Tom Wright, GM - South Asia, Middle East & Africa, Cathay Pacific Airways grew up in Kenya and was educated both at school and university in England. In 1978, he joined the British Army as an officer in The Royal Green Jackets. He saw service in Northern Ireland, England, Cyprus, Germany and The Sultanate of Oman. He ended his military career as aide-de-camp to the Chief of the Defence Staff in London.In 1986 he joined John Swire & Sons and was seconded to Cathay Pacific Airways in Hong Kong. His first post was as assistant to the General Staff Manager. Over the next 5 years he went on to be country manager, first in Italy and then Korea. In 1993 he returned to head office in Hong Kong as part of the Airline Planning department. In 1995, he was appointed General Manager Personnel with executive responsibility for HR issues in the Company. In late 1997 he took up the post of General Manager Inflight Services, responsible for cabin crew and all aspects of the inflight service. In September 2000 he was appointed Senior Vice President, The Americas, based first in Los Angeles and then San Francisco. “In February 2006 he took up a new assignment as General Manager Middle East, India & Africa based in the Kingdom of Bahrain. In August 2007 he moved his office to Mumbai and continues to oversee Cathay Pacific and Dragonair’s passenger and cargo operations in South Asia, Middle East and Africa.”
Cathay Pacific Airways is a Hong Kong-based airline offering scheduled passenger and cargo services to 145 destinations in 40 countries and territories. The airline flies to Asia, North America, Australia, Europe and Africa. The airline has operated in India for over 55 years. It currently operates through offices in Mumbai, Delhi, Chennai & Bengaluru with its sister airline Dragonair. Cathay Pacific offers daily services from Delhi to Hong Kong and Bangkok and ten flights a week from Mumbai to Hong Kong. From Chennai it operates 4 flights a week and daily flights to Bengaluru with its sister airline, Dragonair. The aircraft deployed on the Mumbai and Chennai routes is the Airbus A330-300 & on the Delhi routes, a mix of aircraft with the Boeing 747-400 and Airbus A330-300.
Replying to Yash Ved of IIFL, Tom Wright says “We have a great deal of confidence in the long term future of the Indian market.”
How do you see the aviation industry shaping up going ahead?
The most use word this year for the aviation industry will be “uncertainty”. This looks set to be a turbulent year for many of the world's airlines, just as much of the global economy faces difficult and challenging times. We will need to see how the first half of the year settles down and which direction the world is heading.
This business is very cyclical and we have to be able to brave out the down turns and be ready when things bounce back. Overall though travel in and from China and Asia is still healthy.
What remedial measures do you suggest to make the industry stronger?
Ultimately it will all depend on strong economic growth to pull the industry out of this malaise. However there is much the airlines can do themselves to get their costs under control and their route and networks strong. We also need to remember it’s the customer who will make the ultimate choice so we need to keep focusing and investing in products and propositions customers really value so that they return to us each time.
Another issue that needs to be faced are the charges and taxes that Governments and authorities impose on airlines. The European ETS tax on air travel is an example of this. Closer to home we are seeing massive increases in charges being proposed for many of the airports in India. On top of this is the cost of fuel, which globally is high but in India faces additional taxes. All these costs and charges impact the profitability and sustainability of the airlines and will of course add to the cost to the customer.
Ensuring there is a healthy, vibrant aviation industry is good for the country and the local community. The world’s economies are globally connected and ensuring the free and easy movement of goods and people brings huge economic rewards to those cities and countries that support an open aviation environment.
Are you in talks with airlines for code-sharing agreement?
We are a founding member of the oneworld alliance and Kingfisher will be joining that shortly. We have a number of code share arrangements in place with various airlines and will continue to look at other opportunities as and when they make sense.
What are your plans for the Indian market over the next few years?
For India, we have no expansion plans as we have utilized all our traffic rights. We have a great deal of confidence in the long term future of the Indian market and we look towards playing our full part in growing the aviation business here. We will continue to offer our customer superior products, great service and a fantastic network.
