Business Activities

AIRLINES
Cathay Pacific Airways Ltd.
Cathay Pacific is an international airline registered and based in Hong Kong that offers passenger and cargo services to almost 120 destinations around the world. It is one of the world's leading airlines, with a reputation for high standards of service, product enhancement, and maintaining one of the most modern fleets in the skies.

Swire Pacific is the principal shareholder in Cathay Pacific, with 40%, and John Swire & Sons provides management services to the airline. The other major shareholders are CITIC Pacific and Air China. In 2006, the airline's 60th anniversary year, a major share restructuring saw former associate Dragonair become a wholly owned subsidiary of Cathay Pacific, with Cathay Pacific and Air China eventually holding 17.5% of each other's shareholdings. This landmark deal has created one of the airline industry's strongest groupings, dovetailing the international network operated by one of the world's foremost carriers with that of Asia's leading regional airline, and giving the enlarged Cathay Pacific group unrivalled access to, and opportunities for growth in, Mainland China. Cathay Pacific now holds 18.1% equity interest in Air China.

In 2007, Cathay Pacific was named ‘'Airline of the Year' in the TTG Travel Awards; the airline was awarded this honour by Air Transport World magazine and London based global travel and transport information company OAG in 2006.

Cathay Pacific Airways was founded in 1946 by two former World War II pilots, who began operating on a charter basis using two war-surplus DC3 'Dakotas' flying between Hong Kong, Shanghai and Macau. In 1948, Swire acquired a management stake in the airline, and under the group's guidance the airline has gone from strength to strength.

By 1959, Cathay Pacific was flying to Japan, Taiwan and Australia. The airline acquired its first jet aircraft, the Convair 880M, in 1962 and continued to build its regional route network. In 1970, a decision was made to re-equip the fleet with Rolls-Royce powered Boeing 707 aircraft, setting the airline on course for services to the Middle East in 1976. The arrival of the Boeing 747-200 - and subsequently, the -300 and -400 - enabled the airline to launch important long-haul routes such as London in 1980 and Vancouver in 1983.

The airline's expansion and modernisation continued through the 1990s, as Cathay Pacific progressively replaced its L1011 TriStar fleet with Airbus A330s, Boeing 777s and Airbus A340s. Today, the airline's passenger fleet includes Boeing 777-200, -300 and –300ER (extended range) aircraft, Boeing 747-400s, and Airbus A340-600, A340-300 and A330-300 aircraft. The airline also operates a dedicated cargo fleet of Boeing 747-400F and -200F freighters, and 747-400BCF 'Boeing Converted Freighters'. Cathay Pacific was the first airline in the world to take delivery of the new 747-400BCF in December 2005, helping Boeing with the development of the conversion programme. The airline currently has over 50 passenger and cargo aircraft on firm order, including Boeing 747-8F and Boeing 747-400ER freighters, and by 2012 its fleet will have grown to 155 aircraft.

Cathay Pacific is committed to strengthening Hong Kong's position as a global aviation hub and gateway to Mainland China, leveraging its network to enhance business, tourist and cargo traffic flows. Cathay Pacific has invested more than US$1 billion at Hong Kong International Airport (HKIA) - more than any other company. This includes the development of its headquarters, Cathay Pacific City, which serves nearly 4,000 permanently based staff and over 9,000 cabin and cockpit crew. The airline offers unrivalled passenger facilities at the airport, including preferred check-in and boarding gates, as well as its two award-winning First and Business Class lounges, The Wing and The Pier. At 4,500 square metres, the Wing is one of the largest lounge complexes in the world and features the longest airport bar, while The Pier offers six unique daybreak rooms. In the first quarter of 2008, the airline’s subsidiary, Cathay Pacific Services Ltd. (CPSL) was awarded a 20-year franchise to build and operate a cargo handling facility at Hong Kong International Airport. Cathay Pacific will invest HK$4.8 billion in the new facility, which will have an annual throughput of 2.6 million tonnes and is scheduled to come into operation in the second half of 2011.

