The Cathay Announcement

Many will have noticed that I have become quite animated and angry at Cathay’s announcement that they will be suspending services to Cairns on 27 October 2019. My anger is not directed at Cathay, but at those who allowed this situation to get to this point. This is a tragedy for the city for the following reasons:

• Cathay is the only full service wide bodied airline service capable of sustaining passenger and freight services to a gateway servicing the four corners of the globe;
• Cathay has stuck it out with us for over 25 years through Global Financial Crisis and the SARS epidemic;
• Cathay has been the only reliable freight carrier out of Cairns to the Chinese marketplace since its arrival;
• The economic contribution to this city is monumental. 200 tonnes of fuel each week, 40 tonnes of seafood each week and hundreds and hundreds of tonnes of horticulture and other export commodities each year. That’s just for starters and not an exhaustive list.

How did we get to this? I have long criticised the folly of subsidising new entrant airlines without a rigorous full route risk analysis and advocated that investment into new carriers on new routes be subject to rigorous contractual obligations. This position has been supported by an analysis of recent failed start/stop operations into Cairns. The position in this case is that Cathay was faced with new entrants being subsidised into operating across the route that Cathay essentially established and has maintained operations on for 25 plus years servicing Cairns. Cathay’s competitors got a free hit and left town. Now Cathay is leaving as well.

Perhaps the most galling issue in all of this is the inability of the Cairns Airport to see this situation coming. They, along with TTNQ and Tourism Queensland need to assume some level of culpability in allowing the situation to develop to this stage. To claim to have been blindsided is to ignore the reality that they failed to maintain a suitable level of communication with a major client airline to foresee the issues and understand the basics of simple route economics and the capacity constraints. This is a major corporate failure and will impact on industry and community confidence for many years.

What this issue has brought out into the sunlight is the ongoing failures of much of the corporate effort in moving this city forward. Despite the many genuine efforts by some to sugar coat the economic wellbeing of Cairns and some genuine work being done in some areas, the reality is that we are constantly being let down by  the incompetence of some who wield influence beyond their capacity to perform. There is much work to be done in attracting investment into Cairns and to have a complete overhaul of our marketing and promotion template. That has been agreed recently, and it has to be about Cairns being “Australia’s international gateway to the Barrier Reef” and linking the City as the gateway to Northern Australia. There is still work to be done.

I hope those working to have Cathay reverse their decision are successful. What a great pity that we find ourselves in this position.