Cathy Pacific Airways Limited as the Best Airlines in the Aviation Industry - Case Study Example

Cathy Pacific Airways Limited (CAPL) was founded on 24th September 1946. The founders were Roy C. Farrell (American) and Sydney de Kantzow (Australian) both of whom were ex-air force pilots. The company has grown in leaps and bounds since inception despite some of the challenges and incidences that had bedeviled both the Airline industry and the company. Cathy Pacific Airways Limited has grown from two simple aircrafts Betsy and Nikki in 1946 to over one hundred and twenty four (124) latest wide bodied Airbuses and Boeings in 2010 (CAPL 2009). Its employees grew from a small number to a large number of over 20,000 by January 2010. The company’s main head quarter is in Hong Kong International Airport. The performance of the company has improved significantly. It grew from annual handful of arrivals and departures flights in 1946 to over 138,000 flights in 2009, transporting over 25 million passengers and 1.6 million tones of cargo and mail. All the above exemplary achievement were realised by operating in over one hundred and sixteen destination in thirty five countries in the five continents. Furthermore, Cathy Pacific Airways Limited is listed on The Stock Exchange of Hong Kong Limited. The company is owned by Swire Pacific Limited, Air China and CITIC Pacific Limited. The company owns 18.1% of Air China Limited. The company has had its own troubles. It sacked forty-nine pilots after the company’s ever largest industrial action in 2001 and on November 2009, 18 of the 49 sacked pilots won a court case against the company for breach of contract of employment and defamation. .The Company and the airline industry as whole experienced some commercial challenges since its inception. The challengers were September 11th terrorist attack, Gulf war, SARS, HINI, Competition anti-trust battles and rocketing fuel prices. However, the company has continued to make significant performances in its operations that were guided by management led creativity and innovation. As a result, the company has emerged has one of the most coveted and fierce one in the airline industry. The company has undergone a series of changes in the management, ownership, growth and expansion inception in 1946. Most companies in the aviation industry have succumbed to the commercial and management challenges in the aviation industry but Cathy Pacific Airways Limited has always forged ahead taking over competitors and overcoming industry challenges. This has been possible through good and able management. The company is robust about the future and is investing in the latest technologies to keep abreast with the changing business environment. The management Cathy Pacific Airways Limited has changed overtime. New people and inexperienced people have been recruited and hired to take the company forward. The management has also had solve an industrial action that led to the sacking of 49 pilots in 2001 and losing of court battle to the 18 pilots of the 49 who were sacked. However, some pilots were recalled and interviewed before they were readmitted to the cargo wing of the company. Termination of 49 pilots was not easy. This is explained by the Kublers- Rose model that explains that individuals pass through the five phases in dealing with change. The decision caused the affected pilots to pass through the denial phase when they went to court to defend themselves on the grounds of breach of contract of employment, ordinance and defamation. They became angry and frustrated after dismissal. The pilots are seen bargaining for their job when they accepted to do interviews before they were accepted back in the company. They also felt depressed but were happy to be accepted back to the organization. Those who were not reinstated continued their court case which they eventually won. They had accepted that they were not going to be taken back to the company. The other problems that the company had to deal with were commercial challenges. The staff of the company went through hard times during the period when SARS and HINI viruses were threatening them. They were likely to be the victims of the diseases and employees found it difficult to accept that they had to work in an environment that exposed them to so much risk. Growth and expansion Cathy Pacific Airways Limited had continued to expand. On 28 September 2006, Cathay Pacific owned wholly Dragonair. The company has also established closer relationship with Air China, with each airline taking a 17.5% stake in the other. The cordial relationship between Cathay Pacific and other airlines created real synergies that has made the company access extensive network in over 20 cities in China’s Mainland. Creation of Oneworld hub has helped the company and other partners access bigger and better airline commercial markets. Every time a new company joins the hub the rules of the group are modified to accommodate them. Creation of oneworld 1999 was proofs that the company wanted to expand. Development of Oneworld is best explained by Tuckman’s Team development Theory. When Oneworld was formed, it set its own objective and goals. The members forming the alliance came out with ideas and strategies on how they will achieve the set goals and objectives. They developed rules that guide their alliances. Eventually, each partner was given a task to perform in pursuits of the predetermine objectives and goals. The activities and processes continue until another member is admitted or new objectives are established in the existing group. Growth and expansion brings about change. The Kotter’s Eight Step Model which was developed by John Kotter explains best the operations and activities of the company. For the company to grow and develop even in turbulent times demand application of Kotter’s Eight Step model. This is because the model is highly structured and provides direction and guidance on any particular period of time. This requires the management to be sober, inclusive and performance oriented. Technology Cathy Pacific Airways Limited has embrace technology at all levels in order to keep abreast with the changing commercial environment. Expectancy theory that was formulated by Victor H. Vroom in 1960s helped the employees to overcome challenges that come with new technologies. The management and employees anticipated that efforts and cost incurred when introducing updated technologies would bear fruit someday in future. They knew their input will improve the individual performance which will lead to organizational rewards in terms of increasing profits. The new technology is evident when the Self-Print Boarding Pass facility was introduced. It has been liked by passengers. The rollout of the new Manage My Booking facility in April enabled passengers to retrieve and access latest information on booking as well as update personal information. The new version of internet booking that was introduced in Hong Kong featured useful fare calendar. It was available to customers that used iPhones, BlackBerrys and other smart phones. The balance score card is a strategic approach according to Kaplan and Norton (1993) is a system that aids in implementation and management of company’s vision. It has got for perspectives. The financial perspective the company is ensuring that the company earns substantial profits and that the company ownership is balanced. Customer perspective is evident when the company uses face book, flickr, twitter, Youtube and blogging to interact with their customers. This make the company in touch with the preferences and tastes of its customers at all times. Buying process perspective is seen when the company is constantly talking steps to keep its image shining bright in the eyes of the people. On January 2007 the company launched check in for flights that included self check for booking flights and selecting global destinations. The customers use mobile phones to check their flight schedules and destinations. In April 2009, the company launched mobile boarding pass application which used to check flight arrivals and departures. The company is also improving in- flight entertainment by providing in flight entertainment system equipped with personal TVs, 888 CD-albums, many video and audio channels, latest Hollywood blockbuster movies, music and games. Learning and growth perspective is evidence when the company introduces new cabin designs on all its medium and long haul fleet. Conclusion Cathy Pacific Airways Limited has undergone through so much change. It has achieved so much since its inception. The company was able to remain strong and focused during aviation industry turbulent periods because positive, firm and all inclusive management was put in place. The company always been rated among the best airlines in the aviation industry and has scoped various awards in the process. As a result, it has implemented customer friendly initiatives such as online bookings and checking, creation and management of loyalty programmes. The company was one of the founders of Oneworld. Oneworld enable the company to access bigger companies and markets globally. References Cathay Pacific Airways Limited. Annual Report 2008 Stock code: 00293 [online]. Available from: http://www.irasia.com/listco/hk/cathay/annual/ar39165-ew00293.pdf [Accessed 5 February 2010] Cathay Pacific Airways Limited. Our future is in our hands corporate social responsibility report 2007[online]. 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