow bodies, either A320neos or 737-MAXs destined for (CAT)’s Cathay Dragon (DRG) unit.

Hong Kong, remember, plans to open a new airport runway in 2024.

June 2017: 747-467BCF (24925, B-HOU) ferried to Marana USA for storage. 3 A340-313X (208, B-HXG; 218, B-HXH; 227, B-HXJ) sold to AerFinance for parting out at Lourdes, France. A350-941 (93, B-LRO), ex-(F-WZNX) delivery.

August 2017: News Item A-1: Cathay Pacific (CAT) has plunged further into the red for the 1st half of 2017, and is pinning its hopes on a transformation plan to help counter surging competition.

(CAT), the Hong Kong flag carrier reported a net loss of -HKD2.1 billion/-$268.2 million for the 6 months through June 30, a dramatic reversal from a +HKD353 million net profit in the same period last year. The prospect of a full-year loss appears likely, which would be (CAT)’s 2nd in a row. (CAT)’s 2016 full-year net loss of HKD575 million was its 1st since 2008.

(CAT)’s biggest problem is increasing competition in many of its markets, particularly from mainland China’s major airlines. However, rising fuel prices are also adding to (CAT)’s headaches. Fuel costs (including lower hedging losses) rose by +HKD1.7 billion, or +12.7%, in the 1st half.

The outlook for (CAT) in the 2nd half of this year is mixed. Chairman John Slosar noted the operating environment in this period is not expected to “improve materially.” The passenger business will still be assailed by strong competition, and higher fuel prices will also be a factor.

However, Slosar said (CAT) expects to “see the benefits of our transformation [plan] in the 2nd half of 2017, and the effects will accelerate in 2018.” This three-year plan was rolled out earlier this year, and involves a realignment of the corporate structure and a -30% cut in headquarters staff.

Strengthening cargo performance will also help. “Robust demand” and further growth in cargo capacity, yield and load factor are expected in the 2nd half.

Group revenue was up by just +0.4% year-over-year to HKD45.9 billion in the 2017 1st half. Passenger revenue dropped -3.9%, while cargo revenue increased +11.7%. Passenger yield fell -5.2%, because of “intense competition in all classes” and the adverse of effect of a stronger Hong Kong dollar on overseas sales.

Despite its worsening results, (CAT) is continuing to grow. Group passenger capacity rose +1.1% in the 1st half, thanks to a new route to Tel Aviv and increased frequencies elsewhere. Cargo capacity was up +2.3%. Passenger load factor was essentially flat at 84.7% LF, and increased by 4 points to 66.2% LF for cargo.

A range of special items affected the net loss. These included the recognition of a €57.1 million/$66.8 million fine imposed by the European Commission (EC) because of cargo collusion allegations. (CAT) has appealed to the General Court of the European Union (EU) to annul the fine, but the full amount has been accounted for in (CAT)’s results. Other special items include the dilution of (CAT)’s shareholding in Air China (BEJ) from 20.1% to 18.1%; an HKD586 million gain from the sale of "Travelsky Technology;" and HKD224 million related to the head-office cuts.

The group had 203 aircraft in its fleet as of June 30. This included 144 for the parent airline, 46 for Cathay Dragon (DRG) and 13 for Air Hong Kong (AHK). (CAT) had received its 16th Airbus A350-900 by June 30, and another has been delivered since then. The remaining 5 on order are scheduled for delivery by the end of this year.

The A350-900s are the only firm orders scheduled for the remainder of 2017, although (CAT) has 8 A350-1000s and 2 used Boeing 777-300s scheduled to arrive in 2018. The group has 2 more operating leases due to expire this year, and 12 in 2018.

News Item A-2: "Cathay Spurns Budget Route to Health as (CEO) Bets on Service" by Bloomberg News, August 16, 2017.

Cathay Pacific (CAT) isn't going to embrace the discount-fare revolution. Undaunted by the worst half-year loss in at least 2 decades, declining passenger numbers and cheaper fares, (CAT)'s new Chief Executive Officer (CEO) Rupert Hogg rejected suggestions for a budget carrier with an emphatic no. Instead, he plans to focus on better services such as new lounges in major airports, offering Wi-Fi on board planes, more dining options and self-check-in facilities to nurse the carrier back to financial health.

"Broadly speaking, we have no plans to start a low-cost airline," Hogg, 55, said Wednesday. "But we compete with low cost carriers on lots of different routes and clearly we have to have a proposition that price sensitive travelers, new travelers and 1st time travelers find attractive and prefer to fly on our airline relative to the alternatives."

Analysts including Corrine Png, (CEO) of Singapore-based Crucial Perspective Pte., and Shukor Yusof, founder of Endau Analytics in Malaysia, have said (CAT) needs to take a leaf out of rival Singapore Airlines (SIA) and start a budget carrier, or turn its affiliate Cathay Dragon (DRG) into 1 to keep a grip on Hong Kong passengers. (SIA) has operated a low-fare airline for about a decade from its base in Changi Airport, where about 50% of all travelers are now taking a budget carrier.

