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Cathay Pacific

Cathay Pacific to unveil its largest ever business class lounge as complaints about finances persist

Measuring 3,306 metres, The Pier is set to be the largest of the airline’s lounges

PUBLISHED : Friday, 20 May, 2016, 8:02am
UPDATED : Friday, 20 May, 2016, 8:01am

Despite its new era of belt-tightening, Cathay Pacific Airways is sparing no expense to unveil a revamped business class lounge at Hong Kong airport for its frequent travellers.

The premium carrier has faced a wave of criticism in recent months from customers and shareholders, most recently at its annual general meeting last week, culminating on Tuesday in its setting forth new cost-saving measures including a hiring freeze.

However, its revamped business lounge facility, The Pier, is to be the largest of the airline’s eight lounges at Hong Kong International Airport, measuring 3,306 square metres and able to accommodate 550 travellers.

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The lounge, due to open within weeks, is to feature the only Chinese tea house at the airport as well as familiar staples such as a noodle bar.

The Pier is to be run by the Plaza Premium Group, which recently took over management of Cathay Pacific’s entire portfolio of lounges in the city. Frustration has surfaced, however, among some of the company’s frequent fliers who viewed the new management as a money-saving move.

Leslie Lu, head of product development at Cathay Pacific, told the Post he rejected the notion the company was cutting back on quality and costs.

“We are spending HK$7 billion on our products and services,” he said, adding that no one should doubt the company’s “determination” to enhance passengers’ experience.

Lu nevertheless conceded the management transition had been “challenging” and pledged to tackle the matter.

Shareholders slam Cathay Pacific for declining premium image and fat management bonuses

“We are paying attention to all the feedback we are getting – some is positive and some is less positive than we hoped for,” he said. “But we are trying to address passengers’ concerns.”

Premium customers of the company’s first class lounge have complained of sub-standard service under Plaza, citing slower food service, smaller food portions, botched drink orders and miscommunication with wait staff.

The past 12 months have brought a series of changes for the company. Cathay Pacific and Dragonair are now being given a makeover, the latter receiving a HK$100 million rebranding as Cathay Dragon.

Cathay Pacific has also been locked in negotiations with its pilots union over a number of rostering issues, but sources familiar with the talks said disputes had been largely ironed out.

Last year the company registered a HK$6 billion profit, but it took a fuel hedging loss valued at HK$8.5 billion.

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Despite low oil prices benefiting the industry, Cathay Pacific has faced continued pressure in its cargo business and in the front-end of the plane as fewer travellers purchase premium seats, forcing the company to review its spending plans.

Last week, the company’s shareholders upbraided management at their annual general meeting, accusing bosses of contributing to Cathay Pacific’s declining image and arguing that its underperforming share price was at odds with the hefty bonuses handed to its executives.

One shareholder and frequent flier alleged the company’s cost-cutting measures had diminished Cathay “from a premium airline to a not-so-premium airline”.

Cathay Pacific’s shares have lost 37 per cent of their value in the past 12 months, compared with a 27.4 per cent dip in the Hang Seng Index.

In welcome news for the company, the first of its new HK$124 billion jetliner order of 48 Airbus A350s is scheduled to arrive in the city on May 28, albeit three months late. Next month Cathay Pacific is to debut direct flights to Madrid, Spain.