Once it was the greatest airline in the world, a peer of near perfection in a world where service was on the decline. Changing travel patterns and competition have hammered a once great airline and its recent loses triggered a 50% fall in its share price. That fall has led to the Hong Kong Hang Seng stock exchange index removing Cathay Pacific as a a leading share and one of the watched stocks that drives the index, one of the worlds most respected and observed.
It’s a humiliating downfall for Cathay in an environment where saving face and respect means far more than just money.
The passenger airline business in the Middle and Far East is undergoing an extraordinary change at a staggering pace. Budget airlines are hammering the traditional legacy airlines and they’re all struggling to cope. ANA and Korean are little better with ANA seeing horrendous falls in domestic market share, Korean seeing almost a half billion US dollar loss, yet there is one place they’re all doing well.
Cargo is booming. After years of losses, cut backs and over capacity, cargo is soaring in the Far East, and almost as much in the West, but analysts warn the boom will be short-lived if airlines buy in capacity to deal with the short to medium term and don’t stick to their guns – and their prices.
With cargo the only thing holding up Cathay Pacific’s finances, along with several other carriers, Cargo policy and practice will need to be cast iron if its to keep that way.