‘Our business, sales have been strong in India this year’

The Cathay Pacific Group reported a profit of HK$ 3,150 million last year for its worldwide operations. Charlie Stewart-Cox, General Manager, South Asia, Middle East & Africa, Cathay Pacific Airways, says the airlines has had a ”pretty positive” start in India this year. India is amongst the top 10 markets for Cathay Pacific and its sister concern Dragonair.

The Group has both passenger and cargo operations from Delhi, Mumbai, Hyderabad, Bengaluru, Chennai, and Kolkata.

It has 48 passenger flight services in these cities with Dragonair operating flights from Kolkata and Bengaluru. Cathay operates in the remaining four cities.

Recently in Kolkata to launch an additional flight to Hong Kong, Stewart-Cox spoke about the group’s India outlook, passenger load factor and cargo operations. Excerpts:

How has the Indian market evolved for the group?

Ten years ago, we had four flights a week through Mumbai. But, today there are 48 from 6 cities. So there has been a significant growth.

We have had two types of growth. There is market growth and as the Indian economy grows we see a scope for travel and tourism. The travel market in India has seen a good growth even when there were relative weaknesses elsewhere round the world.

On top of that we have had capacity growth. So we started operations from Kolkata in 2012 followed by Hyderabad. Then we increased our frequency in Chennai.

Out strategy has been to start a market and build it up so that we can have daily flights. And in certain places like Delhi and Mumbai we have tried to expand more.

In terms of contribution to turnover to the Cathay Pacific Group, where does India stand?

It’s amongst the top 10 markets of the Group. And we are very interested in long term service here. In terms contribution to turnover it will be a small percentage, a small single digit number (in percentage terms) maybe.

How profitable are India operations?

We do not allocate profit in a geographical sense. We are operating flights into India and it includes sales from all across the world. So the allocation of cost or calculation of profit cannot just be attributed to India.

The India operations are mostly sales income and some costs. But there are other factors like landing costs which cannot be allocated country specific-wise.

What about this year?

We have had a pretty positive start to the passenger side of the business this year; from driving up the load factor, changing our mix, opening new markets beyond Hong Kong and so on.

Fuel price remains a concern, always; but generally speaking its in a better condition that it has been over the last 5 years. The outlook is positive.

But overall, our business and sales in India is strong so far this year.

At present, you have 48 flights from 6 cities. Any chance of adding new routes or increasing frequencies?

We are entering a year of consolidation. And have seen a significant growth over the last 5 to 6 years. We have added destinations like Kolkata and Hyderabad. Our traffic rights are almost filled and so we look at consolidating and building on the routes.

What is the passenger load factor you expect this year?

In 2014, our passenger load factor stood at 83.3 per cent for the entire group (Cathay Pacific and Dragonair).

And we look to sustain that this year. There are indications that the markets are picking up with increased travel for business and tourism.

Are you looking to add more seats in the business class category?

I think, to tailor a configuration of an aircraft for every individual market is difficult. Generally, speaking we’re strong on business travel.

And a major operator between the world’s finance hubs – say Hong Kong and New York. In the business class in India, the configuration is around 39; and it’s just about right.

Are you looking at expanding cargo operations?

We operate freighters into all the six cities. The number varies. But yes, we would like to increase it; if there is a market.

World wide around 30 per cent of our turnover is cargo. However, I would say (in terms of contribution of cargo to turnover) that the percentage of freight we get from India is larger than the system average.

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