Discounted flights and hotel packages among Cathay Pacific’s bid to cater to ‘price-sensitive travellers’
Hong Kong’s premier airline rejected establishing a new budget carrier as the city’s airport was unable to take new flights and instead targeted measures such as ‘fanfare promotions’ that would include rediscounted ticket sales and cheap hotel packages
Cathay Pacific Airways is considering new measures to cater for price-sensitive travellers without creating its own budget airline.
These may include more “value for money” tickets as the airline attempts to rebound from a HK$2.05 billion loss recorded in the first six months of the year.
Cathay Pacific chairman John Slosar said the carrier could match low-cost airlines and the needs of thrifty passengers.
“It is not the case that just because we are a full-service airline doesn’t mean we can’t compete with so-called low-cost airlines,” he said. “If you look at their pricing, they may be low cost, but they might not be low price.”
Ronald Lam Siu-por, the airline’s director of commercial and cargo, disclosed to analysts the company would “further differentiate” economy class against rivals so “the value for our customers will improve”.
Several initiatives would be considered, he said, citing recently revamped discounted ticket sales with cheap hotel packages as part of “fanfare” promotions.
Hong Kong’s premier airline on Wednesday rejected establishing a new budget carrier, saying the city’s airport was almost full and unable to take new flights.
“You can hear they mention unbundling or offering more cheap tickets like fanfares,” said aviation analyst Geoffrey Cheng, head of transportation and industrial research at Bank of Communications International Holdings.
Other full-service airlines charge separately for baggage and meals as part of the “unbundling” process.
Last year, China Airlines introduced hand-baggage only fares, but aviation analyst Will Horton did not believe the Hong Kong carrier would follow.
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Cathay Pacific chief executive Rupert Hogg noted there was need to find “a proposition that price-sensitive travellers ... prefer to fly on our airlines”.
In an earlier interview with the Post, he acknowledged how in Europe low-cost airline easyJet was “becoming in effect a full-service carrier”. Hogg also said he was “open minded [to where] business models might go”.
Despite the challenges, analysts were optimistic that the worst of the losses accrued by Cathay Pacific were behind it.
“We believe the worst has passed for Cathay Pacific with gradual recovery to come,” said Andrew Lee, transportation and industrials analyst at consultancy Jefferies.
Cathay Pacific shares jumped as much as 6 per cent at one stage yesterday before closing the day 10 HK cents or 0.85 per cent higher at HK$11.80.