Greater Bay Airlines To Bring More Competition to Cathay Pacific, but Not a Game Changer

The grant of license to Greater Bay Airlines is set to introduce more competition to the Hong Kong air travel market, but we expect limited impact to Cathay Pacific. In the near term, with Cathay operating at 2% of its seat capacity, its performance is largely at the mercy of the pandemic and thus, competition is not an immediate issue. In the long run, we expect Cathay to retain an overwhelming advantage over its Hong Kong-registered competitors in terms of capacity and flight routes. We keep our assumptions unchanged and maintain our HKD 7 per share fair value estimate.