Pacific Blue and Cathay Pacific have signed a deal allowing passengers to fly long-haul from Hamilton International Airport.

Passengers will be able to travel four times a week on Pacific Blue to Sydney or Brisbane and from there, on connecting Cathay Pacific services to Hong Kong and beyond.

Cathay Pacific marketing services manager New Zealand Ian Herald said the service would be more convenient for Waikato and Bay of Plenty passengers than travelling to Auckland and would remove the hassle of worry about delays due to traffic hold-ups.

Cathay Pacific Group returned to profitability in 2009, recording a $52.7 million operating profit, up from a $369 million loss in 2008.

But although business improved in late 2009, the company is cautious in its outlook for the year, as it said business was not back to pre-recession levels and premium passengers have not fully returned.

Air New Zealand may be forced to make further moves to cut capacity after a big drop in passenger numbers and passenger load factor on long-haul routes.

The airline carried 1,242,000 passengers in the month, a 7.6% decline from March last year, although it is worth noting the timing of Easter, which happened in March last year and April this year, may have had an effect.

But despite slashing capacity by 10.2% compared to last March the airline’s passenger load factor fell by 2.8%.

Qantas and Cathay Pacific have both complained about their government-owned or backed rivals, including 80% government-controlled Air New Zealand.

The airlines are taking two vastly different approaches to dealing with this challenge, and Qantas’ call for government help could have big repercussions for Air New Zealand.

Cathay Pacific, which today announced massive capacity reductions and a scheme asking staff to take some unpaid leave, raised the issue of aviation protectionism at the announcement.

Hong Kong-based airline Cathay Pacific has slashed capacity and cut costs in response to “deteriorating” business conditions, a week after Qantas made a similar announcement.

Starting from May, the airline will reduce passenger capacity by 8% and overall cargo capacity by 11%; sister airline Dragonair will see a 13% cut in capacity.

There will be a reduction in flight frequencies or seat capacity to cities such as London, Paris, Seoul, Mumbai and Sydney, but flights from Auckland to Hong Kong aren’t affected at this stage.