"They still believe they have this unique market position," Shukor said about (CAT), Asia's biggest international airline. "They don't realize that the way things were done doesn't work anymore. Their reluctance to change is very disturbing."

Hogg took charge in May after (CAT) announced a 3-year corporate transformation program, (CAT)'s biggest in 20 years. He also cut -600 jobs that month as (CAT) struggles in the face of low-cost operators and mainland competitors offering cheaper, direct long-haul flights. The effects of the revamp will be felt in the 2nd half of this year and more in 2018, (CAT) said.

The marquee airline reported Wednesday a net loss of -HK$2.05 billion/-$262 million for the 6 months through June, potentially putting it on course for the 1st back-to-back annual losses in its 70-year history. Average fares declined, mainly on services to North America and Europe, in part due to Chinese travelers going directly from the mainland and skipping Hong Kong.

* More Important

"The fact that they continue to suffer the same structural challenges as before makes it all the more important for (CAT) to figure out ways to capture demand on the Chinese mainland," said John Hu, an analyst at Morningstar Investment Services in Shenzhen.

(CAT) shares rose as much as 2.4% to HK$11.98 in Hong Kong trading Thursday. Daiwa Securities analyst Kelvin Lau upgraded the stock to hold, from sell, and also raised his price target to HK$11.50.

Although the 2nd half will remain loss-making, "we believe losses have bottomed out as management forecasts passenger and cargo yields to sequentially improve," Jefferies analyst Andrew Lee said in a research note after the earnings.

(CAT) has reported losses only for 3 years since it was founded in 1946, once in 1998 in the aftermath of the Asian financial crisis; again, in 2008 as the global credit crisis unfolded; and, last year as a result of fuel-hedging bets gone wrong and intensifying competition.

Last month, Singapore Air (SIA) returned to a profit in the quarter through June after a surprise loss in the previous 3 months. The city-state's flag carrier has embarked on a business review. It's facing pressure from rivals such as Emirates Airline (EAD) and Etihad Airways (EHD) (PJSC) at the premium end, and a host of budget carriers at the lower end.

There are hurdles to starting a budget carrier in Hong Kong, which has been suffering from capacity constraints, according to Will Horton, senior analyst at (CAPA) Centre for Aviation in the city. The airport recently started construction of a 3rd runway and a passenger building to address this problem.

"Hong Kong and other regional airports don't have the slots that would allow a new (LCC) to make an attempt - period," Horton said.

For Cathay (CAT), the declining prominence of Hong Kong relative to the burgeoning wealth of surrounding cities in southern China is also a threat. With the rise of hubs such as Shanghai, Guangzhou and Shenzhen, (CAT) risks being eclipsed by competitors on the mainland such as China Southern Airlines (GUN) and China Eastern Airlines (CEA) that offer cheaper, direct and long-haul flights.

To take on rivals, (CAT) needs to make sure it's as productive as possible and serve customers better, Hogg said. "It's making sure we really understand what customers want and that we can deliver it in a productive way and that we get leaner and more efficient in that market," he said.

September 2017: News Item A-1: Cathay Pacific (CAT) will launch 3 new nonstop routes to Europe from Hong Kong starting with its summer 2018 schedule.

The new routes include: 4x-weekly Hong Kong - Brussels flights, 4x-weekly Hong Kong - Dublin flights and 3x-weekly Hong Kong - Copenhagen flights. The new routes will be operated with Airbus A350-900s. (CAT) has 18 A350-900s in operation with 4 more expected to be delivered by the end of the year.

Cathay Pacific (CAT) (CEO) Rupert Hogg said, “We listened to our customers’ demands for more options and greater flexibility and have responded by building direct air links with these great cities.“

In addition to the 22 A350-900s that will be in its fleet by the end of the year, (CAT) 26 of the larger variant A350-1000s scheduled to join its fleet starting in 2018.

News Item A-2: Cathay Pacific Airways (CAT) has finalized an order with Airbus for 32 A321neo single-aisle aircraft. The aircraft will be operated by Cathay Dragon (DRG), the group’s regional carrier, on services linking its Hong Kong home base with destinations across Asia.

October 2017: Hong Kong-based Cathay Pacific Group has chosen the (CFM) International (LEAP-1A) engine to power the fleet of 32 Airbus A321neos it has on order. The Pratt & Whitney (PRW) (PW1200G) geared turbofan (GTF) engine is also an option for the A321neo. (CFM), a joint venture between (GE) Aviation and Safran Aircraft Engines, valued the engine order at $1 billion based on list prices.

The A321neos will be operated by Cathay (CAT) regional carrier Cathay Dragon (DRG). The engine order includes a long-term maintenance agreement under which (CFM) will guarantee maintenance costs on a dollar per engine flight hour basis.

