Monday, September 16, 2013

■ HONG KONG: Cathay Pacific eyeing Nigeria, Algeria as part of African expansion plans.

Hong Kong-based Cathay Pacific (CX) has mentioned Africa as being part of its longterm expansion plans with the intention being to exploit the growing Africa - China market; Nigeria and Algeria in particular.

Cathay Pacific B747-400 (Arpingstone)
In an article outlining Cathay Pacific's long term strategy in light of a changing global economy, industry publication, AspireAviation, writes that Cathay Pacific will have to consider previously overlooked markets, namely Africa, as a means of promoting growth. However, as is the case on the airline's various other routes, namely Asia - Europe and Europe - Australasia, it will have to compete with the Gulf carriers whose head start into the African market already gives them an added advantage over many Far Eastern operators.  
"Cathay Pacific could partner with Air China (CA) to jointly develop this fast-growing market by launching routes to Lagos and Algiers where Chinese investment is significant, leveraging the unrivalled strength of Dragonair’s extensive Chinese network and Air China’s dominant market position at Beijing Capital International Airport with its 41% capacity share there."
In addition, while the Gulf carriers have a geographical advantage that allows them to offer far greater variety in terms of the destinations served that neither Cathay Pacific nor Air China could offer, it is argued that the CX and CA could "utilise Cathay Pacific’s extensive Chinese and North Asia network which includes destinations such as Wenzhou, Zhengzhou, Fuzhou, Changsha, Guilin, Kunming, Nanjing, Xi’an, Qingdao and Air China’s flights from Hong Kong to Guiyang, Tianjin and Dalian in China, that the Middle Eastern carriers could not match"

As such, an initial strategy could include flights to Nigeria and Algeria where China currently has significant financial and infrastructural interests. China recently signed a USD500million deal with Abuja for the construction of four new international airport terminals in Abuja, Lagos, Port Harcourt and Kano while Chinese contractors in Algeria have been awarded contracts to build the new Olympic Stadium of Oran, the bureaus of the ministry of foreign affairs and the Constitutional Court, the largest prison in the country and lately the third largest mosque in the world, to be built in east Algiers by China State Construction Engineering Corporation (CSCEC). 
"Such flights to Lagos and Algiers could be flown by the A340-300s which will be made available as the 777-300ERs replace the quad-engined jet on more and more European routes before the A350-900 replaces them in the long run."
At present, Cathay Pacific's sole African destination consists of a daily flight to Johannesburg.