The Effects of the General Environment on Cathay Pacific Airlines’ Performance in Hong Kong

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The effects of the Economic segment
-The aircrafts are highly dependent on petroleum as the starting energy and the price of petroleum is keeping increase in last few years, so the cost of operation of Cathay Pacific Airlines is unavoidably increase, and the air ticket price also need to be raised to offset the increasing petroleum cost, finally the sales of air ticket of Cathay Pacific Airlines may decrease.

The effects of the Technological segment
-As the broadband Internet connection is developing rapidly in every countries now, the management class persons can use video conference through Internet connection to launch cross-countries meeting, and they can travel by air less to save cost and time .So the sales of business class or first class air-tickets will decrease as the management of every organizations are the sales target of business class or first class air tickets

The effects of the Political segment
-China is keeping extend the “Individual Visits Scheme for traveling in Hong Kong” in more cities in China. China people are attracted by the reputation of “Shopping Paradise” in Hong Kong and they have high consuming power, so more people from China will come to Hong Kong for traveling. The sales of the air tickets will increase as the turnover of airline from cities in China to Hong Kong increase.

-China and Taiwan started the direct flights policy in 2009, and more cities in China will launch the direct airlines to Taiwan, so Hong Kong can’t enjoy the advantages of transit city between China and Taiwan, so the sales of air tickets between China and Taiwan via Hong Kong will decrease as the China and Taiwan adopt open policies in economic cooperation.

-Hong Kong and Taiwan had signed the agreement to open the airline market and extend the cargo volume between Hong Kong and Taiwan in 30/12/2011. The sales of air tickets between Hong Kong and Taiwan will decrease as Cathay Pacific Airlines can’t enjoy the oligopoly market advantages...
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