This document provides background information on Cathay Pacific Airways and discusses the fire crisis they faced at their Quarry Bay data center in Hong Kong in 1991. It overviewed Cathay Pacific's operating departments and IT systems. The fire shut down the data center for 13 hours and interrupted normal business operations. Management then considered options for relocating or rebuilding the data center for improved safety, security, reliability and room for expansion. Potential relocation locations like China, Singapore, and Australia were evaluated based on factors like infrastructure, labor, economy and time zone. Ultimately, management recommended rebuilding the data center in Hong Kong to take advantage of existing skilled labor, infrastructure and familiar government policies and environment.

1. CA 2 : OPERATION CASE STUDY
CATHAY PACIFIC AIRWAYS
JARNAIL SAINI (11604694) 44
(management student :-
operation&marketing)
lovely professional university

3. INTRODUCTION
CATHAY PACIFIC AIRWAYS
 Background:-
 Cathay Pacific is an international airline which was founded
in 1946 with two DC-3s
 Head office base at Hong Kong in asia under Swire Group.
 It operating 45 wide bodied aircraft with over 12747 staff flying
from hong kong to 39 destination in 27 countries around the
world
 It provided schedule passenger service on five continents:
Asia,North america ,australia ,Eupore and Africa
 On the regulatory framework being Hong Kong National
FlagCarrier around 1990.
 Has IT Data Center located in three cities in Hong Kong.

4. OPERATING DEPARTMENTS
 IT DATA CENTER:-
 It was divided in two main sections :
 Production Located in Quarry Bay.
 Development Located in Kowloon, Kai Tak Airport.
 Have a crucial role
 It kept track of critical business functions,like
reservation and ticketing ,engineer request ,ticket
check-in records , cargo loading ,crew rostering ,flight
schedualing,and other supporting processes.

5. CONT…
 Data center also co-ordinate other functions
such as
 Computerised reservation system(CRS)
 Passenger revenue optimisation system
(PROS)
 Customer information system (CIS)
 Executive information system(EIS)
 Human resource management system (HRMS)
 Financial management information system
(FMIS)

6. PROBLEM FACED BY AIRLINE
 Fire Crisis:-
 Fire Crisis at Quarry Bay in Hong Kong 1991.
 It shut down the data center
 Normal business was interrupted for 13 hr
95 application were shut down and had to be
backed up by tape for normal function
 Almost 500 Tasks must be done by staff and
vendors. After two weeks,the Quarry Bay office
in Hong Kong was finally restored and ready for
normal operations again

7. CAUSE OF FIRE :-
 The disaster demonstrated how vulnerable
these offices were, given their location
in crowded and multi-tenanted districts
 Data center is located in 3 different building
and there is no room for expansion

8. QUESTION ARISED BY MANAGEMENT
 What to do that this fire crises shouldn't
come in future ?
 What is the alternative of data center ?
 How to minimize the cost and make safety
and security for operating department ?
 Should data center be relocate or rebuilt ?

9. TO MOVE OR NOT TO MOVE ?
 The re-locating option:
 The co. drew an experience of other co.that had
been involve in data center move and off-shore
relocating
 Halifax insurance data center merge :help them
to reduce dramatically on hardware and
software, telecommunication and personnel
 Cathay pacific guangzhou data processing
center: handle data manually and the co.
estimated that moving the operation to china
can save HK$10 million per annum

10. CONT…
 Offer from hong kong :it is at a convenient
connection through other part of asia pacific
 Property price is high in the world as
compare to HK
 There is a growing concern that as to
economy and political stability
 But many uncertainity so co. was also
looking other country for relocation

11. CONT…
 China’s open door policy :
 Benefits : SEZ units were available in china
reduction in land use fees
,favorable
labor policy
 Disadvantage :legal framework was
underdeveloped ,and need to relocate
middle management to china but their
condition are inferior

12. CONT,,,
 Singapore:
 Benefits it located in the center of ASEAN
area along with shiping and pacific
destination
 Stable economy ,Good infrastructure
,incentives and skilled labor
 Disadvantage : expensive place to do
business,
 Monopolistic government rules

13. CONT…
 Australia :
 Benefits :21% tax wholesale tax exempted if
import of high technology, fibre optic
telecommunication ,location under time zone
,free residential visas to staff
 Disadvantage : very less industrial relation
,more of labor strike and labor unrest hurt the
economy

14. FACTOR CONSIDER FOR RELOCATION :
 Supportive infrastructure ,skilled labor
and advance and stable economy :
 China ,Singapore ,Thailand ,Philippines,
Canada and Australia were taken .but
Thailand and Philippines was eliminated due
to lack of infra,labor and unstable economy
and
 Canada was eliminated due to reverse time
zone to hong kong

15. OPTIONAL SOLUTION
Rebuild but not move:
 + Faster
 + Cheap at the beginning
 - No room for expansion
 - Less of security
 - Less reliability &
consolidation
 Rebuild &
Relocation
 + More Secure
 + More reliability &
consolidation
 +More Room
 - Initial investment more
expensive but not for the
future-
 Need more analysis for
new location & system &
environment

16. OPTIONAL SOLUTION
 High Staff Cost
 Outsource
 + Flexible -
Less sense of belonging
 + Less cost -
Lack of control
 + Simple & Transfer of R
isk - Leak of information
 In House Personnel-
More Cost + Controlling
Data-
Not simple + Have sense
of belonging
 Mixing
(SMARTSOURCE)Combi
ne the strength points of
in-house & outsource
scenario

17. RECOMMENDATION
 Rebuilt :
 Benefit : already skilled labor ,
 Known government policy
 Low cost as expert knowledge about the rival
party
 Just want to expand the data center area
because fire occurred in congested area ,
 Already have advance infrastructure ,and
middle management already habituate with the
surrounding condition other wise they also have
to move with data center