Dynamic Aviation Environment Toolkit: Cathay Pacific Report

This report provides a comprehensive analysis of Cathay Pacific's performance, focusing on the impact of the Hong Kong pro-democracy protests and the COVID-19 pandemic on the aviation industry. The report begins with a justification for choosing Cathay Pacific, highlighting its significance as a major Hong Kong aviation organization. It then delves into a definitional analysis of 'democracy' using multiple sources. The core of the report examines current trends in the aviation sector, using data from Hong Kong International Airport and Cathay Pacific's traffic and financial results. The report analyzes passenger numbers, flight movements, customer satisfaction, revenue, costs, and profitability over a three-year period, supported by charts and tables. Finally, the report assesses Cathay Pacific's recovery from the protests and the challenges faced, offering insights into the airline's operational and financial resilience during a period of significant disruption. The report leverages data from annual reports and industry sources to provide a detailed overview of the airline's performance and recovery strategies.

Dynamic Aviation Environment
Toolkit
A Chosen organisation
Indicate which aviation organisations has been chosen and provide a brief justification for
your choice.
Your focus throughout the project will be on the organisation chosen so make sure you can
access information related to it. Your justification should be brief and should focus more on
the organisation’s relevance to the protests rather than availability of information (150 words
max.).
For conducting this report, Cathay Pacific is being taken into consideration. It is also known as
Cathay Pacific Airways Ltd. The company has its head office in Hong Kong International
Airport and operates in wide area of market i.e. more than 60 countries with providing 190+
destination to its passengers. With light to the fact that, various business organisations sectors
were being impacted by the protest 2019-2020, one of the major reason for choosing this
aviation organisation is that, respective organisation is an icon for Hong Kong aviation
organisation which is being fuelled by Chinese market. Keeping various factors and elements
which were caused by this protest, respective organisation will enable to focus on most of these
factors and will provide better understanding of the material facts to be displayed in this meta-
analysis. With addition to that, as selected organisation has a close relations with Chinese
market dealing, so chosen company will satisfy or justify all the requirement for this project.
B Definitional analysis
Carry out a definitional analysis of the term ‘democracy’ using 3 appropriate sources.
(The maximum number of words for Task C is 250.)
Firstly, find 3 appropriate sources to carry out this analysis. Present the details of each
source according to referencing guidelines. (Remember, the guidelines vary depending
on the nature of the source.)

Source 1: Compass: Manual for Human Rights Education with Young people, 2017
Source 2: Britannica, 2021
Source 3: Merriam-Webster, Incorporated, 2021
Secondly, complete the table below to show 3 definitions of ‘democracy’ (one from
each source) and some key points relating to the term.
Author (year) Definition Key points
Kofi Annan, 2017 According to the author,
democracy had came from
the Greek word, in which
demo means, “people” and
Kratos means “power”.
Which combines together to
form “people of power”.
Collectively in general
sense democracy refers to a
government which aims its
respective plans and
strategy keeping in mind
interest of various people
residing in the nation.
Power in hands of people.
Government, of the people,
by the people and for the
people.
Robert A. Dahl
According to the writer,
following policies of
democracy in a Nation
directly relates to ruling by
people. With addition to
that, it means a country in
which all the laws and
regulations are being
developed by individuals
All laws and regulations
dedicated for respective
individuals.
Government representing
people.

residing in respective
country, governing body of
the nation only acts as a
medium.
Merriam-Webster
In words of the respective
writer, democracy refers to
the way of government
ruling in which supreme
power is vested in people of
the nation and is being
exercised by them
indirectly or directly, in a
systematic way usually by
conducting term elections.
Government with interest of
people.
Government elected by
people of the nation.
And finally, construct your own definition of ‘democracy’. Present this below:
After analysing the above definitions by respective writers and authors, democracy
includes systematic manner to run all rules and regulation in a nation in which people
posses the authority to choose their governing legislation.

