Cathay Pacific Airways
1.1 The Airline Business
Cathay Pacific Airways has one of the youngest and most efficient fleets of any major airline, and features some of the most technologically advanced aircraft from the world’s leading aircraft manufacturers Boeing and Airbus Industry. To Cathay Pacific, a great flight is not just about a smooth check-in, good food and comfortable seat, but it is about anticipating what a customer wants before they need to ask for it (“Cathay Pacific Airline Website”, 2009).
The airlines was founded in Shanghai, China on September 24, 1946 by two ex-air force soldiers, Roy Farrell and Sydney de Kantzow, who each put up HK to register the airline. The name “Cathay” was derived from an ancient name give to China, and “Pacific” because they believed that they would one day fly across the Pacific to the United States. The company initially flew routes between Hong Kong, Sydney, Manila, Singapore, Shanghai, and Guangzhou, while scheduled service was limited to Manila, Singapore, and Bangkok only (“Cathay Pacific”, 2009). It has dedicated it service to providing fast and reliable performance throughout the West Indies and the world, and today, Cathay Pacific continues to maintain that standard with 14,000 employees and 87 aircrafts. Cathay Pacific serves 43 destinations throughout Asia, North America, and Europe with the major hub in Hong Kong. With dedicated service and 167 daily departures, Cathay Pacific Airlines has proven itself as a leader in world travel (“Cathay Pacific”, 2009).
1.2 Company Stakeholders
In Cathay Pacific Airways, there are numerous stakeholders. Actually, there are two different types of stakeholders within the said airline i.e. the internal and external stakeholders. In the internal stakeholders, employees, owners and company managers are included. On the other hand, external stakeholders are people engage in the company but not actually part of it. For instance, the customers, suppliers, shareholders, creditors and the government are known as external stakeholders of Cathay Pacific. In Cathay Pacific there is also some type of stakeholders known as Market (or Primary) Stakeholders. These are the people that engage in economic transactions with the business (e.g. stockholders, customers, suppliers, creditors, and employees). Apparently, the NonMarket (or Secondary) Stakeholders of Cathay Pacific are those who - although they do not engage in direct economic exchange with the business - are affected by or can affect its actions (e.g. the general public, communities, activist groups, business support groups, and the media).
From the said list, the main stakeholders of Cathay Pacific are:
a. Customer – these are the people riding in Cathay Pacific.
b. Employees – aircraft mechanics, pilot, stewards, traffic manager, etc.
c. Owners/CEO/Board Members
d. Supplier of Aircraft stuff (e.g. oil, gasoline, aircraft parts)
e. Government – Different country governments in which Cathay Pacific flies e.g. Hong Kong, Australia, Philippines Singapore, Shanghai, and China.
1.3 Business Procedure
The Cathay Pacific Airways is innovating and improving their marketing communications strategies to effectively establish their reputation in terms of their service in the market. Actually, there are numerous business processes in the organization. However, the five core procedures in Cathay Pacific Airways are engage in:
Due to the fast-changing technology, more and more companies, including airlines invest on new information systems and innovative technology. In this way, they can serve their customers better, and even cater to the needs of their employees, in terms of faster and effective communication and efficient service.
In 2001, Cathay Pacific Airways invested more than 0 million in e-business, and a part of that change in the company’s strategic direction was to implement an e-learning environment called the “Learner’s World”. The e-learning environment would help Hong Kong-based Cathay Pacific deliver learning to more than 14,000 employees. Graham Higgins, the manager of the Learning and Development Group at Cathay Pacific, said that the training function at the company is made up of eight physical training centers, which are autonomous, with each training center based on a different department. The focus of the program is to ensure that employees reach high levels of professional performance as well as to build a culture of innovation and collaboration. In addition, when the airlines started focusing on its e-business strategy, it also began implementing its e-learning strategy within the company to build the airline’s learning management system. It manages the employees learning process, from enrolling learners and tracking their progress through delivering tests and reporting costs, and through Learner’s World, the airline employees have open access to a wide range of learning options, from online tutors and virtual classrooms to in-class training (Hollis, 2009). Moreover, this program will be beneficial for the airline’s employees for the design of their learning experiences are consistent with the service experiences for their customers, such as their choice, control, customization, and community, and have reengineered every aspect of employee experience the company can leverage, including their benefits, performance management, career development, learning, and many others. It also defines a culture of self-responsibility to get courage to innovate and openness to collaborate, for a more effective communication and success (Hollis, 2009).
