Cathay Pacific to spend HK$51b on expansion
Updated: 2010-03-17 07:35
By Joey Kwok(HK Edition)
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Tony Tyler, CEO of Cathay Pacific, talks to China Daily about the company's business plans. Edmond Tang / China Daily |
Four-year plan includes construction of HK$5.5b cargo terminal at HK International Airport
Cathay Pacific Airways, the biggest carrier in Hong Kong, expects to spend HK$51 billion in the next four years on purchasing new aircraft and building its own cargo terminal, the company's Chief Executive Tony Tyler told China Daily in an exclusive interview Tuesday.
As the airline unveils future expansion blueprints amid the global economic recovery, Tyler said the airline is likely to run a better business this year, as the world's economy gradually picks up.
"We are planning a modest increase and low single-digit growth in capacity. We do hope that, in particular, the front-end business, the cargo (business) comes back more strongly than that," Tyler said yesterday.
He said that Cathay is now building its own cargo terminal at Hong Kong International Airport, with the terminal, costing around HK$5.5 billion, scheduled to start operations in 2013.
"Hong Kong has a great future as a cargo hub. It's already the number 1 international cargo hub in the world," Tyler said.
Although Hong Kong's position as the top international cargo hub is likely to be challenged by Shanghai, "Hong Kong will remain a very important cargo hub," Tyler predicted.
He added that Hong Kong, locating at the heart of the Peal River Delta (PRD), will play a crucial role in the international cargo business, as the city has the best-connected airport in the delta region, in terms of international flights and cargo volume.
To further grow the cargo business in the city, Tyler said the airline will also deliver 10 new Boeing 747 freighters in early 2011, with the first aircraft to start flying in January next year.
The Hong Kong carrier, meanwhile, is quite bullish about the air cargo market on the mainland.
Apart from the cargo terminal in Hong Kong, Cathay last month has also agreed to provide 1.67 billion yuan, or HK$1.9 billion, to its joint-venture cargo operation with Air China, which holds an approximately 30 percent stake in Cathay.
After the investment, Cathay will own 49 percent of Air China Cargo, the cargo joint venture in Shanghai, while Air China will hold the remaining 51 percent.
Tyler said that the airline sees enormous potential in the Yangtze River Delta region in air cargo development, while the joint venture also signifies "a significant step" into the mainland market.
"We believe, in the long run, the best thing we can do is to continue to enjoy serving that market by direct participation," Tyler said.
Market analysts believe that Cathay's participation in the joint venture will help Air China Cargo develop as one of the biggest cargo airlines in Shanghai, after China Eastern Airlines completed the acquisition of Shanghai Airlines in January and surpassed Air China as the country's second largest airline by fleet size after the deal.
Moving against the 0.27 percent drop in the benchmark Hang Seng Index Tuesday, shares in Cathay Pacific rose 0.27 percent, or HK$0.04, to close at HK$14.98.
(HK Edition 03/17/2010 page2)