Cathay Pacific to boost capacity to Australia with larger aircraft

Cathay Pacific flight CX105, operated by Airbus A350-900 B-LRI arrives in Melbourne. (Cathay Pacific)
Cathay Pacific operates Airbus A350-900s to Brisbane, Melbourne and Perth. (Cathay Pacific)

Cathay Pacific plans to grow its presence in Australia with larger aircraft, including potentially the Airbus A350-1000, as it works within the available traffic rights for Hong Kong-based airlines.

The oneworld alliance member operates the maximum allowable number of 70 flights a week for Hong Kong flag carriers to Australia’s four major gateways of Brisbane, Melbourne, Perth and Sydney under the current bilateral air services agreement between the two countries.

As a result, Cathay Pacific has sought to expand in Australia through upgauging to larger equipment, which in recent times has meant swapping out 251-seat Airbus A330-300s with either 280-seat A350-900s or three-class, 340-seat Boeing 777-300ERs.

Cathay Pacific general manager for South West Pacific Rakesh Raicar said the use of larger aircraft has allowed the airline to add capacity without mounting extra flights.

“We have got allocations for 70 flights per week within the four big cities and we have completely utilised that,” Raicar told reporters in Sydney on Thursday.

“We are very happy with the arrangement that we have right now in South West Pacific.”

Its nonstop flights to Cairns and Adelaide do not count towards the cap.

Cathay Pacific will have yet another aircraft option for the Australian market later this year when it takes delivery of its first A350-1000, which has 334 seats.

While the airline announced the inaugural route for the three-class A350-1000 would be Hong Kong-Washington DC – which at 7,085nm would be the longest flight by distance in its network – starting in September, Raicar said Sydney was under consideration as a potential future destination for the next-generation widebody.

Currently, Cathay’s four daily flights between Hong Kong and Sydney is split between three 777-300ER services and one A330-300 rotation.

“That one flight we are still operating with the A330, I don’t need to make any guesses what the planning could be for 2018,” Raicar said.

“It’s not confirmed, but I would say that’s an ideal candidate for an A350-1000, so Sydney might see an A350-1000 this year.

“It is in the planning stage. We are very gung-ho about it.”

Melbourne too looks set for a capacity boost as a 777-300ER potentially replaces the A330-300 on one of Cathay’s three daily flights. (The other two daily flights are operated by A350-900s.)

Eventually, all A330-300 services to Australia were likely to be upgauged to either the 777-300ER, A350-900 or A350-1000.

“That’s the plan for South West Pacific,” Raicar said.

“In that sense we are well covered for 2018 and 2019 as we speak.”

Cathay Pacific began A350-900 service in May 2016 and currently has 22 of the type, with four more on the way. Meanwhile, the airline has 20 A350-1000s on order, with deliveries starting later in 2018 and running through to 2021.

Airbus said it late January it would bring the largest variant of its A350 family to Sydney and Auckland as part of a demonstration tour across the Asia-Pacific and Middle East.

The aircraft, A350-1000, MSN065 F-WLXV, is due to reach Sydney following its appearance at the Singapore Airshow, where it will be on static display from February 6 to 8.

It will also stop in Auckland after Sydney.

Airbus A350-1000 MSN065 is welcomed to Doha. (Qatar Airways)
Airbus A350-1000 MSN065 in Doha as part of its demonstration tour. (Qatar Airways)

Cathay Pacific is currently working through a transformation, or cost-cutting drive, as part of efforts to turn around a first half loss for calendar 2017.

The Hong Kong-based airline, and others, have battled the rapid international expansion of Chinese airlines and the ongoing rise of Middle East carriers offering long-haul to long-haul connections through their hubs, which have bitten into previously lucrative markets.

In particular, the rapid growth of Chinese carriers on international routes has reduced the number of passengers from China transiting through Cathay Pacific’s Hong Kong hub.

And at the budget end, Asian-based low-cost carriers have won passengers happy to pay lower fares for a no-frills product on short- and medium-haul routes.

Further, the recent economic jitters – both in China and elsewhere – had led to a significant reduction in premium corporate travel in business and first class, particularly on long-haul routes.

Under chief executive Rupert Hogg, Cathay Pacific has sought to regain lost ground through an overhaul that included a reorganisation of the business, hundreds of staff layoffs and other cost reduction efforts.

Raicar described 2017 as a difficult year as those at the airline worked to return the airline to profitability.

However, he said things were looking up, noting Cathay was growing its network to new destinations in 2018 including Brussels, Copenhagen, Dublin, Naning and A350-1000 launch destination Washington DC.