This strategy of Cathay Pacific is surely beneficial for the company, for the program will not only add learning and knowledge to the employees, but also enable them to communicate effectively with each other. In this type of industry, communication is one of the best strategies to develop and improve, for without effective communication, it would be hard for the company to function. In addition, with effective communication brought about the program, the company can ensure that their employees have the first hand information in training and development, which would be useful in rendering services to their customers. With the use of the program, the company can properly and effectively assess and evaluate the need for improvement in the company, such as identification of internal and external problems, conceptualization of marketing projects and plans, and implementation of new production strategies and regulations. Moreover, with the e-learning program, the company can effectively apply some key strategies related to advertising, direct marketing, promotions, public relations, sales and online marketing. With advanced technology, the company can endorse and introduce their innovations more openly to the consumers, which would lead to increase in sales and profit of the airline company.
As their future marketing strategy, staring January 2007, Cathay Pacific will be phasing a new seat design and cabin interiors with enhanced in-flight entertainment options. One of the most important features common to the business and economy classes is the new three-point seatbelt design, which was previously used on business jets only, and this design will offer increased stability at take-off and landing (“Cathay Pacific”, 2009). Cathay Pacific Airways features three classes, namely the First Class, the Business Class, and the Economy Class. The new First Class seats are fully adjustable with massage function, and can be easily converted into a 36” x 81” bed, believed to be the largest provided on any commercial airline. Additional stowage space and a personal closet will also be provided, will also feature a new extendable meal table and an enhanced personal entertainment system with a fully adjustable 17” x 16.9” TV screen. The Business Class will feature suites with luxurious seats that can be converted into a 6-foot-6-inch horizontal flat bed in herringbone configuration that will also offer a four-way lumbar support and a relaxing massage. There will also be an enhanced in-flight personal entertainment system that will offer a large 15” x 16.9” personal TV and Audio Video On Demand, with the handset doubles as a personal phone. Lastly, the Economy Class seats will have a fixed back design, which allows passengers to recline their seats without intruding on those seated behind, and the new Live Black Upholstered Seats uses office chair technology to provide extra support for the spine. Features also include a larger 9” personal TV screen offers Video Audio On Demand, a larger tray table, a coat hook and a literature pocket that has been relocated to below the seat cushion, which creates more legroom for passengers (“Cathay Pacific”, 2009). The improvement of the amenities of Cathay Pacific Airways is also part of their aim to improve and develop their marketing strategies, for with the innovation and pleasant features of the airline, the company can better accommodate their passengers, and even providing them the comfort and elegance, they truly deserve. Moreover, the new features of the three different classes enable the passengers to get more than the amount they have paid for, which not only entails enjoying the trip, but also enabling the passengers experience new technologies. Aside from advertising and online promotions, the airlines would not have a hard time promoting their airlines because of the help of word-of-mouth from their passengers that would help endorse the airline to others passengers and customers.
1.4 Environmental Concerns
Environmental Aspects
a. Operate by a recognized world class standard on emission of air pollutants, even if it is not required to do so here. Diesel used by high loaders and boilers are the major sources of direct emissions produced by Cathay Pacific. Currently, all the new high loaders purchased comply with Euro 4 standard. All trucks undergo regular checks to ensure the engine should operate normally to prevent incomplete burning of fuel. Emission of boiler should be monitored by tests to ensure the combustion is normal. Cathay Pacific should only use ultra-low sulphur diesel.
b. Use continuous emission monitors (CEMs) at significant sources. The exhaust fumes of high loaders should be checked during maintenance.
c. Publish information on energy and fuel use, as well as total emissions of air pollutants annually and timely, if emissions are significant. Fuel consumption is one of the data that is being collected in Cathay Pacific including outports in our current EHS data collection regime.
d. Undertake to adopt energy-efficient measures in their operations. A number of projects should be done to reduce the energy as well as fuel needed for Cathay Pacific operations.
