One man expands his band

By CHRIS DANIELS aviation writer

Thirty years ago, David Figgins was a one-man band, the only representative of the airline Cathay Pacific in New Zealand.

"When I started here I didn't have a pencil," he says.

Now, he is in charge of 34 staff, and has played a role in the airline's expanding business in the Pacific.

The Hong Kong airline this week announced a six-fold increase in profit - $905 million for last year - and Figgins can announce that three extra flights a week between New Zealand and Hong Kong will return in June, after initially being scheduled for withdrawal.

Cathay expanded its daily return service by three flights a week over summer, and has decided to make the increased schedule a permanent fixture.

The "hard yakka" days of battling to keep Cathay planes flying here are over, says Figgins, now country manager for New Zealand and the Pacific Islands, but the business is not easy.

He says the Hong Kong-Auckland route is a long thin one, requiring a lot of fuel and crew time to get to a country without a large population.

Making money on it depends on getting lots of people - tourists, students, business people - here.

Cathay flies a four-engined Airbus A340 aircraft between New Zealand and Asia, sometimes replacing it with a Boeing 747-400 when demand is high.

It does not split off financial results for the New Zealand market from the rest of its accounts, but the decision to permanently increase flights to New Zealand shows things are going well.

It is not just tourists that help make it worthwhile for Cathay to come to New Zealand.

About 20 per cent of its revenue from the Hong Kong-New Zealand route comes from cargo - crayfish, flowers, fish, mandarins and asparagus.

Cathay began life as a private aviation company, set up by two entrepreneurs, one Australian, the other American. The Chinese Government is now a major shareholder, but the airline takes pride in its private sector heritage and business methods.

"We are not conservative, just more cautious," says Figgins. "Having been privately owned, we know that in the background, we have to be."

If Cathay Pacific ran into financial trouble, no friendly Government would be waiting to bail it out.

"We have no Government protection at all. When it comes to terrorism insurance, for example, a lot of Governments underwrote their carriers. We went out and did that separately."

It is this caution that makes Figgins and Cathay wary of competitors' schemes to stimulate the market with aggressive discounting and price wars.

Some of the fares being offered are "just nuts", he says.

He believes aggressive discounting risks undervaluing the product - if people get a cheap ticket one day, it is hard to justify charging an increased - and for the airline more reasonable - price the next.