Fleet:
(definitions)

Click below for photos:
CAT-747 DATA
CAT-747-200.jpg
CAT-747-200F.jpg
CAT-747-267B-KAI TAK
CAT-747-400BCF
CAT-747-400F
CAT-747-467
CAT-747-467-A
CAT-747-467F - 2011-10
CAT-747-467F-CARGO
CAT-747-8F - 2013-03
CAT-747-8F-2014-05
CAT-777
CAT-777-2008-02-LOW FLYBY
CAT-777-300
CAT-777-300ER
CAT-777-300ER - 2012-06
CAT-777-300ER ONEWORLD-2014-08
CAT-777-300ER-APR08
CAT-A330-200
CAT-A330-200-A
CAT-A330-200-B
CAT-A330-300
CAT-A340-313X-ONEWORLD
CAT-A340-500
CAT-A340-500
CAT-A340-642
CAT-A340-642-A
CAT-A350-900-2010-08

October 2017:

2 747-2L5B (SF) (CF6-50E2) (435-22105, /80 B-HMD; 443-22106, /80 B-HME; 469-22107, /80 B-HMF), EX-(VAR), LST (AHK). CURRENTLY OPS FOR (CAT) CARGO. 22107 WFU AT MOJAVE 2009-04. NOW (CAO) OPS. FREIGHTER.

0 747-230F (CF6-50E2), (SOF) WET-LSD LONG TERM 2000-10, FREIGHTER.

0 747-236F (RB211-524D4) (480-22306, /80 B-HVY), EX-(BAB), (SCD), SCRAPPED AT KEMBLE AIRFIELD 2008-09. FREIGHTER.

3 747-267B (RB211-524C2) (446-21966, /80 B-HIA; 466-22149, /80 B-HIB; 493-22429, /80 B-HIC; 531-22530, /81 B-HID), LST (AID). 22149 PARTED OUT AT KEMBLE 2004-06. (CAO) OPS. FREIGHTER.

2 747-267B (RB211-524D4) (385-21746, /79 B-HKG), LST (VAA). FREIGHTER.

1 747-267B (SF) (RB211-524D4) (596-23120, /84 B-HIH), (CAO) OPS. FREIGHTER.

2 747-267F (RB211-524D4) (687-23864, /87 B-HVZ; 776-24568, /90 B-HVX), (SCD). (CAO) OPS. FREIGHTER.

0 747-367 (RB211-524C2) (615-23221, /85 B-HII, 634-23392, /86 B-HIJ; 659-23534, /86 B-HIK; 671-23709, /87 B-HOL; 690-23920, /87 B-HOM; 709-24215, /88 B-HON), 6 LST (PIA) 1999-04. 45C, 400Y.

2 747-400 (RB211-524), EX-(BAB), RETIRED END OF 2016.

2 +13 ORDERS 747-412 (PW4056) (962-27133, B-HKJ, 2006-12), EX-(SIA), 4 TO BE CONV TO F & OPS BY (CAO).

0 747-412 (PW4056) (923-26548, B-HKD, 2004-07; 1010-27069, B-HKU, 2007-07; 1056-26552, B-HKV), EX-(SIA), RBS AEROSPACE & (BBB) LSD. RETIRED END OF 2016.

3 747-412F (SCD) (PW4056) (859-25127, B-HKE, 2004-10; 860-25128, B-HKF; 1101-26557, B-HKX, 2009-01), EX-(SIA), CONV TO F AT XIAMEN. (CAO) OPS. FREIGHTER.

1 747-412BCF (27217, B-KAI), EX-(SIA), RTS 2010-02 AFTER STORAGE AT VICTORVILLE. (CAO) OPS. FREIGHTER.

2 747-444BCF (RB211-524M) (827-24976, /91; 861-25152, /91 B-HUS), EX-(SAA) FERRIED TO CHINA FOR FREIGHTER CONVERSION 2006-03. 25152; WFU AT VICTORVILLE 2009-01. 24976 RTS 2010-05; 25152; RTS 2010-06. (CAO) OPS. FREIGHTER.

15 747-467 (RB211-524G/H) (705-23814, /89 B-HOO; 728-23815, /89 B-HOP; 771-24631, /90 B-HOR; 788-24850, /90 B-HOS; 813-24851, /90 B-HOT; 834-24925, /91 B-HOU; 849-25082, /91 B-HOV; 873-25211, /91 B-HOW; 877-24955, /91 B-HOX "SPIRIT OF HONG KONG;" 887-25451, /91 B-HOY; 925-25871 /92 B-HOZ; 930-25872, /92 B-HUA; 937-25873, /92 B-HUB; 949-25874, /922 B-HUD; 970-27117, /93 B-HUE; 993-25869, /93 B-HUF; 1007-25870, /93 B-HUG; 1033-27230, /94 B-HUI; 1061-27595, /95 B-HUJ), 24925; CONV TO SF 2005-10. 27230 WFU 2016-10. 24925 WFU 2017-05. 12F, 557C, 322Y.

1 747-467BCF (RB211-524G/H) (24925, B-HOU), RTS 2010-05. (CAO) OPS. FREIGHTER.

