Why Cathay Pacific needs to trade in passenger comfort for profits

Why Cathay Pacific needs to trade in passenger comfort for profits
Why Cathay Pacific needs to trade in passenger comfort for profits

Kollau believed Cathay could retain its premium image in economy, and praised the airline for its unique six-way headrest on the Airbus A350 aircraft.

"I think Cathay can still maintain that attractiveness... besides offering a better economy product, they can combine it with data to make a more personalised service or offering. They do have a good selling point to build on, and for now, they are well positioned," he said.

Fellow "five-star" airlines – Etihad Airways, Qatar Airways and Eva Air – have all made the move to a more cramped cabin.

"Whether we believe in premium or not – yes, we are still in the long-haul network premium model," Loo said.

Indeed, the airline would hang on to its premium reputation with passengers if it kept the spacious nine-seat arrangement. However, Cathay is stuck between a rock and a hard place, according to Czerney.

The airline is faced with increasing demand and an airport quickly reaching capacity. Hong Kong International Airport hosted 70 million passengers last year alone.

"It's difficult to add new flights to Hong Kong, but there is a lot of growth. What can you do? You can just squeeze in more passengers into an aircraft," the PolyU academic said. "Because of the growing demand, they may be able to serve more passengers at an even higher price."

At the end of the day, the tighter squeeze in the sky may not be so bad for the Hong Kong traveller.

Without more seats in economy class and with all airlines flying out of Hong Kong airport facing the same limitations to growth, pressure would be on carriers to increase airfares.

"In the long run it will be successful," Czerney said.

"Why? Because passengers care for the price, so if you can offer more seats at a slightly lower price, you will get the passenger and will also earn more money, and be profitable."

The next challenge on the horizon for Cathay, and other major carriers, is the onslaught of budget airlines offering long-haul flights. And with another runway opening at the Hong Kong airport, Kallau says all carriers would be assessing their position.

"It wouldn't surprise me since they are all feeling the squeeze from the Gulf carriers and next – from long-haul low cost in future," he said.

Follow On Events International on Twitter and Facebook.


Get the latest news delivered to your inbox

Follow us on social media networks