Cathay Pacific in Profile

Thus commenced an era of growth cemented on strong corporate foundations that would see the fledgling Hong Kong-based carrier expand into modern aircraft, terminals and maintenance facilities. In 1949 Cathay acquired its first DC-4, in 1955 its first DC-6 and in 1959 its first Lockheed Electra. This was the first turbine-powered aircraft operated by Cathay and its relatively high cruising speed allowed the expansion of the route network to again include ports as far afield as Sydney, Calcutta and Tokyo.

Dramatic changes were taking place in the industry at this time and to meet them Cathay ordered its first jetliner, the Convair CV880, in 1961. The first of eventually eight cacao jets entered CX service the following year and immediately proved an immense hit with both crews and passengers alike. Historically the Convair jet will always be known by those who flew her as one of the finest aeronautical engineering achievements of the period. The CV880, though a gas guzzler in the extreme, was a delight to fly and was built more to military specifications in terms of design integrity and handling qualities. The Convairs soldiered on successfully for more than a decade only to be economically eliminated with the onset of the 1973 oil shock. A price rise of more than a thousand per cent for jet fuel in less than a year was too much for the 880 which seated around 50% fewer passengers than the 707 but actually had a similar fuel burn! Cathay had again moved with the times and had ordered their first Boeing 707-320B in 1970 for an eventual fleet which was to number twelve aircraft and provide the backbone of the CX long haul fleet through the turbulent seventies.

Right through this era the Hong Kong-based carrier remained largely profitable. Basic operating philosophy was to maintain a fleet of the most technically advanced aircraft as was possible while ensuring that growth was only into guaranteed profitable markets. Not being able to afford the luxury of state backing and operating deficits, Cathay Pacific remained restrained in its overall market expansion approach preferring to specialise in servicing Hong Kong to the world in a manner unmatched by any competitive airline.

Growth through the sixties had averaged around 20% per annum, with the onset of the mid-seventies recession and continuing oil shocks this dropped to around 10% though still comfortably exceeded the international average. Such growth required the introduction of wide-bodied equipment to augment the expanding 707 fleet. After long deliberation, Cathay chose the Lockheed L1011 Tristar, an aircraft of almost twice the capacity of the 707 but also able to uplift a considerable relative freight load. The introduction of the Tristars allowed Cathay to further expand its route structure to Australia, throughout Asia and the Middle East. It was only a matter of time before the British-owned carrier would serve the UK and Europe in addition to North America in the west.

That time came in 1979 when Cathay acquired its first Boeing 747-200B. The 747 meant that Cathay could now operate the very long haul routes that it was unable to serve with the medium-range Tristar. Services to London commenced in 1980 and to Vancouver in 1983. Today the airline serves 26 cities in 19 countries with more than 400 flights a week. Indeed a far cry from that first flight back in 1946 in a war surplus Dakota.

The flagship of the modern CX fleet is of course the Boeing 747.

Cathay operates three versions of this excellent jetliner – 8 -200Bs, 1 -200F and 1 -300EUD. An additional -300EUD is on order for delivery in April next year and a third example is optioned for delivery one year later. The -200Bs are configured for 412 passengers while the new -300EUDs accommodate 420 passengers in First, Business and Economy Class layout. All the new -300EUDs are powered by 53,000lb thrust Rolls Royce RB211-524D4 engines while five of the older -200s are powered by the 51,5001b B2/C2 engines. The newer engine gives substantially more thrust at maximum power in addition to a noticeable reduction in fuel burn, indeed it is this engine that now allows Cathay to operate its ultra-long haul Hong Kong to London and Vancouver services that nowadays are the jewels in its network crown.

Cathay hope to continue to acquire additional 747s as the market requires and on present estimates will add a new aircraft to its fleet each year up to around 1990. In addition to the nine-passenger 747s, Cathay operates a 747 Freighter. This aircraft was purchased second-hand from British Airways in 1982 and operates in conjunction with Lufthansa a Hong Kong/Bahrain/ Frankfurt service. Response to the marketing possibilities opened up by the Freighter is such that CX is recording increases of up to 20% in its freight uplift each year, a second such aircraft could be acquired if growth continues at current levels.

Cathay’s other jetliner is the Lockheed L1011-200 Tristar. Nine Tristars are used primarily in support of regional Asian routes and all have been progressively upgraded since 1975 with more powerful Rolls Royce RB211-524C2 engines of 48,000lb thrust. One Tristar was to have been disposed of with the introduction of Cathay’s first 747-300EUD in June but due to the strong growth achieved over the past eighteen months the carrier has decided to keep its Tristar fleet at the present level. Each Tristar is configured for 286 passengers, 14 in First, 60 in Business Class and 212 in Economy. The carrier, like most Tristar operators, is extremely happy with the type and does not intend to replace them till at least 1995. Due to their regional application, the Tristars fly a mere 7 hours a day as against 12 for the longer ranging Boeing 747s.