6 747-467ERF (PW4062A) (1404-37299, B-LIA, 2008-05; 1408-36867, B-LIB 2008-08; 1413-36868, B-LIC, 2009-01; 1414-36869, B-LID, 2009-03; 1415-36870, B-LIE, 2009-03; 1417-36871, B-LIF, 2009-04), (CAO) OPS. FREIGHTER.

5 747-467F (RB211-524G/H-T) (1020-27175, /94 B-HUH; 1065-27503, /95 B-HUK; 1255-30804, /00 B-HUL; 1271-32571, /01 B-HUO; 1282-3O805, /01 B-HUP). (CAO) OPS. 32571; SOLD TO SILK WAY FOR LEASE TO SKY GATES AIRLINES MOSCOW 2016-10. FREIGHTER.

1 747-467ERF (1404-37299, B-LIA), NEW LIVERY 2016-02. FREIGHTER.

1 747-467F SCD (34150), 2005-02. (CAO) OPS. FREIGHTER.

2 +4/6 ORDERS 747-467BCF (RB211-524G/H) (834-24925, /91 B-HOU); CONV TO SF 2005-10. (925-25871, B-HOZ), CONV 2008-09. SUPER FREIGHTER. (CAO) OPS. FREIGHTER.

13 +1/7 ORDERS 747-867F (GEnx-2B67) (39238, B-LJA, 2011-11; 39239, B-LJB, 2011-11; 39240, B-LJC, 2013-08; 39241, B-LJD, 2011-11; 39242, B-LJE, 2011-10 - - SEE ATTACHED - - "CAT-2011-10 - 747-8F 1ST FLT;" 39245, /12 B-LJH; 43394, B-LJK 2013-12; 43536, B-LJL, 2013-12; 43825, B-LJM, 2013-12), (CAO) OPS. FREIGHTER.

5 +6/11 ORDERS 777-267 (TRENT 877) (1-27116, /94 B-HNL; 14-27265, /95 B-HNA; 18-27266, /96 B-HNB; 28-27263, /96 B-HNC; 31-27264, B-HND). TO BE REPLACED BY A350-900S 2016-02. 45C, 291Y.

1 777-300ER, (ALE) LSD 2012 THROUGH 2022.

14 777-367 (TRENT 892B) (94-27507, /97 B-HNE; 102-27506, /97 B-HNF; 118-27505, /98 B-HNG; 136-27504, /98 B-HNH; 204-27508, /99 B-HNI; 224-27509, /99 B-HNJ; 248-27510, /99 B-HNK; 456-33702, /03 B-HNM; 462-33703, /03 B-HNN; 470-33704, /04 B-HNO, 41763, B-KQW, 2015-03; 41764, B-KQX, 2015-05). 45C, 353Y.

2 777-367ER (TRENT 800) (513-34243, B-HNP, 2005-04; 567-34244, B-BNQ 2006-07). 45C, 353Y.

49 777-367ER (GE90-115BL2) (674-34432, B-KPC, 2007-10; 670-35299, B-KPB, 2007-10; 700-35300, B-KPG, 2008-02; 720-35301, B-KPH, 2008-05; 661-36154, B-KPA, 2007-09; 680-36155, B-KPD, 2007-11; 685-36156, B-KPE, 2007-12; 754-36157, B-KPJ, 2009-01; 783-36158, B-KPK, 2009-05; 818-36161, B-KPL, 2009-10; 692-36832, B-KPF, 2008-01; 835-36159, B-KPM, 2009-12; 839-36165, B-KPN, 2009-12; 843-36160, B-KPO, 2010-01; 860-36162, B-KPQ, 2010-04; 36163, B-KPR, 2010-06; 845-36164, B-KPP, 2010-02; 991-37899, B-KPY, 2012-02; 41430, B-KQK, 2013-12; 41431, B-KQL, 2013-12; 41758, B-KQP, 2014-08; 41762, B-KQQ, 2014-08; 41761, B-KQN, 2014-06; 60723, B-KQZ, 2015-07; 60724, B-HNR, 2015-09), INCL 4 (ILF) LSD. 40C, 32PY, 268Y.

2 777-367ER (GE90-115BL2) (41760, K-KQJ; 42142, B-KQG), (BBB) LSD 2013-08 & 2013-10. 6F, 53C, 238Y.

21 ORDERS (2021-02) 777-9X (GE9X), 400 PAX:

32 ORDERS A321neo (LEAP-1A), TO BE OPERATED BY CATHAY DRAGON (DRG):

22 +11 ORDERS A330-342 (TRENT 772-60) (071, /95 B-HLA; 083, /95 B-HLB; 099, /95 B-HLC; 102, /95 B-HLD; 109, /95 B-HLE; 113, /95 B-HLF; 118, /95 B-HLG; 121, /95 B-HLH; 155, /96 B-HLI; 012, /92 B-HLJ; 017, /92 B-HLK; 244 /98 B-HLL; 915, B-LAH, 2008-04) (565), 44C, 267Y.

