Cathay cuts business class seats as demand lags
Cathay Pacific Airways will replace two rows of business seats with economy seats on its 12 Boeing 777-300 (B773) aircraft this month, a sign premium passenger demand is lagging the pick-up seen at the rear of the plane.
A Cathay spokesman said the reconfiguration aimed to improve crew service, as business class seats on the aircraft were in two sections.
However, analysts said the move had more to do with slow demand for premium seats, as Cathay had been hit heavily by a slump in business and first class sales.
'More and more airlines perceive that premium traffic will not recover as fast as economy class in the near term,' said Karen Chan, a transport analyst at RCM.
Qantas Airways might ditch first class seats on short international routes to increase revenue, chief executive Alan Joyce said last month.
The B773 is deployed by Cathay on regional routes such as Taipei, Bangkok, Tokyo and Seoul. The carrier's backbone - the B777-300ER, which is used on long-haul routes - will keep its seating configuration.
The first B773 aircraft was moved to a hangar of Hong Kong Aircraft Engineering at the weekend for the seating changes. Work on the remaining planes is expected to be completed next month.
About 14 seats will be removed from the front-end cabin, bringing down the number of business seats to 45 after the reconfiguration. The number of economy seats, in contrast, will increase to 353 from 326.
In August, premium paying passengers worldwide fell 12 per cent from a year earlier, compared with a 23.5 per cent year-on-year drop in May.
'World trade has picked up since June but not sufficiently to warrant a significant rise in premium travel,' said the International Air Transport Association, an airline industry body with more than 230 members.
Economy traffic dropped 0.4 per cent in August across the globe from a year earlier, compared with the low point in February, when traffic dipped 8.4 per cent.
Economy demand has been helped by a trade-down by premium paying passengers.
A recovery in premium travel will be crucial to the turnaround of regional airlines, especially Cathay and Singapore Airlines. Travellers in premium seats represent fewer than 10 per cent of the total but normally contribute as much as 30 per cent of passenger revenue.
