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Cathay mulls premium economy

Published: 12/01/2010 - Filed under: News »

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Cathay Pacific is soliciting the views of its Marco Polo loyalty club members regarding a new product widely believed to be a premium economy cabin.

In an email questionnaire seen by Business Traveller, the Hong Kong-based carrier asks its members:

“With your help we can serve you better. At Cathay Pacific we care about what you think – and we listen. That’s why we would appreciate it if you would tell us more about a product offering which Cathay Pacific is evaluating.”  An accompanying picture shows an illustration of another airline’s premium economy seating.

This move comes as little surprise at a time when company travel budgets are under pressure and executives are looking to more affordable products in order to cut costs. 

Last year, CEO Tony Tyler admitted in the industry magazine Airliner World that his carrier, “had looked at introducing premium economy a number of times but we could not get the sums to add up.”

But matters are changing rapidly in today’s economic climate and more recently a spokeswoman told Business Traveller that Cathay Pacific has begun conducting a top-down analysis of its business. “We are looking at every aspect of our operation. Premium economy is one of the many options that we are studying although no decision has yet been made.”

Although premium economy is relatively unknown in Asia (only Taiwan’s Eva Air and Japan’s JAL and ANA offer the product), Cathay Pacific is facing fierce competition on European routes from carriers who already offer (or will soon be offering) the product.

On its main route to London Heathrow it competes with no fewer than four premium economy airlines (British Airways, Virgin Atlantic, Qantas and Air New Zealand). In the case of Paris CDG it competes with Air France (which is busy installing premium economy) while at Amsterdam it faces KLM (which has recently launched a quasi-premium economy product called Economy Comfort).

If Cathay Pacific were to opt for premium economy the move could not happen overnight. Expect a delay of at least one or two years, with premium economy installed on planes rostered for long distance rather than regional routes.

Visit cathaypacific.com.

Report by Alex McWhirter

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COMMENTS » 

cityprofessional - 12/01/2010 14:01

Re: "premium economy is relatively unknown in Asia"

What about Thai's A340-500s, and SQ's experiment with PE? If you're counting KLM's Economy Comfort, then UA's E+ offers more legroom (and competes with CX to the US and within Asia). Heck, even Air Asia has Hot Seats on its 70 A320s. And Jetstar's Star Class is effectively PE

BusinessTraveller - 13/01/2010 14:18

Thank you for the feedback. The piece was originally written for our European website (businesstraveller.com), and hence shows a European bias.

We decided to post the item on our Asia-Pacific website as we believed our readers there would be keen to hear news of their local airline. Judging by the fact that it quickly bounced into the website’s “Most Read” section it would suggest we made the right decision.

I take your point about Thai and SIA but note that I did quantify my claim with the words “relatively unknown.”

As regards to your comments I would like to add:

- Thai’s entire fleet of A340-500s (the only plane in the Thai fleet featuring premium economy) is up for sale. Until then they are officially rostered for one flight a day on the Bangkok-Los Angeles route. If and when Thai finds a buyer these planes will be withdrawn from service and so premium economy will be no more.

- SIA never “experimented” with premium economy. Had it not been for high fuel prices, SIA would still have been selling premium economy on the two routes it was featured, namely Singapore to Los Angeles and New York.

- We regularly ask Thai and SIA if they have plans to introduce premium economy on aircraft other than those serving a couple of niche routes. In both cases these airlines say they have no plans to do so. It could be that matters will change in years to come but, right now, that is the situation.

- You make a good point about United. Being based in Europe I gave preference to this part of the world. In truth, though, United is not offering the level of competition to Cathay as are the four carriers it must compete with on the London route.

- I must thank you for the info re Air Asia and Jetstar. I wasn’t aware of that.

Alex McWhirter

scfung6 - 14/01/2010 15:34

I fly CX a lot and often wonder why it doesn't have PE. I also fly BA a lot to London and always choose their World Traveller Plus if I have a choice. It is an excellent alternative to the ridiculously expensive Club World. In this day and age all one needs is a little extra leg room, a little more recline, and a more quiet/less busy cabin. PE serves this purpose well at a more competitive price. I know a lot of very rich people on the BA routes using this cabin. They don't need to show off to the world how wealthy they are by splashing out USD5000 for a biz class seat!!! CX - PLEASE introduce this cabin ASAP! Your loyal customers will love you for this and you will bring in more frequent flyers.

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