Environmental Aspects
1.5 Environmental Impact to Cathay Pacific Airlines’ Business Process
a. Air quality - Cathay Pacific should continue to commit to the Clear Air Charter by actions such as: Purchase high-loaders equipped with Euro 4 or latest compliant engines and conduct cleaning to the entire air ventilation system in the company on a regular basis and assess the air quality of office according to the IAQ requirements on a yearly basis.
b. Replacement of lightings - Engineering will trial LED lights in cold holds and evaluate the feasibility of replacing existing lights with LED in all cold rooms and freezers. There should be a saving on energy consumption. Evaluation will be done to verify if these LED lights can withstand such cold temperature. In addition, car park spotlights will be changed to LED lights.
c. Use of waste steam to re-heat water for ware wash machines. Engineering should conduct trial on capturing residual steam from ware wash machines, which is currently extracted and released into the environment. Instead of releasing the steam, it will be used to reheat the water fed to the ware wash machines. This will reduce fuel consumption by the boiler.
d. Cold Room Condenser -Engineering shall study the cold room condenser that is currently an air cool type and it is possibly less efficient than water cool type. Hence, cold room condenser may be changed to a water cool type for energy saving purpose. Engineering shall study the cost and benefit of this exercise.
e. End Trims Collection - QA and Production should evaluate the feasibility of having end trims of raw meat, vegetables and fruit skins collected by a local environmental recycler who will further process the food waste and donate it to pig farms. As this will introduce a waste handling charge to CPCS, cost and benefit of this activity will be carried out.
a. Reduction in the use of diesel - A Japanese product called “Fire Ball” which claimed to reduce fuel consumption by 10% was put on trial since mid November 2007 for 3 months. Cost saving was noted in hi-loaders, less diesel was used. However, smaller vehicles did not show further energy saving. Hence, adjustment of device was made and is currently on trial for small vehicles. The results of the trial will be evaluated and the use of the device will be considered in the coming year upon the outcome of the trial.
b. Less energy consumption.
c. Less air pollution.
d. Less flight risk
e. Less waste and creation of effective waste management system.
1.6 Environmental Aspects Objectives
The importance of firms’ capabilities for process innovation and implementation to complement the best practices and cost-reduction objectives of the organizations is a great possibility since varying environmental practices requires different complementary assets. As such, before deciding on specific environmental strategies to be implemented firms should be able to discern and identify the capabilities of their inherent resources to conceptualize suitable and appropriate environmental strategies. Identifying the business strategies of the business first is recommended in order to come up with the most strategic environmental strategy that will create competitive advantage to the business organization.
Meanwhile, Boiral & Sala (1998) examined the appropriateness as well as effectiveness of ISO 14001 as an environmental strategy among industries that seek to turn their waste into environmentally helpful forms. In Cathay Pacific, the objectives of such process are:
(1) to achieve the fundamental purpose of any green effort which is reducing waste discharge into the natural environment;
(2) to promise that the standard will generate measurable improvements in the environmental quality;
(3) to avoid set ceilings or any mandatory targets as it focuses highly on the means making “environmental performance” ambiguous;
(4) to avoid contradictions between the standard and the modern management trends as it adheres to the traditional management principles;
(5) to increased bureaucracy and lack of employee involvement and consultation when it comes to environmental issues;
(6) to lessen the cost and constraints dictated by the implementation of the standard and the certification process which include audit costs, allotted time for documentation, and efforts to comply with the specifications of the letter like training and communication.
(7) to take time familiarizing with the process,
(8) to assess the organizations’ needs,
(9) to evaluate the appropriateness of the process with their management philosophies, and
(10) consult with and involve personnel during all stages of development process.
1.7 Realistic and Relevant Targets
- Monitor sources, types, and amounts of wastes to be disposed by Cathay pacific for six months.
- Change to using more environmentally-friendly paint in the next year.
- Reduce losses of fuel oil through spills and leaks from storage tanks and transfer lines to less than 50 gallons per year.
- Eliminate visible exhaust emissions from vehicles, and reduce hydraulic oil leaks to less than one per year per vehicle.
- Substitute a non-toxic raw material by the end of the next fiscal year.
- Deliver a comprehensive legal awareness training program to all senior managers, department heads, supervisors, and foremen by the end of the year.
- Establish quantitative waste reduction objectives, targets, and plans for each area by the end of the second quarter 2010 to achieve a total reduction of 25% by the end of 2011.
- Implement plans by the end of the third quarter of 2010
- Monitor amounts, types, and sources of wastes going to be disposed for the next year, implementing changes to work practices where necessary to achieve desired reductions.
- Review progress, and set new objectives and targets for 2012 -2013 by end of the third quarter of 2011.
1.8 Actions for Environmental Target
- Monitor sources, types, and amounts of wastes to be disposed by Cathay pacific for six months.
a. Identify the best opportunities for solid waste reductions by end of the first quarter of 2010.
b. Classify the wastes to be disposed.
