Free-spenders send Cathay inflight sales sky high

Even the skies aren't safe from Hong Kong's shop-till-you-drop consumers - as Cathay Pacific has discovered.

It might be the high altitude, or the inflight drinks, but both anecdotal and hard evidence suggest that inflight sales are heading for the stratosphere. Cathay Pacific says inflight sales have soared 35 per cent year on year in the first half, and it is keen to develop online shopping to broaden its revenue stream.

Cathay inflight sales have become a golden goose largely because travellers are more willing to spend when they are on board. Its inflight sales grew faster than passenger numbers in the first half.

For the six months to June, Cathay and its subsidiary Dragonair flew 8.5 per cent more passengers than the same period last year but onboard business rose 35 per cent year on year. In June, leading up to the peak summer travel season, passenger numbers rose 27.5 per cent year on year but still lagged inflight sales, which rose by 50 per cent.

'The growth of inflight sales was beyond our expectations,' said Jasmine Hui, Cathay's inflight sales and logistics manager. However, the nature of the industry also imposes limitations on inflight shopping. First, the quantity of duty-free products on board is constrained by an aircraft's loading constraints, especially at a time when oil prices are hovering around US$80 per barrel. Second, as the percentage of seats sold, or passenger load factor, keeps rising, cabin crew are busier serving passengers, with less time to to sell duty-free products.

But from a retail point of view, it is still attractive. Where else in the world can you find hundreds of affluent people locked up for hours with little to do except watch inflight movies and browse shopping guides?

To solve the storage problem, Hui said Cathay launched a home delivery service in January to sell bulky or high-end gourmet products to passengers. Sales from home delivery increased by 200 per cent in the second quarter over the first quarter.