Part Of Why Cathay Pacific Is Losing Money

I’m currently planning a trip to Seoul in the Summer – and I’m deciding between flying Cathay Pacific or Korean Air. As a Cathay Pacific loyalist, my initial choice was to go with Cathay. At the end of the day, I get priority check-in, lounge access and priority boarding as a Marco Polo Silver member.

img_2543Cathay Pacific Airbus A330-300 Economy Class

Just as a point of comparison, I made dummy bookings for both Cathay and Korean Air flights – and made this (not so shocking) discovery when I booked my flights – with a late night departure from Hong Kong and an evening departure from Seoul.

Screen Shot 2017-04-28 at 10.04.36 PM.pngCathay Pacific Hong Kong to Seoul Fare 

Screen Shot 2017-04-28 at 10.04.04 PM.pngKorean Air Hong Kong to Seoul Fare 

So. As it turns out, Cathay Pacific is charging around 1,200HKD more than Korean Air – who arguably has a better product than Cathay Pacific.Just think about it. Korean Air offers 34″ of seat pitch while Cathay only offers a 32″. Both are quite generous, but that extra bit of space could really have a positive impact on the customer experience.

Just think about it. Korean Air offers 34″ of seat pitch while Cathay only offers a 32″. Both are quite generous, but that extra bit of space could really have a positive impact on the customer experience.

IMG_7159Korean Air Boeing 777-200 Economy Class 

In the catering department, Cathay Pacific serves a pretty pathetic “snack box” on the redeye flights that I will be flying in, which consists of a really sad sandwich, a cookie, a chocolate bar and a cup of fruit. On the other hand, Korean Air offers a full hot meal on these flights.

IMG_7109Korean Air Business Class Bibimbap (It’s the same in Economy) 

Image result for cathay pacific snackboxCathay Pacific’s Infamous Snack Box 

While I understand that Cathay’s snack box is designed in order to allow passengers to rest, is it that hard for the catering department to try and make the food not look revolting? For anyone saying that Korean Air’s meal service infringes on the time a passenger could rest – a passenger could always request eyeshades from the flight attendants to get some rest if they really needed it – so realistically someone could get just as much rest on a Cathay Pacific red-eye as you would on a Korean Air redeye.

All of this is to prove the point that Cathay Pacific simply isn’t being competitive. This is why Cathay is losing money. Management should stop blaming it on decreased demand for flights – because realistically, more people than ever are flying. The real issue with Cathay Pacific is the inferior product that they are offering for a consistently higher price point.

Cathay Pacific Airbus A330-300 

Ultimately, I’m still going to fly Cathay Pacific because of my status. However, this doesn’t apply to many people. The average Hong Kong-based traveller isn’t bound by their status to choose Cathay over other airlines. What most people will instead see is a lower price tag from other airlines, along with negative reports from the media about Cathay Pacific.

IMG_7157Korean Air Boeing 777-200 Incheon Airport

After a pretty bad financial year, Cathay is trying to push a series of changes in a program called “Time to Win” – which really should be called “Time to Raise Unemployment Rates in Hong Kong” – but I digress. As part of their restructuring, I think Cathay Pacific should really take a serious look at how they price their tickets and how that relates to the product they’re offering. Flying with Cathay is simply not worth it anymore – and it’s starting to show. Passenger satisfaction rates seem to be dropping faster than Cathay’s share prices.

Cathay Pacific Boeing 777-300ER Economy Class

So. Maybe it’s time to take a serious look at how Cathay Pacific can adjust its product and pricing to make it competitive. Maybe take a look at “luxing up” their Economy Class product by improving food and amenities on all flights – for example, replacing wraps and snack boxes on short and late night flights with a more comprehensive service (like a bento box), or offering 100% of passengers blankets and pillows on regional flights. Heck, maybe even offering amenity kits on Economy flights.

Cathay runs out of blankets on many regional flights 

Already, management is making customer-friendly changes – like offering ice cream on regional Economy routes or adding a protein to starter salads, but that’s not enough. They need a full review of how their product and price aligns them with their competitors – also taking into account the viability of these new service enhancements. Cabin crew are already complaining that there’s not enough time to pass out Ice Cream on regional flights.

IMG_7904.JPGCathay Pacific Boeing 777-300Er Economy Class Ice Cream

An alternative to pouring money into an improved product is keeping the existing product – heck, even downgrade it – while maintaining a really competitive price by undercutting or at least directly competing competitors on ticket price – kind of like what Hong Kong Airlines does – except being more reasonable with their pricing.

Image result for hong kong airlines site:youngtravelershongkong.wordpress.comHong Kong Airlines’ swirly, vomit inducing livery heavily mirrors Hainan Airlines’ livery – which is owned by Chinese Conglomerate HNA 

Bottom Line

Many Hong Kongers feel this special connection with Cathay Pacific. After spending a long time abroad, the logo, the uniform, the Cantonese that you hear spoken at the gate area, the food, it all evokes a feeling of home. For me, it’s like stepping onto a Cathay flight means that I’m headed home. It pains me as an aviation geek from Hong Kong that my home carrier is undergoing these financial problems. I really think that Cathay could benefit by throwing away the rulebook, looking at each aspect of the airline’s operations and making the changes needed from a modern perspective.

Here’s to hoping that Hong Kong Airlines doesn’t become the de-facto flag carrier of Hong Kong…

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