Cathay Pacific is dedicated to pursuing technological excellence in the products and services it offers. The airline was one of the first to provide inflight email services. It also offers online ticketing and check-in, a downloadable timetable, and the notiFly flight paging service, which delivers real-time flight information updates to customers via email or on their mobile phones. The iPermit scheme enables Taiwan residents to apply for Hong Kong visas via the Internet and collect them upon arrival at HKIA. Cathay Pacific's inflight entertainment system, Studio^CX, offers more than 20 video channels and an audio/video on demand system for First and Business class passengers.

Cathay Pacific is a member of the oneworld global alliance, together with American Airlines, British Airways, Finnair, Iberia, Japan Airlines, Lan, Malev Hungarian Airlines, Qantas and Royal Jordanian Airlines. The oneworld carriers' combined network serves more than 700 destinations in 150 countries and territories. Cathay Pacific is also a member of Asia's leading travel reward programme, Asia Miles.

Hong Kong Dragon Airlines Ltd. (Dragonair)
Cathay Pacific Airways and Swire Pacific first acquired interests in Hong Kong-based Dragonair in 1990. Today, this highly regarded, award-winning international airline, which celebrated 20 years of operation in 2005, is wholly owned and managed by Cathay Pacific.

Dragonair serves more than 30 passenger destinations across Asia with one of the youngest and most advanced passenger aircraft fleets of its kind in the region. The airline flies to more cities in Mainland China than any other non-Mainland airline, providing unique access to the Mainland for travellers and shippers. Dragonair is a member of the oneworld global alliance.

Dragonair launched an all-cargo operation in 2000. Today, Dragonair Cargo's network spans the markets of Europe, the Middle East, the United States, Japan, Taiwan and Mainland China, and enhances Hong Kong's position as a major trans-shipment centre for cargo. Cargo is now a significant part of Dragonair's business, with further expansion planned.

AHK Air Hong Kong Ltd.
Air Hong Kong is an all-cargo carrier, based in Hong Kong. In 2002, DHL acquired a 40% shareholding in Air Hong Kong from Cathay Pacific Airways, which retains 60% of the carrier. Under this arrangement, Air Hong Kong operates express cargo services to major Asian cities on behalf of DHL. Air Hong Kong currently has eight Airbus A300-600F 'General Freighter' aircraft operating on Asian routes, including Incheon, Kansai, Narita, Taipei, Singapore, Penang and Bangkok. It also operates to Shanghai under a wet lease arrangement with Cathay Pacific.

CATERING SERVICES
Cathay Pacific's wholly owned catering services division is an integral part of the airline's successful operations. Cathay Pacific Catering Services (CPCS) operates six flight kitchens in the Asia Pacific region, with a total capacity of 173,000 meals per day, and caters to more than 64 airline carriers.

Drawing on over 50 years of experience in the field of airline catering in Hong Kong, CPCS manages and has majority shareholdings in flight kitchens in Hong Kong, Vancouver and Toronto. The company manages and has minority shareholdings in catering units for China Pacific Catering Services in Taipei, Vietnam Air Caterers in Ho Chi Minh City, and Cebu Pacific Catering Services Inc. in the Philippines.

Cathay Pacific Catering Services (H.K.) Ltd. (CPCS)
Cathay Pacific Catering Services (H.K.) Ltd. caters for 36 international carriers and produces on average 58,000 meals per day, accounting for about 68% of the market. With a floor area of 51,000 square metres, it is Hong Kong's largest flight kitchen, and one of the world's most sophisticated.

The business originated in the 1960s with Air Caterers Ltd., a successful co-operative venture between Swire and Hongkong & Shanghai Hotels. Later renamed Swire Air Caterers Ltd., the company rapidly became one of the leading commercial air caterers in Hong Kong, combining the hotel group's top-quality culinary skills and Cathay Pacific's in-flight catering expertise. The operation is now wholly owned by the airline.

ENGINEERING AND MAINTENANCE
Hong Kong Aircraft Engineering Co. Ltd. (HAECO)
Founded in 1950, following a merger between Swire's Pacific Air Maintenance & Supply Co. (established in 1947) and Jardine Air Maintenance Co., HAECO draws on more than half a century of aircraft engineering expertise. Listed on the Hong Kong stock market since 1965, the HAECO group employs a total of some 8,700 staff, of which 4,600 are in Hong Kong.

