Cathay Pacific will become the fifth-largest foreign airline in New York City in 3/2014 when it adds daily HKG-EWR service, complementing its existing four daily services to JFK, three served non-stop and one via YVR. EWR has a different catchment area than JFK, and the new flight is ideally timed for connecting traffic around Asia, and Cathay will be targeting that broad market as well as residual premium demand after Singapore Airlines exits the EWR-SIN non-stop market in Oct-2013.
Premium traffic is rebounding the strongest out of North America for Cathay. That rebound combined with lower capacity as 777-300ERs replaced 747-400s lead to 14% yield growth in North America in 1H2013. Yet Cathay's decision to add capacity to familiar markets reflects its risk-averse approach. This contrasts to Cathay's North Asian peers becoming more dynamic, opening secondary cities and turning their attention to the under-served Asia-Latin America market. Cathay is showing some signs of breaking through inertia as it considers a passenger service to DFW, an under-served area and the key hub for strategic partner American Airlines.