General Environment Analysis of Cathay Pacific

1 January 2017

General Environment Analysis of Cathay Pacific Airways Cathay Pacific is the flag carrier of Hong Kong, with its head office and main hub located at Hong Kong International Airport. Then, what are the effects of the six factors on the Cathay Pacific Airway’s performances in this society – Hong Kong? I will analyse them one by one. Demographic v Hong Kong’s population is 7. 03 million. About 95% of the people of Hong Kong are of Chinese descent, the majority of whom are Taishanese, Chiu Chow, other Cantonese people, and Hakka. The remaining 5% of the population is composed of non-ethnic Chinese.

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There is a South Asian population of Indians, Pakistanis and Nepalese; some Vietnamese refugees have become permanent residents of Hong Kong. There are also Europeans (mostly British), Americans, Canadians, Japanese, and Koreans working in the city’s commercial and financial sector. Hong Kong is one of the most densely populated areas in the world. Thus, it means that the market for airlines is huge. The more diversified the city, the more transfer of people. Besides, the most convenient and common transportation for these transfers is by plane.

So we can see that demographic factor boosts the performance of Cathay Pacific Airways which is the first and largest airline in Hong Kong. Economic v As one of the world’s leading international financial centres, Hong Kong has a major capitalist service economy characterised by low taxation and free trade. Hong Kong is the world’s eleventh largest trading entity, with the total value of imports and exports exceeding its gross domestic product. Much of Hong Kong’s exports consist of re-exports, which are products made outside of the territory, especially in mainland China, and distributed via Hong Kong.

Its physical location has allowed the city to establish a transportation and logistics infrastructure that includes the world’s second busiest container port and the world’s busiest airport for international cargo. For this reason, the cargo airline service in HK is very popular and contains huge opportunities, which improves Cathay’s performance, too. Political/Legal ? In 2001, the Hong Kong Aircrew Officers Association (HKAOA) launched a “work to rule” campaign to further its campaign for pay improvements and changes to roster scheduling practices.

The action involved pilots refusing to work flights that were not scheduled on their roster. Although this alone did not cause extensive disruption, rostered pilots began calling in sick for their flights. Combined with the work to rule campaign, the airline was unable to cover all of its scheduled flights and cancellations resulted. Cathay Pacific steadfastly refused to negotiate with the HKAOA under threat of industrial action. This actually hinder the development of Cathay, which means a large loss of staff. Sociocultural v To the Hong Kong people, time is money, and a minute lost is a step away from fortune.

Thus, if they have to go to a far-away place no matter for business or other reasons, they might first choose air transportation as it is the fastest one. Technological v The use of latest technology of computerized reservation system and flight simulators improved Cathay’s performances who make their systems accessible to consumers through Internet gateways. In addition, the application of e-business made the check in system and other related ways more convenient for the passengers. People can get the latest flight information, select or change a seat, and do the check-in or cancel it.

Global The 9. 11 attack in 2001 was actually a recession period of the airline business in the whole world, which definitely affected the businesses of Cathay. ? Besides, the Gulf War from 1990 to 1991 made also a great impact to the airline business. ? In addition, it is not just war or armed conflict that can have an adverse effect on air travel. Sometimes a virulent virus can create enough ripples of panic in passengers that travel plans are changed or canceled, and airlines suffer as people stop flying or stay closer to home.

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