Cathay Pacific also started seasonal flights to Christchurch in December 2017.

“We are hoping to see light at the end of the tunnel by 2019,” Raicar said.

Comments

  1. deano says

    Capacity maxed out at Sydney
    Perhaps we will see another airline looking to run a “tag” flight to Canberra via Sydney…..

  2. Q says

    Canberra has been rumored now since the start of January. Apparently it will start in Q3 with a A350-900. Didnt mention frequency or the routing ( direct or tag with another city). (source cx secerts)

  3. Jack says

    CX Secrets is not a source of any calibre, it’s an anonymous Facebook page where CX employees post all manner of gripes and galley gossip and other nonsense. Seriously, you need to learn to discern what’s a reliable source and what’s #fakenews of the lowest calibre.

  4. Paule says

    So what’s going to happen first: Hong Kong’s third runway, a renegotiated agreement between Australia and HK SAR or Cathay realising they actually need A380’s? Hong Kong is more than a hub – it is actually a destination in itself – that’s what will sustain Cathay Pacific.

  5. Q says

    @Jack yes that is true but they have leaked alot of stuff before eg washington dc and changes to inflight services. So while i get your point i still believe their is a chance of the rumor coming true for cbr

  6. Hutch says

    @Jarden Qatar is maxed out to the 4 largest cities too. They are able to add an extra flight to Sydney by including Canberra.

    Similar provisions are available to Cathay and this is why, I understand, they do a BNE-CNS-HKG triangular routing.

    @Jack probably not best to quote a certain President to support your position. Nonetheless, whilst I’ll take CX secrets with scepticism, they do get it right sometimes. I note for example, that during the same rumour of Canberra, was a rumour of Cape Town… Cape Town has since been announced.

  7. Shane says

    If there are no more slots available to many destinations, the only option is to bring in the bigger beasts. Did the A380 peak too early (if you call it a peak!)

    No wonder they are slowing production to keep the line open longer.

  8. random says

    Hong Kong – Townsville – Canberra would work. Canberra to Townsville currently unserviced so why not tag via that routing?

  9. Q says

    @random Hong Kong- townsville – canberra wouldn’t work for cx since they cant carry passengers between canberra and townsville and townsville isnt a big developed market for international traffic. I can see Canberra – Cairns – Hong kong happening to detag Brisbane or Canberra- Sydney – Hong kong just to get extra access into Sydney ( like what Qatars doing). Either way we wont know until a announcement is made (or the rumer turned out being false and notting happens).

  10. Hutch says

    @Nick pretty much the stock standard response in these circumstances. Even if they were looking at it, they wouldn’t be saying so until it is confirmed.

    I’m certainly not saying they will fly to Canberra. I am saying that they have used their existing traffic rights to the big 4 airports and will soon run out of the ability to purely upsize their aircraft using existing fleet. They will either need to explore regional port tags or buy bigger airplanes.

    They may get additional rights in the future, but I understand that may not happen until the 3rd hkg runway is finished and hkg is able to give Australian airlines more landing slots in exchange.

    @random Townsville to Canberra makes no sense. Cathay will not have rights to take purely domestic traffic, so it being unserved makes no difference. The point of servicing a ‘regional’ port, is to gain additional access to a big 4 airport. Townsville – Brisbane would be more logical. For extra capacity into SYD/MEL, either CBR/ADL seems logical. There are other options of course.

  11. Jarden says

    Cathay are already maxed out with the tag flights through BNE. They can’t add anymore frequencies to the big four. Only way is to up gauge the aircraft operating the existing services which is what they are doing.

  12. Hutch says

    @Jarden
    Interesting that you say that as I certainly am not aware that there are limitations on tag flights. Would be interested to read more on that.

  13. Arkair says

    Unfortunately the biggest problem for Cathay is the congestion at their home base in Hong Kong.
    This will continue until 3rd runway is finished. Slots aren’t available to allow new services. Look at the hassle Virgin had in getting sslots for one daily service. They do badly need bigger aircraft for Sydney and Melbourne. Can’t see Canberra getting flights til slots become available in Hong Kong

  14. Arbeysix says

    @Arkair not completely clear what is the basis for your statement that CX “badly need bigger aircraft for Sydney and Melbourne”. I don’t believe this is support by load data (which shows healthy loads but not I believe chronic undercapacity especially since both SYD and MEL have been upgauged to 350/777). I myself take CX MEL-HKG roughly every 3 weeks and my personal experience supports the load data I have seen, at least on this route. Also we should not mistake loads for yield and CX is certainly not in the business of adding capacity for its own sake.