C Current trends in aviation
Based on the given data sets, determine the nature of current trends in the aviation
sector.
You have three sets of data to consider, each represented by a table. These are given
below:
Table 1: Key operational results for Hong Kong International airport, 2016 to 2020.
2016 2017 2018 2019 2020*
Passenger numbers 70,513,00
0
72,866,000 74,672,00
0
71,543,00
0
8,835,000
Aircraft movements 412,000 421,000 428,000 420,000 161,000
Cargo handled (tonnes) 4,521,000 4,937,000 5,121,000 4,809,000 4,473,000
(*Estimate) Source: hongkongairport.com
As by analysing the above table, it could be evaluated that there are decreased number of
passengers, aircraft movements and cargo handled in year 2020. Reflection current
trends in the respective aviation sector, it could be determined that these sectors are
aiming at offering more comfort and improved flight experience to customers then never
before. All efforts and strategies are being focused by aiming growth of these sectors and
minimising effects of various external as well as internal environment on operational
working of a business firm.
Table 2: Traffic results for Cathay Pacific, 2018 to 2020.
2018 2019 2020
Passengers (m) 35.5 35.2 4.6
RPKs (m) 130,626 134,397 20,079
ASKs (m) 155,361 163,244 34,609
LF (%) 84.1 82.3 58.0
Source: Airline Business; cathaypacific.com
By interpreting data of from above table shown, it could be analysed that, there was a
lower count of passengers in year 2019 followed by year 2020 in fact this year faced a
huge downfall from 35.5 in year 2018 to 4.6 in year 2020. With addition to that RPKs
and ASKs and LF% also showed a downfall in the same year i.e. 2020. In reflection to
current trend in aviation sector, sustainability approach is taken into consideration to
attract large public by offering them quality of services.

Table 3: Airline industry net profit ($), b1616412997y region, 2018-20
2018 2019 2020*
North America 14.5 17.4 -45.8
Europe 9.1 6.5 -26.9
Asia-Pacific 6.1 4.9 -31.7
Middle East -1.5 -1.5 -7.1
Latin America -0.8 -0.7 -5.0
Africa -0.1 -0.3 -2.0
World 27.3 26.4 -118.5
(*Estimate) Source: IATA
Consider each set of data and comment on the trends depicted (250 words max.)
As by analysing the above table, it could be evaluated that there are decreased number of
passengers, aircraft movements and cargo handled in year 2020. All efforts and strategies
are being focused by aiming growth of these sectors and minimising effects of various
external as well as internal environment on operational working of a business firm.

D Performance of the organisation
Analyse the performance of the organisation chosen over the last 3 years using figures
relating to categories such as: passenger numbers; flight movements; customer
satisfaction; revenue, costs and profitability
2018 2019 2020

passenger numbers 74,672,000 71,543,000 8,835,000
flight movements 428,000 420,000 161,000
customer
satisfaction
75.00% 70.00% 30.00%
revenue 111060 106973 16965
costs 108715 105282 9010
profitabilit 2345 1691 -2500
passenger numbers
flight movements
customer satisfaction
revenue
costs
profitabilit
-20000000 0 20000000 40000000 60000000 80000000

You will need to find figures relating to the organisation’s performance in the above
categories. Financial information such as revenue, costs and profitability is easily obtained
for both organisations. Annual reports are the best place to look. Skytrax is a useful
passenger numbers
flight movements
customer satisfaction
revenue
costs
profitabilit
-20000000 0 20000000 40000000 60000000 80000000
Chart showing statical data of the organisation in previous financial years

source for information on customer service
flight movements :As by analysing the above table, it could be evaluated that the flight
movement of airlines decreased a little in the period of 2018 to 2019 with the number of
total flights decreasing 8000 from a total of 428000 to 420000 in 2019. clearly this
decrement has been a result of the ongoing pro democracy during that time period. In case
of the airlines the profitability and the revenue is directly related to the number of flights in
a time duration as the very number of flights is the function of profit margin of the
company. With the decrement in the profit of the company due to the external market
conditions means that the company will directly reduce the number of flights and wait to the
working condition of the market to return to normal, the initial decrease as observed in the
list is because of the strategic and technical reasons of the company. When the company
observed a not so good market condition, it decided to put some of the flights at halt. The
bigger turn here is observed with the arrival of 2020, technically a dark year for the
industry of travels and tourism. Through the table it a can be clearly observed that there
large dip in the numbers of flights of the company which was due to the arrival of Covid-19
on the globe. There has been a stagnant decrease in the number of flights in 2020 which is
from 420,000 in 2019 to a shocking low of 161,000. This decrement in the number of flights
was a result of both the unrest condition of the external home market and the heavy impact
of Covid-19. It is with such a decrement in the number of flights the other operations related
to the sectors and functions of aviation industry also took a heavy toll on the company and
the company started tilting towards the sector where it had to bear huge losses.
Revenue : As by analysing the above table, it could be observed that just like the numbers
of the flight of the airlines the revenue has shown a similar trend over the past three years.
Revenue of the company is the total influx amount of the company i.e. the amount that was
brought in and generated by the customers in return of product and services of the
company. The revenue is not the final income of the company as there is huge amount of the
costing that has to be subtracted from the revenue to calculate the profit of the company.
Every company although works to make profit but profit itself is a function of the
companies revenue, Through the analysis of the table it is very clear that the revenue
generation of the company was heavily affected by two causes that is the unstable political
situation of Hong Kong and the second and more devastating for the company the Covid-19.
In the year 2019 Cathay Pacific registered a total revenue of & HK$ 111,060 million which
is considered to be a moderately good in the aviation industry. The company in the
following year registered a relatively low revenue HK$ 106973. This particular dip of 3.7%
revenue numbers was primarily fur tot unresting condition of the Hong Kong with the
political imbalance has to face such downfall in its finance structure and had faced change
in its regulation due to various external factors of the business organisation\.
Your analysis in this task will be enhanced by the use of charts, tables and graphs. Better
to create these yourself using Excel (or similar).
This task should be completed within 1,200 words max.
In an organisational business sector, attainment of desired objectives and goals by