HAECO is the only service provider of both base and line maintenance at Hong Kong International Airport (HKIA) and is Asia's largest aeronautical engineering company in terms of capability. Operating in an intensely competitive environment, HAECO's line maintenance activities range from aircraft cleaning to full technical log certification and aircraft release. The company provides round-the-clock ramp handling and maintenance services for 60 major airline customers in addition to its scheduled Hong Kong base customers, handling an average of 90,000 flight movements a year.

HAECO's base maintenance division provides airframe heavy checks, major structural, avionic and cabin modifications, refurbishment and painting. The company's 19,400 square-metre maintenance hangar can accommodate three Boeing 747 aircraft, plus two additional widebodied aircraft at one time, using mobile docking systems. A second, 13,000 square-metre hangar came into operation at the end of 2006. It can accommodate three wide-bodied aircraft and have the capability to undertake all maintenance and modification work currently handled at HKIA.

Construction of the third hangar, which will focus on light maintenance and accommodate two wide-bodied aircraft, is scheduled to be completed by mid-2009. A further agreement with the Hong Kong Airport Authority provides sufficient land for a fourth hangar in due course.

HAECO's expertise on the latest generation twin-engine aircraft such as the Boeing 777 and Airbus A320, A330, A340 series, covers all maintenance, modification, personal inflight entertainment systems and avionics. HAECO has advanced expertise in Boeing 747 freighter conversion, from combi to all-freighter configuration and has completed a number of conversions for international airlines.

HAECO is a specialist in the overhaul of hydro-mechanical and avionics components. In addition to brakes, constant speed drives, integrated drive generators and a wide range of fuel and hydraulic components, its overhaul capabilities extend to landing gear and high-flow, high-temperature pneumatics. The company's technical services department evaluates damage due to accident, fatigue or corrosion and provides in-house design for structural repairs and cabin re-work. HAECO holds design approval from the Hong Kong Civil Aviation Department in this field.

The Technical Training Department offers training from apprenticeships to full Level III type courses, and training courses are provided for staff within the organisation, as well as for customer airlines and other maintenance organisations.

HAECO has a 100% interest in HAECO ATE Component Service Ltd., which provides computerised testing of components. It also owns 49% of Goodrich Asia-Pacific Ltd., a company that refurbishes carbon brakes and overhauls wheel hubs at Fanling in Hong Kong.

In 2007, HAECO established Singapore HAECO Pte Ltd (SHAECO), a wholly owned MRO (Maintenance, Repair and Overhaul) facility at Singapore’s Changi International Airport.

HAECO Sharjah Aircraft Maintenance Company Limited (HS-AECO), a joint venture with Air Arabia, operates an MRO at Sharjah Airport, specialising in Airbus A320 aircraft.

Hong Kong Aero Engine Services Ltd. (HAESL)
HAESL provides repair and overhaul services for 'large fan' civil aero engines and their components, to airlines in Hong Kong and elsewhere in the world. A joint venture between HAECO (45%), Rolls-Royce (45%) and SIA Engineering Co. (SIAEC) (10%), HAESL combines the strength and experience of two of Asia's most successful aircraft maintenance, repair and overhaul companies with a worldleading name in the development and manufacture of gas turbine engines.

HAESL started operations in 1997, initially taking over HAECO's engine overhaul operations. It is now a leading repair and overhaul facility for Rolls-Royce's range of RB211 and Trent engines. Located in Tseung Kwan O, in Hong Kong's New Territories, the company operates from an advanced US$120 million facility, which, following the Phase 4 expansion in 2007, will provide overhaul capacity of 220 engines per year. It is also equipped with one of the largest test cells in Asia - capable of testing engines generating up to 130,000 pounds of thrust.

The company has significant component repair capability - up to 90% on components from the engines that it overhauls. Additionally, it has developed 'Centres of Excellence' (CoE) supporting fan blade, turbine blade, HP/IP bearing support, and honeycomb repairs on components from Rolls-Royce engines around the globe. HAESL's honeycomb and HP/IP bearing support repair CoEs were the first in the world to achieve 'Gold' accreditation from Rolls-Royce in 2005. The turbine blade CoE subsequently achieved 'Gold' accreditation in 2006.

