Cathay Pacific beats SIA in budget air woes: Bloomberg

There is less competition in Hong Kong.

A recent report by Bloomberg shows that Cathay Pacific’s shares routed those of Singapore Airlines since the global financial crisis, as the Hong Kong carrier avoided the budget-airline trap while SIA doubled down.

Over the last 5 years, Cathay shares delivered a total return of 53% compared with SIA’s paltry 6.3%. The average annual return was 8.9% for the Hong Kong carrier versus 1.2% for SIA.

In Bloomberg’s interview with Arnaud Bochet, the analyst at BNP Paribas in Singapore says that Cathay Pacific has seen very strong recovery since the global financial crisis due to the fact that competition is lower in Hong Kong. He adds that Singapore Airlines has had to deal with intense competition in the Kangaroo routes (services between Australia and Europe), particularly from the Middle East airlines, and budget carriers within Southeast Asia.