Saturday, September 1, 2007

Cathay Pacific

Cathay Pacific has announced that it will be increasing its Karachi flights from October 2007 onwards by adding a 4th weekly frequency to the city.

All 4 flights will be flown via Bangkok (with full 5th freedom rights on the BKK-KHI-BKK sector) using the Airbus A 330-300 which will have a 2 class configuration. The new flight schedule has already been uploaded on major GDS systems and its timings are as follows :

Day: Saturday
CX 703 Dep HKG 1710 Arr KHI 2315
CX 700 Dep KHI 0025+1 Arr HKG 1230

Analysis :

As far as my views go on this decision taken by CX, I feel its an excellent move by them as they have consistently witnessed more than 70% load factors on an annual basis on their KHI flights for a few years now. Their next move in Pakistan should be to launch 3 weekly HKG-ISB nonstop flights with the A 333 as from ISB, there is a decent O&D and 6th freedom market to capture on this route. Now some of you might say why ISB-HKG nonstop with a large 300 seater A 333 and not be safe and fly HKG-BKK-ISB or why not fly HKG-LHE / HKG-BKK-LHE. My reasons are for wanting a HKG-ISB nonstop are varied.

TG & PIA already fly from ISB to BKK a combined 6 times a week hence there is enough capacity in this market segment but by flying HKG-ISB nonstop, CX would have a nice niche market to itself. ISB is also good for cargo as they have the potential of being
over 80% on each flight as ISB is closely located to the industrial cities of Sialkot, Lahore & Gujranwalla. There is massive export/import of computers, electronics, pharmaceuticals, garments and agricultural related products/machinery conducted between this region and HKG, TPE, Japan, ICN and China which CX Cargo would obviously target and gain. By providing cargo agents with a one stop option from their home country via HKG to ISB and vice versa, the CX Cargo product would prove to be an attractive option giving TG Cargo a good run for their money on this sector. But CX would have a big advantage over TG here as the latter flies an old AB6 on the ISB-BKK route (3 times a week) and this aircraft can only carry 8 tonnes of cargo max per flight where as CX's A 333s can easily take 12-14 depending on the passenger payload.

Apart from cargo, my main reason for wanting a HKG-ISB nonstop flight is because I believe that the J class cabin of this flight can easily witness 75% loads on an annual basis. The logic being is that there is a large amount of J class traffic bound westwards from ISB destined for PEK, PVG, NGO, NRT, TPE, LAX, SYD, MEL, KIX, CAN, HKG & ICN which CX can easily tap into and get as their on board J class product on any wide bodied aircraft is far superior to TG's. By offering a convenient, hassle free ONE STOP flight from these Asian / U.S / Aussie markets via the HKG hub to ISB, it will be a hit with the diplomats, politicians and businessmen who usually fly business class. Therefore if your J class is 75% full year round + cargo is 80% full year round along side a 60% load factor in economy, the flight can still be profitable as the high yield generated from the J class traffic & cargo, I feel is more than enough to compensate for the 60% load factor in Economy which is lower yielding!

One mustn't forget that ISB is now slowly becoming the Pakistani head quarter city for many multinational companies due to its calm security and good law & order reputation with the international community. To ICN, NGO & NRT, CX can get the corporate contracts of the big car, electronics & film/photo companies who have a large presence in Pakistan such as Toyota, Hyundai, Daewoo, Samsung, Sony, Toshiba, Nissan, Suzuki, Fuji, Agfa & Kodak. From China and Japan, ISB can too be targeted as a tourist destination i.e. gateway to the Himalayas & Kashmir as many Chinese and Japanese people love to go mountain hiking as is evident by their large presence in the Kathmandu tourist market.

many congratulations to the CX KHI staff for making this possible as it is due to their combined hard work and dedication that this additional flight came about. FYI, I interned at the CX KHI office for 3 summers (2002-03-04) and thoroughly enjoyed my experience there.


Tayub said...

Very thorough analysis on Pakistan and Far East market with CX and TG. There is a great potential for both airlines in Pakistan. In 80's, I have seen LH flying between KHI-BKK-HGK-TYO sector 7X week with full capacity from Karachi. Most of the on-board passengers were Pakistani Nationals heading towards BKK and HKG. At that time, there were no visa restrictions on this sector. I wish, those countries should abolish or at least ease the visa requirments. Because, there is a great potential to carry transit passengers from Pakistan to North America, especially to the West Coast.

I wouldn't even suggest anything for PK on this sector. Because, they tend to do opposite of what anyone would usually do.

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