Challenges That Cathay Pacific Airways Faces

Challenges that mainland China peaceful Airways faces With the integration of Dragonair into chinawargon peaceable Airways in 2006, its influence over the domain of aviation has extensively elevated. From 2006 to 2007, the turnover of mainland China peaceful Airways has raised from HK$60,793 billion to HK$ 75,364 million with a percentage increase of 24. 0% . Nevertheless, there be internal and external challenges actual as obstacles to its future day development, such as jab conflicts, global financial crisis, high big(p) toll and emergence of low- damage airlines,.In this essay, the latter two issues with be examined at length in terms of causes, effects and possible solutions. According to Mr. James Tien Pei-Chun, the chairman of Hong Kong tourism Board, the rising cover prices increase the capital cost of global aviation industry, triggering difficulties in operation . In the first-half of 2008, the average price of aviation kindle that Cathay peaceable Airways paid was 60% higher than that in the first-half of 2007 . It is patent that the high capital cost is predominately attributed from endless high-priced air supply which detrimentally influences Cathay pacific Airways on the whole.On 2nd July 2008, a pull ahead warning announcement was submitted by Cathay Pacific Airways to Hong Kong Exchanges and Clearing Limited. It stated that high-priced aviation provide posing a significant and adverse daze on financial performance of Cathay Pacific Airways. Effective strategies of reduce the usage and wastage of fuels ar imperative and prominent to offset the impact of high-priced oil for the interest of survival of business. To increase cost effectivity in the short-run, Cathay Pacific Airways has newly follow redeployment on charges according to capacity.Owing to the significant demand, 8 flights ar provided to Australia in addition and bigger aircrafts were utilize for 14 European countries. Besides, the number of flights of apprecia ble gross potential to the Middle East like Dubai and Bahrain is increase by 4 per week, whereas 10 flights to North American are cut down. For sustainable and profit-maximizing development, targeted solutions of tumefy reducing the wastage of fuel in the long-run are of paramount importance. It is worth noting that the fish of aircrafts determines the amount of fuel consumption.Therefore, an other(a) initiative is to reduce the weight of aircrafts by technological repairment on externalises. For examples, minimizing protrusions around the aircraft fuselage, enhancing the design of air conditioning air-in-takes and installing large light wing fairings. Cumulatively, higher wing efficiency and smooth-textured airflow are resulted. Stripping the paint of aircrafts is in addition a direct way to reduce the weight . In the light of CSR report 2006 of Cathay Pacific Airways, it is expected to save 2,730 tonnes of fuel each(prenominal) stratum approximately.In addition to the we ight of aircrafts, air traffic over-crowding and regional air traffic control restrictions send away a substantial wastage of fuel which is 12% of do fuel consumption . In order to improve the air traffic control system, Cathay Pacific Airways work collaboratively with other airline companies and regulatory agencies to attain for opening of flexible entry or start points into Russian and Chinese airspace and adoption of flexible, fuel-optimized flight paths according to wind variability.According to the expectation of Cathay Pacific Airways, an estimated 32,000 tonnes of fuel can be saved each year. Consequently, the capital cost can be reduced. apart(predicate) from these, a number of low-cost airlines have emerged in recent years such as Hong Kong pull and Hong Kong Airlines . Facing the threat of new competitors, Cathay Pacific Airways emphasized the high-quality service with well-trained employees and introduced various strategies to attract customers.To call forth the se rvice standard, it provides new arrival lounge at the Hong Kong International Airport with high-quality catering service, well-equipped shower suites computers with meshwork access. Meanwhile, in order to attract customers to travel during flow rate economic downturn, World Pass with flight drop and a variety of choices on destinations is offered. Apart from these, supernumerary fares to senior citizens with a discount of 25% are offered to the elderly .Not only would this help to attract customers, this improves the throw of Cathay Pacific in terms of corporal Social Responsibility which plays a fundamental utilisation in retaining loyal customers. Building a lifelong and friendly relationship with customers is beneficial to maintain constant market share.. To conclude, it is obvious that the fast-changing external environment with numerous unknown factors poses threats to the growth of Cathay Pacific Airways.High capital cost caused by high-priced aviation fuel and entry o f low-cost airlines in the market are expected to be the major challenges faced by Cathay Pacific Airways in foreseeable future which lead to far-reaching influence on the revenue. Among those solutions stated, alliance with other airline companies to technically improve the design of aircrafts and reminder the air traffic system as well as developing lifelong relationship with customers are the most effective strategies to address the problems in the long-term. (786 words) References