17 +8 ORDERS A330-343X (TRENT 772B-60) (386, /01 B-HXM; 389, /01 B-BXN; 393, /01 B-BXO; 418, /01 B-BXP; 420, /01 B-BXQ; 421, /01 B-BXR; 423, /01 B-BXS; 439, /01 B-BXT; 539, /03 B-BXU; 548, /03 B-BXV; 565, /03 B-BXW; 669, /05 B-LAA; 673, /05 B-LAB; 679, /05 B-LAC; 776, /06 B-LAD; 850, /07 B-LAE; 895, /08 B-LAG; 1163, /10 B-LAJ; 1222, /10 B-LAL), 3 (ILF) 6 YR LSD. 44C, 267Y.

3 A330-343E (TRENT 772B-60) (1436, /13 B-LBB, 2013-07 - - SEE PHOTO - - "CAT-2013-07 - 1000 TH A330;" 1443, /13 B-LBC, 2013-10; 1523, B-LBE, 2014-06), 1443; LST (DRG). 44C, 267Y.

5 A340-313X (CFM56-5C4) (136, /96 B-HXA,; 137, /96 B-HXB; 142, /96 B-HXC; 147, /96 B-HXD; 157, /96 B-HXE; 160, /97 B-HXF; 208, /98 B-HXG; 218, /98 B-HXH; 220, /98 B-HXI; 227, /98 B-HXJ; 228 /98 B-HXK); 4 TO BE RETIRED BY END OF 2015. TO BE REPLACED BY A350-900S 2016-02. 157 WFU & STORED AT LOURDES 2016-10. 208, B-HXG; 218, B-HXH; 227, B-HXJ SOLD TO AERFINANCE FOR PARTING OUT AT LOURDES, FRANCE 2017-06. WILL RETIRE ALL BY END OF 2017. 8F, 30C, 205Y.

0 A340-313X (CFM56-5C4) (381, /00 B-HXL), (ILF) LSD, RTND 2011-02, LST (LNK). 8F, 30C, 205Y.

3 A340-313X (CFM56-5C4) (123, /96 B-HXM; 126, /96 B-HXN; 128, /96 B-HX0), EX-(SIA), (TBC) 5 YR LSD, TO BE REPLACED BY A350-900S 2016-02. WILL RETIRE ALL BY END OF 2017. 8F, 30C, 205Y.

0 A340-313X (CFM56-5C4) (192, /97 B-HMX; 199, /97 B-HMY; 201, /97 B-HMZ), (BEJ) 2 YR LSD 1999-11, RTND (BEJ) 2001-10. 12F, 24C, 255Y.

0 A340-642 (TRENT 556) (436, /02 B-HQA; 453, /02 B-HQB; 475, /03 B-HQC), (ILF) LSD, TO BE RTND 2008-06, & LST (HNA). 8F, 60C, 218Y.

17 +5 ORDERS A350-941 (TRENT XWB) (46, B-LRF, 2016-10; 70, B-LRK, 2017-02), AERCAP (DEA) LSD 2016-05, 2016-07 & 2017-02.

26 ORDERS (2018-02) A350-1000 (TRENT XWB):

6 ORDERS A380, (AFIS) LEASED, POSSIBLY INCL F'S.

1 BOMBARDIER LEARJET 45 (TFE731-20R-1B) (152, /01 VH-CXJ), TRAINER/EMS.

Management:
(definitions)

Click below for photos:
CAT-11-JOHN SLOSAR - 2011-05
CAT-11-JOHN SLOSAR - 2012-11-A
CAT-12-IVAN CHU - 2011-05
CAT-13-CHRIS GIBBS - 2011-05
CAT-13-MARK HAYMAN - 2013-10
CAT-14-RICHARD HALL - 2011-05
CAT-15-NICK RHODES - 2011-05
CAT-16-JAMES BARRINGTON - 2011-05
CAT-17-JAMES HUGHES-HALLETT - 2011-05
CAT-18-WILLIAM CHAU - 2011-05
CAT-19-QUINCE CHONG - 2011-05
CAT-2-Simon Large-2L.jpg
CAT-20-RUPERT HOGG - 2011-05
CAT-21-TOMASZ SMACZNY - 2011-05
CAT-3-Mark Sutch-1L-2016-05.jpg
CAT-7-CAPTAIN IAN WILKINSON-2R-2008-02

IVAN CHU, CHAIRMAN JOHN SWIRE & SONS GROUP (2017-05).
Ivan Chu Kwok-leung was Chief Executive Officer (CEO) of Cathay Pacific Airways (CAT) since 2014. Before that, he was Chief Operating Officer (COO) since March 2011. He joined Cathay Pacific (CAT) in 1984 and has worked with the Company in Hong Kong, Mainland China, Taiwan, Thailand and Australia. Prior to his appointment as Director Service Delivery in September 2008, he was General Manager SW Pacific based in Sydney, Australia. He is a Director of Cathay Pacific (CAT) and Hong Kong Dragon Airlines (DRG) Limited, and Chairman of (AHK) Air Hong Kong Limited and Cathay Pacific Catering Services (HK) Limited.

