Cathay Pacific SWOT Analysis
Problems faced by the Cathay Pacific
- Too much competitors
In 2013, Hong Kong government allowed 4 airline operations in Hong Kong, including Cathay Pacific, Dragon air is under Swire Group Cathay Pacific and they will share flight code.
Cathay Pacific is facing much more competitors now, such as Jet Star, Air Asia. Jet Star application operation point at Hong Kong 2013. Jet Star, Air Asia provided low-cost flight service. Some of the flight routes are facing to strong competition, such as Hong Kong to Shanghai, it is over 8 airline is running.
Moreover, there are so much competitor to the Cathay Pacific on the flight routes, they are including Spring Airlines, Auspicious air, Shanghai Airlines, Eastern Airlines, Hong Kong Airlines, China Southern Airlines,, China Airlines. That will directly lower Cathay Pacific’s market share. - Reputation problem
Two years ago, there is a breaking bad news leaked, it is about the pilots and flight attendant that they have some sexual activities in the aircraft. When the photo is leak from the internet, every people were feeling disappointing to Cathay Pacific, and may loss of the confidence to Cathay Pacific. This problem is huge, because reputation is easy to break but very hard to develop. Therefore, Cathay Pacific has to do some promotion on the reputation specifically.
Strength
Strong financial support: Cathay Pacific’s major shareholders are Swire Pacific and Air China, so Cathay Pacific definitely has enough capital to run or extends the business.
Have many flight routes: After Cathay Pacific joined join the ONEWORLD, it can have so many international flight routes.
Long History and good reputation: Cathay Pacific established since 1946, everybody knows Cathay Pacific. Also, the overall performance always is the best in Hong Kong, such a price, service, number of airplane, etc.
A Huge group of the airplane: Cathay Pacific has 112 aircrafts in service and orders 70 aircrafts.
Weakness
The labour riots: Recent year, the flight attendant and other labours in Cathay Pacific always complain the heavy workload and the working hour, it will affect the team atmosphere.
High running cost: The wages and fuel expense long time stay in the high level, and they are very difficult to solve.
Opportunity:
China Market: Relaxtion of Chinese policy on the outside flag carrier, Cathay Pacific can open new routein China.
Better economic growth: In Asian and Hong Kong, the economic grows very quick, so much people look for the luxury flight, so Cathay Pacific could take these chances to set up some luxury flight for the business tourism, the net benefit would be very high
Relatively better location: Hong Kong is an airline hub, the airport is very busy and this important over all in the worldairport , so Cathay Pacific takes so many advantages of that point.
Threats:
The rise of fuel cost: The fuel cost is the always biggest problem to the Cathay Pacific because it cannot be controlled and it will directly affect the flight cost. Nowsday, the world all airways facing to the same problem -- lack of energy, so the cost of fuel would keep increasing.
Competitors’ pricing strategy: There are so many direct competitors, such as Oasis, Orinteal and Virgin Blue, some of them provide very economic flight price, that would attract Cathay Pacific’s potential customers and current customers
Recently, the LCC airways popular in Asian, LCC airways is refer the airways use lower price strategy to attack other airways, Increase the market share. They can use fast speed to increase the market share.
There are many competitors and its airfare is not competitive. I usually fly with Singapore Airlines instead of Cathay Pacific between HK and San Francisco, as Singapore Airlines provides cheaper air tickets most of the time. The mileage program of Singapore Airlines is more rewarding.
Thanks for your sharing! Yes, Cathy Pacific is really going down. I think the competitor problem should not be counted as you know, there are always competitor around, but if you are doing good, that's nothing. But I do think the reputation problem is truth, and not only reputation, which is the qulity of service is really going down frim Cathy Pacific. No matter food, customer service against the ticket sales, etc.
I used to travel only with cathay pacific when i was young, they were the top three best airline company for numerous reasons back then. The service was really world class back then. But ever since they started to hedge against the oil price and the emergence of the cheap airline Really turned their service from good to bad!! They even had plans to rearrange the seats space so to accommodate more people per flight which was simply ridiculous!! Luckily i rarely travel now so i dont havento face much challenge of which airline to choose
As a frequent flyer who is using CX for last 4 years as main airline, CX is still my default airline when doing business travels mainly because of its wide coverage of destinations and comparatively higher flight frequency.
Other than this, I don't see why CX cannot be replaced by other airlines.
LCC may not be my type of airline coz I am too bulky to fit in LCC's flights, but there are still non-LCC alternatives available in the market.
It is the worst airline in the world.
Thanks for sharing
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