Will Cathay Pacific Airways launch a budget airline or won’t they? Hong Kong’s flagship airline once again faced this question at the aviation industry’s annual summit in Sydney last week.
CHINA AT A GLANCE
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Its CEO Rupert Hogg was cautious: “We are not blinkered in looking at all of these [low-cost] models and how they are developing. We can learn the lessons from them if there are lessons to be learned.
“We’ll make that decision if and when we get to a point where we can execute against it and we think it’s the right one.”
Last month, the airline’s executive director Paul Loo Kar-pui, would only repeat a line management had used before.
“Never say never,” was Loo’s comeback to media queries.
Cathay Pacific is also keenly aware of the need to woo a new generation of passengers. Photo: Felix Wong
This issue has long dogged Cathay amid an intense price war among airlines in Asia, as low-cost carriers chip away at their market share and Middle Eastern and Chinese airlines lure travellers with cheaper long-haul tickets.
Cathay Pacific says it would not think about adding a new budget carrier until at least 2024 by the time the third runway is ready at Hong Kong International Airport. Until such a time, the airport is all but full to add more new flights. In 2017, the airport handled 73 million travellers.
Some full-service airlines have launched budget carriers to woo new travellers and cater to price-conscious ones, while preserving their premium brand.
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But earlier this year, Cathay chairman John Slosar referred to advice he received from a former United Airlines’ CEO and said he was convinced the airline should look at how to compete better rather than “go down the path of setting up all these different airlines”.
On the sidelines of the International Air Transport Association (IATA) conference in Australia, Hogg said Cathay had been closely watching the response to budget airlines globally and “whether they gain market share, whether they are making money”.
With Cathay now carrying as many as 438 people per flight on routes also served by budget carriers, Hogg was asked whether this meant it would always prefer larger planes to maximise its take-off and landing slot at busy airports. Budget carriers typically use planes that can carry up to 186 passengers.
Hogg said the airline and its subsidiary Cathay Dragon already used larger planes for peak period travel between Hong Kong and Shanghai and smaller planes at quieter times, to “give passengers the combination of availability, capacity and frequency”.