As Chairman of China's John Swire & Sons, Ivan will play a leading role in the Swire Group’s overall Mainland China investment and development strategy.

RUPERT HOGG, CHIEF EXECUTIVE OFFICER (CEO) CATHAY PACIFIC AIRWAYS (CAT) (2017-05).
Rupert was Chief Operating Officer from (2013-11) and before that was Director Sales & Marketing. Prior to taking up that position, he was Director Cargo from 2008 to 2010. Rupert joined John Swire & Sons in 1986, and had held various positions in (CAT) and other Swire group companies.

ALGERNON YAU YING-WAH, (CEO) DRAGONAIR (DRG).
Algernon replaces James Tong.

IAN SAI CHEUNG SHIU, SENIOR DIRECTOR JOHN SWIRE & SONS (UK) (2010-05).
SHIU, Ian Sai Cheung, has been a director of the Company since September 2008. He joined the Company in 1978 and has worked with the Company in Hong Kong, the Netherlands, Singapore and the United Kingdom. He was appointed Director Corporate Development in September 2008 and served as an Executive Director of the Company from October 2008 until June 2010. He is also a Director of John Swire & Sons (HK) Limited and Hong Kong Dragon Airlines (DRG) Limited.

CHRISTOPHER GIBBS, ENGINEERING DIRECTOR (CAT) & DIRECTOR (HAECO).
Christopher Gibbs is currently Engineering Director of Cathay Pacific (CAT). He joined (CAT)'s Engineering Department in 1992 and his previous positions include General Manager Engineering Commercial and General Manager Engineering Technical. Christopher is also a Director of the Hong Kong Aircraft Engineering Company (HAECO) Ltd, Taikoo (Xiamen) Aircraft Engineering Company Limited, Hong Kong Aero Engine Services Ltd (HAESL) and Ground Support Engineering Ltd (GSEL).

MS ANNA THOMPSON, DIRECTOR FLIGHT OPERATIONS (2015-03).
Anna has continued to act as General Manager Aircrew until a successor is found.

CAPTAIN RICHARD HALL, DIRECTOR FLIGHT OPERATIONS (2010-08).
Richard Hall took up the position of Director Flight Operations for Cathay Pacific (CAT) in August 2010 and oversees all aspects of (CAT)'s flight operations. He was General Manager Aircrew from 2008 to 2010, responsible for the safe, effective and efficient deployment of (CAT)'s 2,500 flight crew (FC). Richard has been a Captain with Cathay Pacific (CAT) since 1993.

NICK RHODES, DIRECTOR CARGO (2010-05).
Nick Rhodes was appointed Director Cargo in August 2010 and is responsible for all aspects of the Cathay Pacific Group's cargo business worldwide, including operations, marketing and sales. He has worked with the Group for >28 years, including 7 years in the Flight Operations Department. Prior to taking up his current position, Nick was Director Flight Operations.

PAUL LOO, DIRECTOR CORPORATE DEVELOPMENT (2015-06).

JAMES BARRINGTON, DIRECTOR CORPORATE DEVELOPMENT (2010-07), RESIGNED (2015-06).
James Barrington has been Director Corporate Development since July 2010. He joined the Swire group in 1982 and has worked with the Company in Hong Kong, Malaysia and Canada since 1983. He was appointed Director Sales & Marketing in March 2000. He is a Director of Hong Kong Dragon Airlines (DRG) Limited and (AHK) Air Hong Kong Limited. James later moved to (HAECO) as Group Director Airframe Services.

MARTIN MURRAY, FINANCE DIRECTOR.

DANE CHENG, DIRECTOR SALES & SERVICE (2014-05).

ANDREW HERDMAN, DIRECTOR GROUP PUBLIC AFFAIRS.

WILLIAM CHAU, DIRECTOR PERSONNEL & HUMAN RESOURCES (HR).
William Chau is Director Personnel. He 1st joined Cathay Pacific (CAT) in October 1973 as a Cargo Officer, and has held a number of positions within (CAT) in the areas of cargo, airport services, and personnel.

JAMES TONG, DIRECTOR CORPORATE AFFAIRS (2014-05).

TOMASZ SMACZNY, DIRECTOR INFORMATION MANAGEMENT (2010-08).
Tomasz Smaczny took up the role of Director Information Management in August 2010. His responsibilities include the strategic positioning and delivery of (CAT)'s information management and technology (IT) requirements. Prior to joining (CAT), he had held similar roles with various organizations in the banking and financial services industries in New Zealand and Australia.

SIMON LARGE, DIRECTOR CARGO (2015-06).
Swire Group veteran, Simon Large previously held senior management positions at (CAT), and was General Manager Marketing & Loyalty Programs.

RON MATHISON, DIRECTOR & GENERAL MANAGER CARGO (PACIFIC).

