Management and Marketing Strategy Recommendations for Cathay Pacific Airlines

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Final Project - Cathay Pacific Airways: Strategic Airline Audit
Issues and Findings
Cathay Pacific Airways Ltd is one of the players in the airline sector, operating through both Airline Business and Non-Airline Business segments. Within the segment of the Airline Business, Cathay Pacific engages in passenger and cargo operations. In contrast, the Non-Airline Business segment is involved in airline catering, aircraft ramp handling services, as well as ground handling. On September 24, 1946, the business was founded by Roy C. Farel and Sydney H. de Kantzow and had its headquarters in Hong Kong (Forbes). While Cathay has been a seasoned player in the airline industry, recent news shows that Hong Kong's airline is facing financial woes as the new COVID-19 Delta variant continues to cause significant challenges for most of the airlines that have no domestic market (Riordan and Liu). The new variant of the virus resulted in the Hong Kong government as well as many other markets tightening its restrictions on cross-border travels and quarantine requirements. Unlike other airline businesses that have observed encouraging signs of economic recovery n domestic markets, Cathay Pacific largely relies on cross-border air travel. During the first half of 2021, the airline recorded a net loss of HK$7.6bn, equivalent to US$977m, down from HK9.9 in the first half of 2020. These performance results were a result of strong cargo operations that reinforced its business. Early in 2020, the carrier was on the brink of collapse due to the fear of coronavirus infections and several anti-government protests. However, after frantic negotiations, Cathay Pacific was able to receive a government bailout of HK$39 bn, equivalent to US$5 bn on June 9, 2020 (Tang, Tudor-Ackroyd and Sito). Situations like pandemics affect airline businesses, and there is a need to perform strategic audits to identify decisions that are relevant in specific business cases. Using strategic analysis tools, this report provides strategic management and marketing strategy recommendations for Cathay Pacific Airlines.
Strategic Marketing and Management Strategies: Analysis Tools
PESTEL Analysis
In analyzing the strategic management of organizations, PESTEL is the commonly applied tool that seeks to assess and monitor various macro-environmental factors impacting businesses. These factors are often out of direct organizational control and tend to have a lasting implication on the performance of an organization (Marketing Environment and Strategy). The identification of these factors is critical in the decision-making process where the management team deliberates on strategies to minimize threats while maximizing opportunities that an organization might have. The phrase “PESTEL” denotes the six components or macro-economic factors that impact business operations. These include political (P), economic (E), sociological (S), technological (T), environmental (E), and legal (L) factors (Rastogi 385). Firms are impacted by political factors or threats and opportunities presented by political institutions.
Key government policies such as the implementation of climate change policies can affect bu...