When writing about the 747s it is difficult not to pass some comment on the ultra-long haul that that type now operates nonstop to London. This is a truly unique service in that it overflies the USSR for more than five hours in addition to passing over nine other countries on its 6,262 nautical mile odyssey. This, for the sake of comparison, is around 250nm less than the Qantas/ PanAm 747SP Sydney/Los Angeles run and around 400nm more than a direct track from Heathrow to Singapore as operated by Singapore Airlines and ultimately by Qantas. What does make the CX run differently though is that often the aircraft is payload limited out of Hong Kong, which by any yardstick is not an ideal port from which to embark upon an ultra-long-range sector. Kai Tak’s single runway could always be longer; in summer the temperatures are high and if the wind is from the wrong direction then an immediate hard climbout over the hills and suburbia of Hong Kong necessitates nothing less than every available ounce of power from those four turbofans.

Australian Aviation was fortunate to undertake one of these flights to see first-hand what was involved on such a long-haul mission. Cathay presently has three of its -200Bs using the more powerful D4 engines in addition to the new -300EUD, these four aircraft operate this sector as the lesser thrust aircraft simply cannot uplift sufficient fuel to feed their thirstier engines for the distance involved. General improvement in fuel burn per flight hour at cruise is in the region of 8% for the newer engines which additionally have the advantage of being more powerful. This equation of fuel consumption to power developed is interesting as each successive model of engine burns less fuel while producing more thrust and generally with enhanced reliability and longer periods between major overhauls.

For the London non-stop Cathay use the -200s full 833,000lb max takeoff weight capability with absolute maximum fuel capacity. In summer the carrier still uplifts its maximum available passenger load while offloading freight as the situation requires. Again another problem due to the heat is the effect of fuel expansion at Hong Kong which can limit the 747 to only 160 tonnes instead of the 164 it could typically take on in a cooler environment.

The flight departs Hong Kong and heads southwest over China passing close to the North Vietnamese border region on its course towards Burma and Calcutta before vectoring across northern India to pass south of Delhi and onwards to Pakistan. The flight then heads northwest to cross into Afghanistan and ultimately the USSR to pass south of Moscow before heading west towards the Baltic Sea, across Denmark, Belgium and eventually into Gatwick. It is interesting to note that if the flight followed the Great Circle route its distance would be only 5,200nm or 1,037nm less than it actually is. The flight cannot follow this routing though as both the PRC and the USSR forbid aircraft to enter their airspace from either country without first approaching from a ‘neutral’ nation. This is why Cathay Pacific have to vector south of Nepal across northern India, Pakistan and through Afghanistan before entering Soviet airspace. Usually, the flight is given a Soviet air defence recognition number while Cathay, like most Western carriers, nowadays flies most night-time sectors displaying full logo lighting as an added precaution against visual misidentification.

After takeoff the 747 climbs to 29,500ft. an altitude it will hold till it burns off sufficient fuel to continue slowly to its projected maximum cuise altitude of 40,000ft. The effects of altitude and weight are indeed telling in terms of fuel consumption. Departing at maximum weight and generally limited to below 30,000ft, the 747 will gulp 14,200kg of fuel per hour in comparison to the latter stages of the flight at say 39,000ft and more than a hundred tonnes lighter where fuel burn will be more like 8,500kg per hour! Other interesting aspects of fuel conservation revolve around cruise altitude and speed. For every 3,000ft below its best cruise altitude, the aircraft burns an additional 2% fuel while fuel consumption increases by 4% if the aircraft cruises at Mach 0. 860 instead of the optimum of 0. 835 – a difference of a bare 15kts in a cruise speed of about 550mph!

The flight to London generally takes between 12 and 13 hours depending upon the headwind component while the reverse sector usually enjoys a time saving due to the effect of tailwind. In true workhorse form, the Boeing is turned around in about 3 hours at Gatwick for its return flight. For a period of 29 hours, the Boeing will be airborne for around 26 hours providing transport from one side of the world to the other for over 800 passengers and many tonnes of freight.

Load factors on the exclusive non-stop service are very high. Indeed for 1984 the entire airline averaged a revenue load factor of 70% as against 68% in 1983. For 1984 CX also recorded a growth of 15. 3% in capacity tonne miles while passenger growth was an exceptional 16. 6%.

Cathay Pacific is more than just an airline though. As a part of the bustling, and very successful Swire Group, it encompasses a number of aeronautical offshoots that work as a team to support the airline and its operations. One of these is HAECO or Hong Kong Aircraft Engineering Company Ltd.