JAMES GINNS, DIRECTOR SERVICE DELIVERY (2014-05).

TOM OWEN, SENIOR VP, AMERICAS, (LOCATED IN SAN FRANCISCO) (2012-09).
Tom Owen has been associated with Cathay Pacific (CAT) for 17 years, and has held several management positions. Most recently, Owen was Chief Operating Officer (COO), Logistics, for Steamships Trading Company Limited in Papua New Guinea, a subsidiary of Cathay (CAT)'s parent company, the Swire Group.

ERIC ODONE, VP SALES & MARKETING AMERICAS.

DENNIS OWEN, VP MARKETING, AMERICAS REGION (2008-11).

STEPHEN WONG, VP SALES, AMERICAS REGION (2008-11).

ANGUS BARCLAY, GENERAL MANAGER EUROPE.

TITUS DIU, GENERAL MANAGER CHINA EX-(DRG) (2015-08).
Mr Diu joined Dragonair (DRG) in 1991 and subsequently held a
number of senior positions with (DRG) in both Hong Kong and Mainland China, including General Manager, Revenue Management & Distribution, General Manager, Hong Kong & Southern China, and Regional Manager, Northern China. Prior to taking up this post, Mr Diu was Chief Operating Officer (COO), Air China Cargo (CAO), a joint venture (JV) cargo carrier between Air China (BEJ) and (CAT) Limited.

Mr Diu graduated from the University of Western Sydney, Australia.

CAPTAIN JOHN MCCORMICK, GENERAL MANAGER FLIGHT
OPERATIONS (HKGOTCX) (john_mccormick@cathaypacific.com).

CAPTAIN PHIL WALKER, GENERAL MANAGER AIR CREW.

CAPTAIN RICK FRY, GENERAL MANAGER FLYING.

MS PATRICIA HWANG, GENERAL MANAGER REVENUE MANAGEMENT.

MARK SUTCH, GENERAL MANAGER CARGO SALES & MARKETING.

CAPTAIN ANDY MADDOX, DEPUTY GENERAL MANAGER FLYING.

CAPTAIN RUSSELL DAVIE, MANAGER LINE FLIGHT OPERATIONS.

CAPTAIN IAN RODWELL, CHIEF PILOT 747-400.

CAPTAIN IAN WILKINSON, CHIEF PILOT 777, SACKED FOR "FLY BY" ON 2008-08 DELIVERY - SEE PHOTO & ARTICLE - "CAT-777-2008-02 LOW FLYBY."

KEITH REYNOLDS, OPERATIONS MANAGER, (CAT) FREIGHTERS.

JEFF OVENS, BIOFUEL MANAGER.

CAPTAIN DAVE ROWE, CHIEF PILOT 747-400F.

CAPTAIN GEOFF DENHAM, CHIEF PILOT 747F.

ALEX MCGOWAN, HEAD OF PRODUCT.

CAPTAIN HENRY CRAIG, MANAGER FLIGHT TRAINING - BOEING.

PETER WIGENS, HEAD CORPORATE SAFETY (HKGOQCX)(peter_wigens@cathaypacific.com).

CHRIS GIBBS, GENERAL MANAGER ENGINEERING COMMERCIAL (2001-10).

STEVE CHADWICK, GENERAL MANAGER ENGINEERING TECHNICAL (2001-10) (HKGMXCX) (steve_chadwick@cathaypacific.com).

CASEY KELLEY, GENERAL MANAGER (CPATL) (1999-12).

KENNY TANG, GENERAL MANAGER CARGO (2000-04).

ANTHONY YEUNG, GENERAL MANAGER INFO MANAGEMENT (2001-10).

TOM OWEN, GENERAL MANAGER REVENUE MANAGEMENT.

RUSS FORTSON, MANAGER PRODUCT DEVELOPMENT.

DENNIS HUI, MANAGER QUALITY ASSURANCE (enqrsw@cathaypacific.com).

NIGEL PARKER, MANAGER LINE MAINTENANCE (1996-07).

ROB WALES, MANAGER MAINTENANCE SUPPORT (HKGMMCX)
(rob_wales@cathaypacific.com).

CRAIG OTTO, AIRCRAFT PROJECT MANAGER

ELVIS HO, MANAGER ENGINEERING PLANNING.

DARRYL CHAN, TECHNICAL SERVICES MANAGER, (HKGGMVCX),
(darryl_chan@cathaypacific.com).

JUN AU, LINE MAINTENANCE MANAGER, EX-(AHK) (2001-07).

GARETH WATKINS, PLANNING MANAGER.

HENRY CHAN, PLANNING PROJECTS MANAGER (2002-06).

MS ANNA CHOI, COUNTRY MANAGER MALAYSIA & BRUNEI.

MS MANUELA ELIA, SAN FRANCISCO STATION MANAGER (2015-03).
Manuela moved from her former position as Airport Station Manager in Chicago. Manuela is now responsible for liaising with local airport authorities and overseeing the ground operations at San Francisco International Airport.


