Cathay Pacific SWOT & PESTLE Analysis

The word 'Cathay' means China in English, which shows that along with name, the Cathay Pacific Group is solely and deeply committed to its home base. Cathay Pacific is the official carrier of Hong Kong and is making huge investments in improvising Hong Kong's airports, cargo terminals, aircraft etc., with a clear vision to make its home base the world's largest aviation center. The company provides passenger services and scheduled cargo services in more than 200 destinations across the world. The company is the world's largest cargo carrier and ranks 4th amongst the world's best airlines of 2019. Cathay Pacific along with its sister airline- Cathay Dragon, operates 206 aircraft till date. Cathay Pacific owns 18.13% of Air China Limited (“Air China”) and is also a major shareholder in AHK Air Hong Kong Limited (“Air Hong Kong”). Thereby utilizing the SWOT tool to understand further about factors that continue to strengthen the company and to foresee the opportunities that Cathay Pacific has in its external environment that can be incorporated to achieve sustainable growth and progress. The SWOT reports bestow intelligence on the internal weaknesses and threats from the macro environment that can hurt Cathay Pacific's business model and growth trajectory.
Cathay Pacific is in the aviation market for the past 7 decades and all this while the company's major strengths have been its impeccable dedication towards the following aspects: providing quality services to consumer, focused on the patron's demand and leveraging the same, high-quality training and facilities to employees, technology-based improvisations, no compromise in safety etc.
One of the major weakness of Cathay Pacific is the fluctuating fuel prices which have caused huge losses to the company. Another noted weakness of Cathay Pacific is the fleets are costlier and is mostly targeted to a confined niche of audiences belonging to middle and upper middle classes.
The external analysis highlights certain opportunities like expanding international routes and destinations, increasing demand for international travel, improving lifestyles demands quality facilities and luxury travel etc. These opportunities can be incorporated by Cathay Pacific to further strengthen the company.
The aviation industry is one of the most competitive industry and Cathay Pacific is prone to stiff competition and threat from luxury brands offering better services and local competitors offering flights at cheaper rates.
The SWOT analysis for Cathay Pacific is presented below in the SWOT Matrix followed by detailed analysis:

Strengths	Weaknesses
1. Strong brand equity and customer experience 2. Presence across regions leading to increased synergies of operations 3. Huge fleet and mix of aircrafts leading to optimum utilization of fleet based on demand conditions 4. Code sharing agreements along with membership in OneWorld alliance	1. Weak financials due to high leverage 2. Future finance leases liabilities leading to limited scope for future expansion 3. Cost reduction initiatives leading to unpleasant measures
Opportunities	Threats
1. Emerging market growth potential which would be the future growth driver for the company 2. Technology backed services leading to improved operations and reduced costs 3. Expansion in air freight sector in cargo hubs like Dubai	1. Intense competition in both domestic and international segments 2. Volatility in jet fuel prices which is significant operating expense for the company 3. Regulatory issues pertaining to continuing operations in both domestic and international segments