If we compare China and India we see that by comparison India is underserved when it comes to the number of flights and visitors it receives. We believe there is further potential here. It’s interesting to note that Hong Kong itself received some 42 million visitors in 2011 from China and elsewhere.
Brief us about your revenue in passenger and cargo business?
Our passenger loads have been healthy with an average of 80%.Performance has been quite stable in second half of the year in spite of the increasing competitive situation and the market fluctuations.
The overall cargo market remains soft as we are right in the middle of the traditional slack season and subject to the global economic slowdown. 2011 has been however a very exciting year as we launched bi-weekly freighters from Chennai to Frankfurt, Bengaluru to Hong Kong and a new destination, Zaragoza in Spain. We will continue to look at potential new markets in the coming year.
There are reports that Air china and Cathay Pacific Airways gets nod for JV?
Yes. Air China Cargo Co., Ltd. (ACC) has commenced operation as a joint venture cargo carrier between Air China Limited and Cathay Pacific Airways Limited in early 2011.
With its principal operating base in Shanghai, the joint venture will soon have a fleet of 12 Boeing 747-400s freighters.
The joint venture has given the Indian market more accessibility to the northern and eastern China and many destinations served by Air China.
Are you planning induct any new aircraft?
We now have 91 aircraft on order at list prices of HKD180 bn. The orders include 32 Airbus A350s and 26 Boeing 777-300ERs, all state-of-the-art, modern and fuel efficient aircraft
We are introducing Premium Economy Class and the New Economy class on our long-haul flights from March 2012.Passengers will be able to book their onward flights from Hong Kong on the new product from April 2012 onwards.
Any fund raising plan?
We will fund the aircraft purchases through bank loans, other debt instruments of the company, and/or cash generated from the company’s business operations. We have a very strong balance sheet. The financing arrangements will be structured and spaced out over the years to ensure that our balance sheet remains strong.
What is the present network of Cathay Pacific Airways? Are you planning to increase its network in future?
Cathay Pacific offers scheduled passenger and cargo services to 152 destinations in 41 countries and territories and we have flights to Asia, North America, Australia, Europe and Africa.
Our full service sister airline Dragonair, an affiliate member of One World, serves 33 destinations across the Asia-Pacific region, including 17 cities in Mainland China.
In 2011, we have expanded our already-extensive international network by adding two new routes - a four-times-weekly service to Abu Dhabi, the capital city of the United Arab Emirates (UAE) and a daily flight to Chicago in the United States. We have also increased frequencies to Milan, Paris, New York, Toronto and a number of Southeast Asian routes and Dragonair has increased frequencies to a number of cities in Mainland China.
For 2012, we are keeping close eye on the markets we operate and will continue to explore new destinations with strong potential.
Brief us about your financials?
The Cathay Pacific Group reported a profit of HK$2,808 million for the first six months of 2011.This compares to a profit HK$6,840 million in the first half of 2010. Earnings per share fell by 58.9% to HK71.4 cents. Turnover for the period rose by13.2% to HK$46,791 million. In the first half of 2011, the core business of the Cathay Pacific Group remained generally robust following the very strong performance of 2010.
The passenger businesses of both Cathay Pacific and Dragonair performed well, with strong demand for premium class travel despite economic uncertainty in some of the world’s major economies. The cargo business performed reasonably in the first quarter of the year but was appreciably weaker in the second quarter. The relative strength of some of our key operating currencies made a positive contribution to our revenues during this period.
What is your market share?
Our overall market share is healthy and varies by route. Despite operating in a very competitive environment we are satisfied our customers continue to choose us.
What is your cash reserve and debt?
As per the Annual Results for 2010,Cathay Pacific enjoyed its best-ever year by making a net profit of HK$14.048 billion which is a rise of fractionally under 200% on the previous year and some HK$7 billion ahead of our previous record year in 2007.The performance for 2011 ,overall, has been stable considering the economic slowdown and the market fluctuations.
What kind of hiring are you looking at?
We will be hiring cabin crew from India and also have opportunties for pilots. These will all be based in Hong Kong and will operate our world wide network. We also continue to have opportunities here in India.