Cathay Pacific Airways - China or the World Essay

Cathay Pacific Airways - China or the World - Essay Example Currently, Cathay Pacific Airlines is providing services over 90 destinations, carrying 15 million passengers each year. After the acquisition of 100 percent holding in Dragonair, the Hong Kong-based carrier – the biggest airlines serving the mainland China, outside the mainland, Cathay will bring Dragonair also in the fold of Oneworld alliance on meeting the delivery conditions and support of other alliance members. It is a founder member of Oneworld alliance of ten member airlines. The alliance has a combined network of 700 destinations. Cathay Pacific also code-shares with Oneworld partners -- American Airlines, British Airways, Iberia and Qantas. The question before Cathay Pacific is to either opt for strategic alliances that can develop the mainland market or instead of concentrating on mainland market it should serve the global market. After entering into a conditional agreement on 8 June 2006 of Cathay Pacific with Air China, CNAC Limited, CITIC Pacific and SPAC, parties have agreed to restructure holdings in Cathay and Dragonair and Cathay acquisition of additional shares in Air China. According to the agreement becoming unconditional, Dragonair will become a fully owned subsidiary of Cathay, Air China will become a major shareholder of Cathay, and Cathay will increase its holding in Air China. Reasons for the transaction were that Dragonair was not performing well and was not availing the benefits of economies of scale. This investment in one another’s holdings will help in findings means to improve service, offering, network and growth of Chinese aviation industry. The international connectivity of Cathay and mainly, Hong Kong-China network of Dragonair will not only benefit both airlines, it will better Cathay’s network reach, linking it to China and connecting China to the rest of the world. This transaction will further help in developing Beijing Capital International Airport and Hong Kong International Airport, turning into gateways and hub for mainland China and aviation industry of both Hong Kong and China.  Ã‚