- Change to using more environmentally-friendly paint in the next year.
a. Avoid using hazardous paint materials for Airport building.
b. Avoid using hazardous paint materials for Airport signs.
- Reduce losses of fuel oil through spills and leaks from storage tanks and transfer lines to less than 50 gallons per year.
a. Gasoline/fuel tanks should be checked regularly.
b. Assign people that will check fuel/gasoline tanks.
- Eliminate visible exhaust emissions from vehicles, and reduce hydraulic oil leaks to less than one per year per vehicle.
a. Car maintenance for Cathay Pacific personnel.
b. Emission check should be done once a month.
- Substitute a non-toxic raw material by the end of the next fiscal year.
a. Building engineers of Cathay Pacific should be consulted.
b. Toxic material should be avoided. Total ban should be imposed by the official.
- Deliver a comprehensive legal awareness training program to all senior managers, department heads, supervisors, and foremen by the end of the year.
a. Assess their retention and comprehension of the material, and re-assign duties if necessary.
b. Provide awareness programs for employees.
- Establish quantitative waste reduction objectives, targets, and plans for each airport by the end of the second quarter 2010 to achieve a total reduction of 25% by the end of 2011.
a. Hire related personnel that will do the planning.
b. Airport administrator should be vigilant in implementing the plans.
- Implement plans by the end of the third quarter of 2010.
a. Hire related personnel that will do the implementation.
b. Aircraft passengers should be also notified.
- Monitor amounts, types, and sources of wastes going to be disposed for the next year, implementing changes to work practices where necessary to achieve desired reductions.
a. Do the segregation of waste. Assign personnel who will monitor amounts, types, and sources of wastes going to be disposed.
b. Review the progress of the plan.
- Review progress, and set new objectives and targets for 2012 -2013 by end of the third quarter of 2011.
a. Check if the plan for the whole year was achieved.
b. Hire related people if necessary.
1.9 Monitoring the Progress of Environmental Actions
The increasing awareness of international organizations on the protection of environment is palpable. Stainer & Stainer (1997) argue that “environmental issues are business issues” (p. 224). Protecting the environment is the battle cry of environmentalists and other groups or institutions that hold such advocacy. All efforts bloomed because environmental protection significantly takes it position and emerges into the business arena. Abreu, David & Crowther (2005) argue that an organization can affect its external environment and change it through its activities. Corporations or organizations in general are expected to have economic, ethical and legal responsibilities to the public at large (Lantos, 2001). Actually, there are different ways to monitor the progress of the environmental actions taken by Cathay Pacific. They may monitor it based on the following:
1. improved services management approaches and practices,
2. increased cycle time,
3. increased customer satisfaction,
4. improved supplier performance,
5. stronger employee relations, and
6. increased return on investments.
Multi-business organizations and firms are constantly facing pressures brought about the varying unpredictable factors that hinder efficient and effective business operations. This results to graver responsibilities faced by the business executives as board of directors; capital markets and shareholders push for effective and powerful corporate strategies. The competitive business environment within particular industries intensifies the need of business organizations to diversify the operation systems of the company recognizing the importance of t6he conglomeration of assets, skills, and capabilities of the available resources that the company has in order to be successful. Business executives maximize the value of shareholders in order to present the worth of the cooperation and participation of the different arms and departments within a business firm. For these reasons, creating corporate advantage through strategic business decisions among multi-business firm were designed and practiced for them to confront the challenges by exposing executives to state-of-the-art thinking and research on corporate- and sector-level strategy.
References
Abreu, R, David, F., & Crowther, D. (2005) Corporate social responsibility in Portugal: empirical evidence of corporate behavior, Corporate Governance, vol. 5, no. 5, pp. 3-18.
Boiral, O. & Sala, J.M. (1998) Environmental Mangement: Should Industry Adopt ISO 14001?, Business Horizons, January-February, pp. 57-64.
Hollis, E. (2009) Chief Learning Officer. Retrieved October 16, 2009, from http://www.clomedia.com/content/templates/clo_article.asp?articleid=214.
Internet. (2009) Cathay Pacific Airline Website. Retrieved October 16, 2009, from http://www.ozflights.co.uk/aircx.htm.
Lantos, G.P. (2001) The boundaries of strategic corporate social responsibility, Journal of Consumer Marketing, vol.18, no. 7, pp. 595-630.
Stainer, A. & Stainer, L. (1997) Ethical dimensions of environmental management, European Business Review, vol. 97, no. 5, pp. 224-230.
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