HAESL has a 20% interest in Singapore Aero Engine Services Pte Ltd. (SAESL), a similarly sized facility established in the city-state with partners SIAEC and Rolls-Royce in 2000, and specialising in overhauling Rolls-Royce Trent engines.

CARGO HANDLING
Hong Kong Air Cargo Terminals Ltd. (Hactl)
Hong Kong Air Cargo Terminals Ltd. (Hactl) is the leading air cargo terminal operator in Hong Kong. The company operates SuperTerminal 1, the largest and most technologically advanced air cargo terminal in the world. This integral part of Hong Kong International Airport has set new standards for the global air cargo handling industry, providing services to more than 90 airlines and over 1,000 freight forwarders. SuperTerminal 1 has a potential handling capacity of 3.5 million tonnes per annum, supporting Hong Kong's robust air cargo market. The terminal integrates advanced industrial automation technology into its cargo handling systems, enabling Hactl to provide service reliability and efficiency that is internationally acclaimed.

SuperTerminal 1's six-storey main terminal building has a total floor area of 288,000 square metres, and houses a comprehensive range of cargo handling facilities, including a Perishable Cargo Handling Centre, Dangerous and Radioactive Goods Store, Valuable Cargo Handling Centre, Refrigeration Centre, Outsize Cargo Handling Facility, and Live Animal Rooms. It also has a twostorey Express Centre, which provides a further 40,000 square metres dedicated to express cargo handling.

Hactl handled 2.63 million tonnes of air cargo in 2007. In addition to physical cargo handling, Hactl also provides an extensive range of customer-driven services, including documentation handling, freighter ramp handling and logistics support services.

Hactl's wholly owned subsidiary, Hong Kong Air Cargo Industry Services Ltd. (Hacis), offers a range of logistics and intermodal solutions to streamline the supply chain, connecting Hong Kong International Airport with a network of Inland Cargo Depots located around the Pearl River Delta region via customs-bonded consolidated trucks.

GROUND SERVICES
Hong Kong Airport Services Ltd. (HAS)
HAS provides essential ground services at Hong Kong International Airport through its ramp handling franchise and exclusive airside bussing franchise. HAS is a joint venture formed in 1996 between Cathay Pacific Airways (70%) and Dragonair (30%).

Employing nearly 2,000 staff, HAS is responsible for aircraft loading and unloading, baggage handling, and cargo and mail delivery. In addition, HAS provides load control and crew transport. HAS serves 32 airline customers and has maintained over 53% market share in an increasingly competitive environment.

Vogue Laundry Service Ltd.
Vogue Laundry is Asia's largest singlesite laundry plant, with a client base of over 20 airlines and 25 hotels and many well-known clubs, restaurants and institutions.

Wholly owned by Cathay Pacific Airways, Vogue Laundry has one production plant and 21 retail outlets in Hong Kong, in addition to an in-house laboratory, supplying fabric-related technical services. The company employs over 600 staff and provides a comprehensive range of laundering and dry cleaning services, with an annual output of 36,500,000 kg.

As a member of the Drycleaning & Laundry Institute International and Textile Rental Services Association of America, Vogue Laundry has direct access to the world's most up-to-date technology in fabric care. It is the only laundry in Hong Kong with ISO9001, ISO14001, OHSAS18001 and Q-mark service scheme accreditation.

Mainland China

Taikoo (Xiamen) Aircraft Engineering Co. Ltd. (TAECO)
Taikoo (Xiamen) Aircraft Engineering Co., HAECO's Mainland China associate, was formed in 1993 with HAECO as its major shareholder.

TAECO's five double-bay Boeing 747-size hangars at Xiamen's Gaoqi International Airport provide airframe maintenance on wide-bodied aircraft. A sixth double-bay hangar is scheduled for completion in early 2009. This will make TAECO one of the largest facilities for heavy aircraft engineering maintenance in the world.

TAECO is one of only a handful of facilities in the world licensed by Boeing to carry out conversions on its 747 aircraft from passenger to full freighter configuration, and since 2004 has partnered Boeing in its 747-400 Special Freighter conversion programme. The company also provides line maintenance services to customers at Beijing, Shanghai and Xiamen airports. In 2006, TAECO and major shareholder HAECO signed a Letter of Intent with Guangdong Airport Management Corp. to develop a maintenance facility in Guangzhou.

