Cathay Pacific Airlines Cathay Pacific has been serving and growing with Hong Kong for 60 years. Being as the world's largest international cargo airline and the world's busiest airport in terms of cargo traffic, Cathay Pacific is one of the seven airlines to be ranked as a 5-star airline by Skytrax in 2009. Affected by the unstable global situation of political, economic and cultural, each single change of general environment may cause significant influence of airline industry.
Therefore, to evaluate the performance and future developments of Cathay Pacific, we have to begin with the analysis of the general environment of Cathay Pacific airlines. Political and Legal Airline industry is linked closely to the policies of governments, so political and legal segment is the essential factor which affects the development of Cathay Pacific. Currently, the worldwide airline industry is denominated by several firms which rely heavily on political and financial power.However, with the political preference, private capital began to inject into the civil aviation industry and brings challenge to Cathay Pacific. For example, in mainland China, the development of private airlines such like, OK Airlines and Spring Airlines grab parts of market shares of Cathay Pacific in certain air routes.
On the other hand, taxation laws and antitrust laws also have impact on the operation of Cathay Pacific.As is known to all, each policy adjustment of fuel prices and airport construction fee would cause consumers’ great concern and would to some extent influence airline firms. Economic As for Cathay Pacific, economic factors play important roles. The well-being of Cathay Pacific depends heavily on the stability of economy itself, GDP, interest rate and the currency stability. For example, GDP determine the purchase power of consumers and indicates their willingness and ability to choose airplane as their vehicles.Additionally, interest rate charged for loans will be affected by inflation and by international economics which will finally influence the capital operation of Cathay Pacific.
On the other hand, regional economy will influence the performance of Cathay Pacific since it has investment in different countries for airline cooperation and the sudden booming or recession of regional economy will trigger different outcomes for Cathay Pacific. SocioculturalThe sociocultural environment is the basic factor which influences the development of Cathay Pacific. First, shifting in preferences of products and service characteristics has impact on the adjustment of certain passenger service and products according to different target customers. Secondly, the concern about social responsibility drives Cathay Pacific’s action towards environmental friendly and fuel efficiency. Additionally, workforce diversity influences the gender composition and education background levels of Cathay Pacific.
TechnologicalTechnological segment is widely regarded as the essential factor which determines the quality of airline industry. New business technology provides Cathay Pacific opportunity to use e-business as the second channel between sellers and buyers. Product innovation helps Cathay Pacific to fulfill the demand of customers. Research and development sections influence the use of latest technology, for example, the application of new knowledge and technology make computerized reservation system, flight simulators and fuel saving technique came true.Demographic Demographic changes such as the structure of population by ages, income distribution and population size can have important influence on demand for particular products and services. To be specific, taking income distribution for example, different income distribution across individuals and households reflect the structure of different income groups which will indirectly indicates the demand of airways and finally influence the airline route setting of Cathay Pacific.
GlobalIn the respect of global segment, major global and regional political, health emergencies may influence the operation of airline industry, especially, the firms such like Cathay Pacific which has various international networks. For example, a global disease outbreak such like SARS in 2003 would dramatically influence passenger’s choice of transportation. On the other hand, important political and terrorist events such as the 11 September terrorist attacks and Gulf War may lead the airline industry into great challenge since these events could cause consumers’ concern about safety.