HAECO was established in 1950 to undertake maintenance on the Cathay fleet. Needless to say it grew rapidly as it was soon discovered that following the ravages of World War II it was one of the few well-equipped engineering workshops in the East. Indeed Australia, India and west coast USA presented the nearest competitive maintenance support bases of any repute and so HAECO was able to utilise its unique geographical position to best advantage. Today HAECO employs over 4,000 people while 1984 turnover topped $A115m.

HAECO competitively bids for all Cathay Pacific work (which provides HAECO with 40% of its workload) and wins this on the open market, albeit with the advantages of being on home base with a strong existing customer rapport. Further afield though HAECO is the largest major heavy engineering and aeronautical maintenance base in all South East Asia with regular work being performed for Air Lanka, NASA, CAAC, British Army and RAF, MAS, Lufthansa, SIA, Philippine Air Force, Northwest Airlines, Wardair and British Airways. Indeed, HAECO painted all 28 BA 747s in their new livery in addition to fitting new sidewalls and Heath Techno overhead bins in record time. The organisation is able to conduct all heavy maintenance on most existing jet aircraft and provided technical back-up for more than 27,000 movements during 1984 by 50-plus airlines serving Hong Kong as well as some 4 million manhours of maintenance and overhaul support for customers worldwide.

HAECO today though is on the verge of another great leap forward thanks to the emergence of the People’s Republic of China becoming a future aviation megastar. To take best advantage of this opportunity HAECO formed an associate company, South China Aero Technology Ltd (SCAT) to further links between the British Crown Colony of Hong Kong and the PRC. Obviously, the benefits to both are immense in that SCAT stands to gain much from the overload of expertise required by the rapidly expanding aviation needs of China while China on the other hand probably communicates better in practical terms with its Hong Kong cousins than it does with any other ‘foreigner’.

SCAT and HAECO, from which SCAT derives most of its workforce on various terms of secondment, are already launching aggressively into a major re-engineering programme of the Yun-7 and Yun-12 aircraft on behalf of China Aero Technology Import & Export Corp (CATIC) which is the primary overseeing body of all aeronautical endeavours in the PRC. The Yun-7 is basically a Chinese copy of the trusty Antonov AN-24, a basic equivalent to the Fokker Friendship, while the smaller Yun-12 is a 17 seat twin turboprop aircraft that looks rather like a streamlined Nomad with the overall dimensions of a Twin Otter.

For their part SCAT and HAECO have undertaken to perform an extensive re-design of the Yun-7. A prototype aircraft is presently being flight tested while if successful, the programme could see upwards of a hundred or more Mkll Yun-7s being built by SCAT, probably in China due to the lack of space in Hong Kong. The modifications to the basic Yun-7, of which China has around three dozen in CAAC service, include a new environmental system, APU, new avionics, autopilot, interior, sound reduction panels and a new communications package. The type could also, at a later date, be re-engined with more fuel-efficient engines in the PW124 class. The smaller Yun-12 is an indigenous STOL design of which China has already built two dozen. SCAT input into this aircraft is minimal, primarily in the area of a mild avionics and air conditioning upgrade though at a later date the type also could be re-engined with Pratt & Whitney PW100 class engines.

SCAT indeed represents the future for Cathay Pacific. The year 1997 means many things to many people in Hong Kong these days but for certain it will mean a new ball game for this most successful airline as it will be ultimately forced to abandon its traditional British links. In the new mood of deregulation with a commercially emerging China there are now strong pressures being felt by Cathay Pacific from a number of upstart airlines prepared to challenge the established carrier in the years ahead. Dragon Air, Air Hong Kong and more recently Caledonian Far East Airways (which is heavily backed by British Caledonian) have all filed for operation with Hong Kong as their base.

The primary difference between the origins of the new upstarts and CX is that most of the upstarts are totally Chinese financed and controlled whereas Cathay Pacific is 70. 6% owned by the Swire Group (UK based) and 29. 4% owned by the Hong Kong & Shanghai Banking Corporation. Though Cathay has a few token frequencies each week to Shanghai it feels that it has little realistic likelihood of gaining true domestic status with the PRC under the guidelines laid down for the coming decade by the PRC and CAAC. In this event then it might well be likely that as the deadline rolls closer, emerging carriers such as Dragon Air (which is backed by some of the wealthiest Chinese trading houses in the Colony) might purchase the majority shareholding of the British Swire Group to ensure total Chinese control of the carrier.

In 1985 this is perhaps scenario building at best though one thing for certain is that whatever happens, Cathay Pacific will always be one of the most successful airlines in the business.