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MGMT 4210 L2 Group 208Group Members: CHAN Cheuk Yau Charis, CHEUNG Ying Ying, LI Sai Hung, LOO BrandonDominic, REN Tianxiang BackgroundFound in 1946, Cathay Pacific Airways (Cathay Pacific) is a flag carrier of Hong Kong offering air transport services to over 110 destinations around the world. With a vision to be the world’s best airline, they are committed to providing the highest quality services to customers. In2006, in light of rapid growing Mainland China market, cost synergy and increasingly competitive aviation market, Cathay Pacific acquired Dragon Airline who was rebranded as Cathay Dragon to gain additional assess to Mainland China. While Cathay Pacific’s network covers destinations worldwide, Cathay Dragon focuses on providing short-distance flights acrossthe Asia-Pacific region, especially mainland China providing 400 flights a week to mainland China.Cathay Pacific is majority owned by logistics corporation Swire Pacific, while state-owned Air China has a 30 percent stake in Cathay. In November 2017, Qatar Airways acquired a 9.6 percent stake in Cathay for HK $5.16 billion, making it Cathay’s third-largest shareholder after Swire and Air China. Pressured by low-cost regional rivals, Cathay reported a consecutive annual loss of HK$1259 million in 2017. AnalysisPESTEL analysis Economic – Growing demand particularly from developing marketAs the global economic growth is expected to continue, air traffic demand keeps increasing. Economic growth without the doubt is the primary driver of air traffic demand because of the growing demand for global connectivity and business activates across the region. IMF estimatedthe growth of the emerging market and development economies, advanced economies and the world are 4.8%, 1.5% and 3.6% respectively. With these forecasts, the International Air Transport Association (IATA) expected the number of air travelers grows at a 6% average Compound Annual Growth Rate (CAGR) and the Asia-Pacific region will be the biggest driver of demand in the its 20-Year Air Passenger Forecast. Social & Ecological:-Higher awareness for carbon emission, passengers care about carbon footprintTechnological:-More advanced technology in fuel efficiency (better engines) and aircraft facilities (better planes: in terms of capacity)Firm’s industry:-Low barrier to enter -Intense competition in both budget carriers & legacy carriers (seems irrelevant to issues) 2. SWOT Strengths:The strengths of Cathay Pacific include a well established brand name. Founded in 1946, Cathay Pacific has a long history of over 70 years. Its brand name is well recognised in
the industry and by customers. Over the years, Cathay Pacific has established a satisfied customer base by delivering exceptional customer service and experiences. Leading to significant brand loyalty.