TAECO is currently working with Airbus to establish a cabin completion centre in Mainland China for Airbus corporate and business jets. When this cooperative project is completed in 2009, TAECO will seek certification from the European Aviation Safety Agency, with the aim of becoming an Airbus supplier.

TAECO (Xiamen) Aerospace Company Ltd.
Established in 2007, it aims at providing one-stop-shop solution that integrates the design, manufacture and trading of PMA parts in China / Asia. It holds the General Administration of Civil Aviation of China CCAR Part 21 PMA approval; and the Hong Kong Civil Aviation Department HKAR-21 PMA approval which enable TAECO (Xiamen) Aerospace Company Limited to design and manufacture aircraft parts for airlines in the region.

TAECO GA Aviation Services LLC
Established in 2007 in the U.S.A., it aims to provide FAA PMA approval technical and certification support for TAECO (Xiamen) Aerospace Company Limited.

Goodrich TAECO Aeronautical Systems (Xiamen) Co. Ltd.
This company is a joint venture between TAECO (35%) and Goodrich (65%), and operates a repair and overhaul facility at Xiamen for engine and flight control systems, electrical power generation and other aerospace equipment.

Honeywell TAECO Aerospace (Xiamen) Co. Ltd.
This company is a joint venture between HAECO (25%), TAECO (10%) and Honeywell International Incorporation (65%). The company operates a repair and overhaul facility at Xiamen for aircraft components, including hydraulics, pneumatics, avionics, APUs and other aviation equipment.

Taikoo (Shandong) Aircraft Engineering Co. Ltd. (STAECO)
This company is a joint venture partnership formed in 1999. TAECO and HAECO are both shareholders. Located in Jinan, the provincial capital of Shandong, in Mainland China's northeast, it is a four-hangar facility that can accommodate seven Boeing 737/A320 series simultaneously. It directly complements TAECO's own wide-body operation at Xiamen in the south. In 2005, STAECO formed an alliance with TAECO and US-based Pemco Aviation Group, establishing a cargo conversion partnership for Mainland China and the Asia Pacific region; the partnership aims to focus initially on Boeing 737-300 aircraft.

Taikoo (Xiamen) Landing Gear Services Co. Ltd. (TALSCO)
This company is a joint venture partnership formed in 2007. TAECO (10%) & HAECO (50%) are both shareholders. It is the first landing gear services provider with full capabilities in China, specialized in Boeing aircraft gear B747, B737, B767 and B777.

Taikoo Engine Services (Xiamen) Limited (TEXL)
TEXL operates a GE90 engine overhaul facility at Xiamen's Gaoji International Airport under a 22-year branded service agreement with GE. The company is majority owned by HAECO (75%), while TAECO and Cathay Pacific Airways own 10% and 9.9% shareholdings respectively. TEXL’s assets include an advanced engine test cell capable of accommodating the full range of GE engines.

Canada

CLS Catering Services Ltd.
Cathay Pacific has a 60% shareholding in two inflight catering facilities in Vancouver and Toronto, in partnership with LSG Lufthansa Services. The two facilities have the capacity to produce 15,000 and 25,000 meals a day respectively.

Taiwan

China Pacific Catering Services Ltd.
This flight kitchen business is a subsidiary of China Airlines, in which Swire Pacific has a 22.7% effective interest. Located adjacent to Taipei's Taoyuan International Airport, the company's highly automated facilities have the capacity to produce up to 30,000 meals a day. Currently, the kitchen serves 13 international airlines in addition to China Airlines and Cathay Pacific Airways. The company also provides outside catering and terminal catering services.

China Pacific Laundry Services Ltd.
This linen and garment-laundering specialist is a joint venture between Swire Pacific Ltd. (45%) and China Airlines (55%). From its large, modern facilities near Taoyuan International Airport, the company serves a rapidly expanding customer base that, in addition to airlines, includes hotels, fitness centres, and urban and country clubs.

Vietnam

VN/CX Catering Services Limited
Cathay Pacific Catering Services has a 40% shareholding in this joint venture with Vietnam Airlines. The company has a daily capacity of 20,000 meals, and serves some 18 airlines.