Costs at Cathay should go down further as the group re-fleets. Whereas SIA went through a re-fleeting last decade, it has only been recently that Cathay has seriously moved to replace ageing and costly 747-400s, which SIA withdrew from passenger service in 2012.
Cathay will still have A340-300 phase-outs (there were 11 at the end of 31-Dec-2012) to drag its costs down until well into the middle of the decade. A recent agreement with Boeing will see the airframer take Cathay's 747-400BCFs that are unprofitable. Despite sounder moves at SIA with regards to fleeting, Cathay has performed better on the cost front.
This is challenging for SIA as outside of its cargo division and forthcoming withdrawal of its five A340-500s, there are few opportunities to improve fleet efficiency. The withdrawal of the A340-500s should drive a reduction in SIA costs in 4Q2013 as these aircraft are used exclusively on all-premium non-stop services to Los Angeles and Newark, which will be dropped as the aircraft are returned to Airbus. But this will be a one-time reduction while Cathay should be able to continue to reduce costs as its fleet is renewed.