Detailed SWOT Analysis of Cathay Pacific

Headway in technology is a boon to almost every industry, especially companies operating in the airline industry can incorporate the current technological trends like Artificial Intelligence, Robotics, IoT, Biometrics, Technological revolution in baggage space etc. to scale up their business models. The airline industry plays a significant role in globalization and contributes to the growth of national economies. The PESTLE analysis manifests a discussion on the other external influencers specifically political, economic, social, technological, legal and environmental, their consequence on the airline industry and extensively on the Cathay Pacific group, its market strategy, and growth trajectory. The PESTLE / STEEPL / PEST analysis report is a structure to explore the consequence of external factors on the macro environment that influences the business of the Cathay Pacific. The PESTLE analysis is a useful technique to study the impact of influencers on the Cathay Pacific's business model and its business case.
Cathay Pacific is the flagship carrier of Hong Kong and hence shoves a huge responsibility and is constrained to political and legal matters of International, Federal, State, and Local government bodies. The important political and legal factors that influence the entire aviation industry and broadly Cathay Pacific are; stress due to terrorist activities, China and USA political tensions, government’s policies for passenger safety and security. Cathay Pacific has witnessed satisfactory growth in revenue due to improving passenger yield and growth in both volume and yield of cargo business. This infers that the chief economic factors like GDP, the disposable income of travelers, economic stability of a country, fluctuating fuel prices etc., to a certain extent are favorable to the company.
Cathay Pacific showcases its dedication towards Hong Kong not only through investments in improving the economy of the country but by taking up social responsibilities by involving itself in community welfare initiatives. Some notable initiatives are collecting funds from passengers and working in collaboration with UNICEF, conducting an educational programme called 'I Can Fly' for Hong Kong students interested in aviation study, volunteering program to provide social services to Hong Kong community etc.
As mentioned earlier in the report advancement in technology and trending technological factors have a huge influence and opportunity for the entire airline industry. Cathay Pacific's fleets are equipped with exceptional comfort and technology. Cathay Pacific launched its first Airbus A350-1000 aircraft with longer range and capacity in 2018, and the company promises to deliver more of A350-1000 and 21 x 777-9 aircraft in 2019. With its new brand 'Move Beyond' Cathay Pacific also aims at delivering Wi-Fi connectivity on all flights by the of end 2019, inflight entertainment content and new Economy class seats.
Cathay Pacific claims to take up its environmental responsibility seriously. The company is committed to achieving sustainable solutions such as improved fuel efficiency, use of biofuels and reviving its fleet to have a minimal impact on the environment.
The PESTLE/ STEEPL / PEST analysis for Cathay Pacific is presented below in a nutshell followed by detailed analysis:

Political	Economic
1. Political unrest in major markets may result in decrease in traffic	1. Low oil price environment reducing fuel costs 2. Strong dollar making Hong Kong expensive destination
Social	Technological
1. Training programs and workshop for young graduates 2. Initiatives to reduce illegal trafficking and track supplier compliance	1. Investment in data analytics and mobility to improve customer experience 2. Introduction of internal social media platform
Legal	Environmental
1. Antitrust proceedings in various jurisdictions	1. Emissions trading and carbon reduction initiatives

Detailed Pestle Analysis of Cathay Pacific

1) Strategic tools like SWOT and PESTLE help analyze major internal and external factors influencing the airline industry at large, specifically Cathay Pacific.
2) The SWOT and PESTLE report constitutes of SWOT Matrix and PESTLE Matrix to obtain a quick glimpse of the internal and external strategic factors accompanied by detailed analysis.
3) The SWOT Analysis of Cathay Pacific reveals the company's major strengths and opportunities from its external environment that can be consolidated to further strengthen the company. The report also bestows intelligence on Cathay Pacific's internal weaknesses and external threats.
4) Review of strategic initiatives that were taken by Cathay Pacific, to attain a competitive advantage over its rivals and achieve a sustainable position in such a highly competitive environment.
5) Cognizance of current technological trends in the aviation industry and its influences on the Cathay Pacific.
6) The PESTLE analysis of the airline industry helps to understand the constituents that impact the aviation market.
7) The PESTLE/ PESTEL/ STEEPL Analysis covers a comprehensive analysis of all external factors, specifically of influencers like political, economic, social, technological, legal and environmental and highlights their outcome on the operation of Cathay Pacific.
8) Intelligence on Cathay Pacific's business model and business diversification. It further expands into the key business segments and gives an elaborate view of the business case study.
9) A concise case of Cathay Pacific’s founders, headquarters, turnover, revenue, subsidiaries, and employee strength. This is accompanied by a comprehensive company analysis to obtain insights into company information, company profile, business model, business strategy, and marketing strategy.
10) Holistic information on Cathay Pacific's share price, mergers and acquisitions, strategic partnerships and alliances that the company subscribed to accomplish its business aims or synergies.
11) Study of Cathay Pacific’s USP or unique selling proposition, mission statement, and vision statement that the company has envisioned to excel in the aviation industry.
12) A peek into the Cathay Pacific's chief performance indicators, core values, success factors, value proposition, and core competencies.