The following are part of HONG KONG AIRCRAFT ENGINEERING COMPANY LTD (HAECO):

DAVID TURNBULL, NON-EXECUTIVE CHAIRMAN OF (HAECO) (2006-01).

CHRISTOPHER GIBBS, DIRECTOR (HAECO) & ENGINEERING DIRECTOR (CAT).
Christopher Gibbs was formerly Engineering Director of Cathay Pacific (CAT). He joined (CAT)'s Engineering Department in 1992 and his previous positions include General Manager Engineering Commercial and General Manager Engineering Technical. Christopher is also a Director of the Hong Kong Aircraft Engineering Company (HAECO) Ltd, Taikoo (Xiamen) Aircraft Engineering Company Limited, Hong Kong Aero Engine Services Ltd (HAESL) and Ground Support Engineering Ltd (GSEL).

CHAN PING KIT, DEPUTY CHAIRMAN & (CEO), HAECO (2001-08).

SUMMIT CHAN, (CEO) (HAECO) XIAMEN (2015-09).

MARK HAYMAN, GROUP DIRECTOR ENGINEERING & OPERATIONS (HAECO) (2013-06) (markhayman@haeco.com).
Mark Hayman joined the Hong Kong Aircraft Engineering Company (HAECO) in October 2001. He has been Executive Director Engineering and on the board of (HAECO) since February 2002, Group Director Operations since June 2011, and now Group Director Engineering & Operations since June 2013. He was previously General Manager Engineering Planning & Technical Supplies of Cathay Pacific Airways (CAT). He joined the Swire group in 1987. He is a licensed aircraft engineer by trade and has an (MBA) from Kellogg.

STEPHEN LAU, DIRECTOR SUPPORT & DEVELOPMENT (HAECO), (2000-12).

KEVIN CARTER, DIRECTOR CABIN SOLUTIONS (HAECO) (2015-09).

IAN RIDDELL, DIRECTOR INFORMATION MANAGEMENT & E-BUSINESS (HAECO) (2001-03).

J BREMNER, DEPUTY DIRECTOR ENGINEERING (HAECO).

GREG HUGHES, DIRECTOR COMPONENTS & ENGINE SERVICES (HAECO) (2015-09).

ANGUS BARCLEY, DIRECTOR & GENERAL MANAGER HONG KONG AERO ENGINE SERVICES (HAECO) (2015-09).

SHUM YUN, GENERAL MANAGER QUALITY & TRAINING (HAECO).

J CHI, GENERAL MANAGER LINE MAINTENANCE (HAECO).

FRED CHAN, GENERAL MANAGER COMPONENT & AVIONICS OVERHAUL (HAECO) (1996-07).

BOBBY LAM, GENERAL MANAGER LINE MAINTENANCE (HAECO),
(bobbylam@haeco.com) (HKGHEHH).

PAUL YU, GENERAL MANAGER MAINTENANCE, (HAECO) (1999-12), (paulyu@haeco.com).

LUTZ WIERSCHIN, GENERAL MANAGER (HAECO) LANDING GEAR SERVICES (2015-09).

N HALLATT, COMMERCIAL MANAGER (CHEP LAP KOK) (HAECO).

PETER HAYES, QUALITY ASSURANCE (QA) MANAGER (HAECO) (1998-07), (pethayes@haeco.com).

DIETER KLEINEN, LINE MAINTENANCE MANAGER, (HAECO), EX-(SAA) (2003-03).

BRIAN TURNER, TECHNICAL SERVICES MANAGER (BASE MAINTENANCE) (HAECO).

K S WONG, MANAGER TECHNICAL SERVICES (HAECO).

W O LEUNG, MANAGER BASE MAINTENANCE (HAECO) (1998-07).

PETER LEE, MANAGER LINE MAINTENANCE HAECO (1998-07).

DAVID MAWDSLEY, MANAGER FLIGHT SAFETY (HAECO).

WILLIAM LEUNG, SUPPORT SERVICES MANAGER (HAECO) (2000-12).

H K LI, INTERIOR MAINTENANCE MANAGER (HAECO).

JOEY HO, PRODUCTION PLANNING & CONTROL MANAGER (BASE MAINTENANCE) (HAECO), EX-AHK (1998-01).

SHEN WAI, BASE MAINTENANCE SUPERINTENDANT (HAECO).

(HAECO AMERICAS):

RICHARD KENDALL, (CEO) (HAECO) AMERICAS (2016-04).

MARK PETERMAN, PRESIDENT (HAECO) AMERICAS CABIN SOLUTIONS (2015-10).

JOSE PEVIDA, SENIOR VP ENGINEERING (HAECO) AMERICAS CABIN SOLUTIONS (2015-10).

DAVID KELLY, VP MARKETING & STRATEGY (HAECO) AMERICAS (2015-10).

 
Top of Page

 

Since you are not logged in, we can show you only live Airtran Airways data. This page will demonstrate the depth of data we have for every airline. Close and View Airtran Airways ›