MALAYSIA remains an important market for Cathay Pacific Airways although it has no immediate plans to mount additional flights here, said its deputy director and chief operating officer David Turnbull.
The airline, which has been flying to Kuala Lumpur for 45 years, operates three flights daily with load factors for both cargo and passenger reaching 70%.
Three times a day is enough for the moment and we have no immediate plans on adding an additional to make it four for now. We just mounted an additional flight last year and therefore time is needed to absorb the capacity, he told StarBiz in an interview.
Turnbull is based in Hong Kong and has helmed Cathay for the past three years as COO. He is also familiar with Malaysia as he has served as country manager from 1979 to 1980. The airline has an existing code share arrangement with Malaysia Airlines (MAS) for two additional flights that brings the total to five daily flights from KL to Hong Kong and back.
Although the Hong Kong based carrier has flown to KL for 45 years, its maiden flight to Malaysia was in 1950 when it flew to Jessleton (now known as Kota Kinabalu).
For several years then Cathay used to ply the KK, Singapore, Penang routes. It also used to make a stopover in KL for its flights to Perth and Jakarta.
But those days, Turnbull said it was a modest service and the airline lost heavily. However, after five years of operations into KL, it had turned around and has since been a profitable route.
We have done a lot of flights then. We still have the rights for KL-Singapore but it is not what we want (to operate), he said.
Other than flying 3 times a day to KL via KL International Airport, Cathay flies daily to Penang (via KL). The airline has indeed been flying to the Pearl of the Orient for the past 25 years. It also has a freighter service into Penang twice weekly.
Today, Cathay is carrying a lot of Chinese from mainland China into both KLIA and Penang.
Turnbull said a lot of Hong Kong people also preferred Penang as a holiday destination but there were also many Malaysians travelling to China via Hong Kong.
Although the Malaysian market remains important to Cathay, its key markets remains Hong Kong, North America and Australia. Those are the most profitable routes for the airline.
Our biggest market used to be North Asia, now it is much more balanced between America, Asia and Australia. The biggest market is also home-based and China, we have a lot of tourist out of Hong Kong, he said.
Regardless of being so closely linked to China, Cathay is still in negotiations to fly into China. It is hoping to secure rights to Beijing, Shanghai and Xiamen.
Although it may not fly directly now, it has an associate airline, Dragonair that offers 18 connections into China presently.
Aside Malaysia, Cathay has also no immediate plans to fly into any new destination globally as the priority is to work on China first. As it is the airline flies 60 destinations worldwide and offers connections to over 30 Asian cities.
It is also a partner of Oneworld, a global airline partnership that offers connections to 135 countries and over 570 destinations.
There are no immediate plans to fly into newer destinations but we are looking at one or two destinations, but these are not in Asia, Turnbull said.
Turnbull is eyeing Russia, but it would be a couple of years away before Cathay secure rights. It has also plans to mount flights into one or two additional destinations within Europe and US.
Cathay together with American Airlines currently flies to over 140 points within US. In Europe it has operations into Britain, Germany, Finland, Sweden, France, Nether-lands, and Italy and code share with Swiss Airlines into Switzerland.
Cathay has a current fleet size of 87 aircraft of the B747, B777 and A340, A330 series. The airline boasts of having one of the youngest and most modern passenger fleets in the world with an average age of seven years.
Asked his views on the threat of war on Iraq and its impact on the airline industry, Turnbull said: Any war (on Iraq) would badly affect the region (Asian).
At worst we expect airlines in Asia to be worst off by 15% and at best at by about 10%. That also depends on how long the war goes on and certainly we would have to delay or defer flights otherwise margins would be squeezed.
Globally, it would send every airline backwards, he said.
He said the aviation industry would be more susceptible and with bad sentiments many trips, which are not essential, would be cancelled and that would not be good for the airlines.
On his views on Malaysia's move to become a transportation hub, he said: I think it is a pretty tough job, there is a lot of competition and I can't say it cannot work.
But KL should be cheaper and Singapore is more expensive than KL. It is a nice airport with lots of capacity available, and the country should be able to build up the airport but as for hub, it depends on a strong home base carrier. The (home base carrier) need to be a leader,'' he said.
Was that happening? Turnbull said it was, but amid some difficulties.
I am aware they (MAS) has some fairly good expansion programme and have also signed for six units of the A380-200 (via its parent Penerbangan Malaysia Bhd), which would be good for the hub.
As for Cathay, Turnbull said the airline will continue to operate flights into KLIA but it would not make it a hub for it already has a mini hub in Bangkok and Taiwan. The choice of a hub requires critical mass of frequencies and connections (from both Cathay and interlines) and also requires a good number of beyond rights extended from KL to make it viable (for Cathay). At the moment, the airline does not have any plans to create another hub in KLIA or other parts of Asia.