SMP1Team#413 - Module 1 History and Evolution of Cathay...

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Module 1 History and Evolution of Cathay Pacific Cathay Pacific was founded in Hong Kong in 1946 by an American, Roy C. Farrell and an Australian, Sydney H. de Kantzow. Early passenger flights served Manila, Bangkok, Singapore and Shanghai. In 1948, Butterfield & Swire (currently known as Swire Group) took a 45% share of Cathay Pacific and began management control. Through the 1960’s and 1970’s Cathay Pacific expanded to offer flights to Japan and the United Kingdom. In the 1980’s, an increase in air travel led to expansion into Brisbane, Frankfurt, Vancouver, Amsterdam, Rome, San Francisco, Paris, Zurich and Manchester. The 1990’s were a tough time for airlines, with new low-cost strategies driving prices and profit margins down. Cathay Pacific differentiated itself by offering extremely high levels of service. Additionally, they spent millions of dollars to ensure a modern, “young” fleet of planes loaded with features and a quiet ride. They also changed their corporate image to their current Asian “brushstroke” logo as well as reinforced their support of their home and Hong Kong hub by building a new corporate complex. In 2006, Cathay Pacific expanded by acquiring Dragonair and forming a partnership with Air China. This allowed them to better serve the Chinese market and expand the use of their travel hub in Hong Kong. Cathay Pacific’s biggest strategy change through the years was moving to a premium model, which was a deliberate strategy change. This model was created to break out of the pricing wars that airlines were fighting during the 1990’s. Cathay Pacific decided to target a class of customers who were willing to pay a premium price for the high level of service they could experience on a Cathay Pacific flight. Among Cathay Pacific’s differentiating amenities are freshly prepared gourmet meals, a variety of entertainment options, and communication capabilities with power during flights. They also offer features such as on-line duty-free shopping, which you can pick up when you board, and business and first-class lounges in many airports for an enjoyable and relaxing pre-
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flight experience. Through the years, Cathay Pacific has continued to specialize in long-distance international travel to and from Asia. Today Cathay Pacific operates over 150 aircraft, serving 130 destinations. They continue to invest in their premium model by purchasing new jets and providing state-of-the-art cabin designs. Cathay Pacific has diversified its business with a less known cargo service and a partnership with DHL to offer overnight deliveries. They are investing in this side of their business by increasing their cargo plane fleet and building a state-of-the-art cargo terminal in Hong Kong, which should
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This note was uploaded on 03/07/2012 for the course MAN 6637 taught by Professor Kraft during the Spring '12 term at University of Florida.

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SMP1Team#413 - Module 1 History and Evolution of Cathay...

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