Cathay Pacific To Serve Abu Dhabi And Chicago

HONG KONG TO MIDDLE EAST MARKET

Cathay Pacific will begin services to Abu Dhabi from June 2^nd, 2011. The route will be operated on a four-times weekly basis with B777 aircraft, whereas the new service to Chicago will be operated daily on a non-stop basis from September 1^st, 2011.

There is little O+D traffic between Hong Kong and Abu Dhabi, with Qatar Airways carrying the majority of passengers via Doha, however Cathay Pacific will be seeking to capture a share of the wider market to the Middle East which equated to over 327,000 O+D passengers between September 2009 and September 2010.

Cathay Pacific is already the market leader with a 29% share of the Hong Kong to Middle East market, followed by Emirates with a 27% share, Israeli flag carrier, El Al, with a 16% share, Qatar Airways with an 11% share and Saudi Arabian Airlines with a 7% share.

The leading O+D market from Hong Kong to the Middle East is not surprisingly Dubai, stimulated by Emirates existing service which accounts for 21% of all traffic from Hong Kong to the Middle East.

Over 248,000 of the total Hong Kong to Middle East market flew on non-stop services, demonstrating a large existing market that will be prepared to access Cathay Pacific’s Asian network via Hong Kong.

BLOCKING A POTENTIAL ETIHAD MOVE?

It is perhaps surprising that Etihad has not entered the Hong Kong market, and the move by Cathay could be seen as an opportunity to block any Etihad expansion there. The market will be primarily inbound with labourers filling the back of the cabin from Indonesia, Malaysia and the Philippines. Etihad would need to sell the United Kingdom to Hong Kong market work via Abu Dhabi for the route to succeed, however there is some reasonable trader traffic from Africa that will seek access to Hong Kong and the Guangdong Province potentially via Abu Dhabi. The Cathay move will make any Etihad plan to serve Hong Kong all the more difficult.

CATHAY SET FOR WINTER MOVE INTO CHICAGO

Announcing service to Chicago will mean that oneworld member Cathay Pacific will compete on the route with Star Alliance member United Airlines.

Cathay already operates a number of services to the US.The Hong Kong to US market is large with over 1.7 million passengers travelling during September 2009 and September 2010. The passenger share is listed by carrier in the table below;

Source IATA BSP data (Airport IS) September 2009-2010

The new service will no doubt be bolstered by the codeshare agreement in place with partner American Airlines which will supply significant onward feed at its Chicago hub. Likewise, American Airlines passengers will be able to connect to a significant Cathay Pacific network in Hong Kong meaning the route should be balanced with two way traffic and a strong demand for business traffic.