maintaining its performance is a big task or challenge before firm's management
department. Managers and leaders of a business firm introduced various innovative
strategies and plans for ensuring smooth conduction of respective operational activities and
ultimately targets towards improvements in quality of services being provided to valuable
customers of the company. In regards to chosen organisation i.e. Cathay Pacific, managers
of the firm dedicates pure efforts towards attainment of desired objectives of the firm
ensuring effective performance being produced by respective staffs or employee working in
the organisational structure. However, considering fluctuations in business environment,
that acts as a loophole towards attainment of respective goals and objectives of the firm.
https://www.cathaypacific.com/content/dam/cx/about-us/investor-relations/interim-
annual-reports/en/annual_report_2019_eng.pdf

E Recovery of the organisation from the protests
Determine the effectiveness of the chosen organisation’s recovery from the Hong Kong
pro-democracy protests
Cathay Pacific has seen a turmoil in its operations over there last three years as the
political conditions of the home country was not stable and the country was going through a
pro democracy protest. Due to the protest there was disturbance in the functioning of the
`

airlines. In November 2019 the Airline Cathay Pacific said the the civil unrest has been
exceptionally challenging for the company to handle. As it has already been 5 months with
continuation of protest. The staff and other members of the organisation were all affected by
the protest and routine life transportation became a struggle for the country people. The
airlines continued to state that due to the protest there has been a severely impact on the
demand and operations of the business. As the international travel of the Hong Kong
decreased severely, this further impacted the profitability and management of the company,
The company's struggle only increased with the the passage of time as a controversy stuck
the reputation. In the initial days of November the company specifically mentioned that it
will not stop any of its employee from taking part in the process and just a week after this
statement the company came out in open to state that any person taking part in the pro-
democracy protest will be fired. This change of the decision reported to be because of the
pressure from the Chinese government. This was much expected change of opinion and
command front the head office as the China has a 30% stake in the airlines. The airlines
went on to further state that the short term outlook of the solutions remained challenging
and uncertain for the company. As there seemed to be no end for the problem faced by the
airlines due to the as the stats showed that air traffic of the airlines was down to 38% in
August and September and even below to 35% in October and then the company decides to
reduce the flight capacity to 6 % to 7% in the following months because of the absolute
reduction in the demand and disruption in the management of the company. Adding to the
problems of the company was the sudden resignation of the boss Rupert Hogg due to the
influence of the controversy caused by the sudden turn of allowance and prohibition in
taking part in the protest. The arrival of new boss Augustus Tang brought a ray of hope for
the company. As his primary objective was to re-establish the relation with the Chinese
government because the business of the company was heavily influenced by the chines
travellers. The problem of the company was not comma as it was not the poor services or
quality which caused the downfall in the business but it was the external environment that
hindered the the operations. Hence the only focus of bringing the change was to increase the
security and safety measures of the airlines as there were many threats and unsuitability
associated with the working condition of the company. Later to the events of the protest
settlement the company did grow back for a sure period of time as the services for of
company were good enough to resume the business. The little growth period of the company
soon came to and halting end with the arrival of Covid-19 and the events that followed the
pandemic is known to every business. Due to after effect of lock down the company faced a
series of losses with the time. Recently Airline Cathay Pacific reported a 2.8 Billion of loss
in what is claimed to be the toughest year in the history of the Hong Kong based aviation
company. Cathay Pacific hopes to return to market peak with a long duration of recovery
period as the company is going though unprecedented losses.