Cathay Pacific is putting a stake in the ground in New Zealand this month as it works on rebuilding its services to this country.
During the pandemic the airline's New Zealand presence has largely involved cargo flights — including special services to deliver Covid-19 test kits — but the return of its Airbus A350-1000 to Auckland is aimed at establishing a toehold for passenger services to grow.
Richard Jones, regional acting head of southwest Pacific for the airline, said it wanted to move back to daily services to New Zealand as soon as possible, but that would depend on demand and the regulatory environment in its Hong Kong home base, where border restrictions are gradually being relaxed.
It's starting slowly with two flights this month.
"From a southwest Pacific viewpoint, we're extremely excited. It is obviously rather a limited start but we do want to obviously ramp that up," says Jones. "We will be prudent about growth but ideally at some point over the next sort of 12 to 24 months we will be to be back to the pre-Covid schedule."
New Zealand is dropping border restrictions faster than Hong Kong and this had been a big factor in the airline's decision to return with passenger flights.
Cathay is among the airlines which have been hardest hit by the pandemic because it doesn't have the same sort of domestic options as many others, the Chinese mainland has been largely shut off and regional markets in Asia are among the slowest in the world to recover. Japan is just about to ease restrictions.
While the airline eked out an operational profit in the second half of the last calendar year before the Omicron outbreak dealt a fresh blow, it suffered an annual loss for last year of HK$5.6 billion ($1.26b). Cathay entered the financial calamity of Covid after already suffering a hit to demand because of civil unrest in Hong Kong.
Passenger numbers for the airline - frequently named as one of the top carriers for product and service - are improving on last year, but from a very low base. Operating figures for April show it carried a total of 40,823 passengers, an increase of 82.2 percent compared to April 2021, but a 98.7 percent decrease compared to the pre-pandemic level in April 2019.
The airline turned 75 last year and has been serving this country for more than half of that time. Before the pandemic devastated its schedule, Cathay Pacific was one of the biggest overseas longhaul carriers operating here, flying into Auckland up to twice a day (plus one flight with partner Air New Zealand) and into Christchurch up to four times a week during summer.
It was the first airline to operate the A350-900 into Auckland with regular flights and just before the pandemic it introduced the larger -1000 model of the plane.
It has maintained a strong staff presence here; although things are down on pre-pandemic levels, it has 18 people working in this country. While there have been few passenger flights during the past two years, it did 10 charter flights to bring in about 15 million rapid antigen tests this year.
More than 1000 tonnes of RATs were flown in aboard Boeing 747 freighters from Shanghai via Hong Kong.
The airline is majority owned by logistics corporation Swire Pacific, with significant shareholdings from Chinese government-owned Air China.
As at the end of last year Cathay had 20 freighters - 14 Boeing 747-8s and six 747-400s. Strict pilot quarantine rules in Hong Kong hit freight operations but these are now expanding again to meet strong demand for air cargo.
The airline is rebuilding gradually in Australia, which had a head start on New Zealand in opening up its borders. It now is building towards 12 flights a week. Jones says booking patterns in New Zealand are similar to those across the Tasman, with the visiting friends and relatives (VFR) market the first to recover.
"There's a lot of people that obviously haven't been able to see family and friends for up to four years. We're also seeing a lot of inquiry from small to medium business persons, they're very eager to get away and re-establish those connections.''
Holidaymakers were back now and more destinations were opening up.
"There's a lot of pent-up demand for a good holiday and I think with the savings that people have had over a two-year period, that means there's an opportunity for people," says Jones.
"At the moment it is very much about the transit customer. From New Zealand the connections are through to predominantly the UK and Europe."
From the start of May vaccinated non-Hong Kong residents and Hong Kong residents were allowed to enter the territory but its tourism board says there are still strict conditions including a negative pre-departure test, booking a seven or 14-night designated quarantine hotel and being subject to a "test-and-hold" arrangement (comprising a PCR test and a rapid antigen test) at the airport on arrival.
"I think Hong Kong is probably a little bit behind from what obviously we're seeing in our part of the world," says Jones. "As we've learned throughout the pandemic, we will work with the government and work within the rules that are put in place for us.
"One benefit, I guess, of being a little bit later is we do have the opportunity to learn from others that have opened before us."
Pre-pandemic, the airline had a strong loyalty programme in New Zealand and Jones says it has stayed connected to its Marco Polo members, many of whom are very keen to fly again.
Airline ticket prices have increased around the world.
"There is high demand and as a result, the price will reflect that. It's a tough one, obviously no one's come out of a pandemic before so it's a bit of feeling your way."
Jones says fuel is a big headwind for airlines but efficient aircraft help to reduce its impact.
The airline has used sustainable aviation fuel (Saf) on delivery flights from Airbus in Toulouse for several years. It has made a commitment to power 10 per cent of its fleet with Saf by 2030.
The A350-1000 for the Auckland route will carry a total of 334 passengers across its business, premium economy and economy-class cabins, 54 more passengers than the airline's A350-900 aircraft.
Heritage flights
• The first scheduled service between Hong Kong and New Zealand was a joint venture in November 1982 between Cathay Pacific, Air Niugini and Air New Zealand.
• This tripartite venture was a rotational service with Air New Zealand operating for six months, Cathay Pacific doing the next period, then Air Niugini. The flight had a brief stopover at Port Moresby.
• Another joint venture established with Air New Zealand lasted for five years until Cathay went its own way, and just before Covid built up to 14 flights a week to Auckland and four flights to Christchurch.
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