Cathay Pacific Doing More with Less

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  • Topic: Oneworld, Cathay Pacific, Airline
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Lecture 16
Cathay Pacific Doing More with Less

Announcements
•  Final Exam vote

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Final Exam Outline
•  8-11am, Wednesday June 13 •  Half short and long answers on theory and principles from course •  Half case-study •  Open or closed book???

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Cathay Pacific Characteristics
•  Mid-tier airline •  15,000 staff, 77 wide body aircraft •  Old airline – 50 years history –  Vulnerable to cost cutting airlines

•  Global everywhere except China
–  Lost landing rights in 1984 –  Geographically next to largest market but cannot access

•  Excellent reputation for service •  Historically profitable •  Joined OneWorld alliance, increasing USA flights 30% 4

IT at Cathay Pacific: 1970s
•  Standalone development and operations activity •  Strategic value, attracted best IT staff •  Homegrown reservation system sufficiently good that Cathay sold to other Asian airlines •  Large computing center, 10-12 mainframes running 24/7 •  Independent with large no. of developers •  Fun place to work •  IT building leading-edge systems, valued in company (still there as legacy today)

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IT at Cathay Pacific: mid/late 1980s
•  From develop/operate to acquire and manage •  IT no longer used to differentiate •  SITA handle complex telecom needs globally –  Telecom is often first IT area to be outsourced

•  Began move from design and coding to acquiring packages and deploying •  Department name changes from “systems development and support” to “systems delivery” •  Emphasis on faster, cheaper, lower risk installations •  Less exciting employer for young tech staff •  Operations expanded to three data centers •  Issues of control intensified with 1991 fire in data center •  Mid-size player and IT not sustainable competitive advantage –  IT more of a necessity –  Challenge to be quick follower instead 6

IT at Cathay Pacific: 1990s
•  Continued trend from 80s •  Already outsourcing other core functions such as medical clinics, elevator repair for...
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