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Cathay expects increased connectivity to London will be attractive to Australians

CATHAY Pacific says it has benefited from the Qantas decision to stop flying beyond Hong Kong and expects to gain further with improved connectivity from a fifth daily service to London Heathrow.

The Hong Kong-based carrier, which has undergone a massive product upgrade on all of its 78 flights to and from Australia each week, believes the kangaroo route through Asian midpoints remains an attractive option for Australian travellers and it will continue to thrive in the face of the Qantas alliance with Emirates.

“There will undoubtedly be some change in the competitive dynamics on the kangaroo route as a result of Emirates and Qantas,” Cathay sales and marketing director Rupert Hogg said during a brief visit to Australia this week.

“But we’re quietly bullish that Asian points will remain relevant and attractive and Asian and other carriers flying over those points will continue to do well in that market.”

Cathay’s fifth daily Hong Kong-London service is due to debut on June 27 and will give it 35 frequencies a week to the British capital. It will be operated by a 777-300ER with the five services offering a full range of cabins from first class to economy and adding about 1000 of the airline’s increasingly popular premium economy seats a month in each direction.

Mr Hogg said he expected the increased connectivity to be attractive to Australians.

“We’re four (daily) flights to Sydney and four to Melbourne and one triangulated over Adelaide, so five flights to London really gives huge connectivity and permutations and options to people,” he said.

“And again it’s the same product, the same airline to same airline. So we think we’ll survive and thrive.”

Cathay is also expecting a boost on its Down Under services from the increasing popularity of Australia with Chinese tourists.

It has been building up services from Hong Kong into the mainland through subsidiary Dragonair, which last month announced it was introducing new business and economy seats as well as a new inflight entertainment system, with the refit due for completion by the end of next year.

Mr Hogg said Cathay was in a prime position geographically in terms of China and saw strong organic growth potential.

He said Dragonair was now flying 400 flights a week into Hong Kong and had grown by 12 destinations in as many months, with many of the new ports attractive leisure destinations.

The outbound market from China was also continuing to boom and had high growth potential. “If you’ve seen the Australian tourism research, Australia’s right up there for its natural wonders, it’s safety in terms of security and a combination of beaches and cities,” he said.

“And then I think what we bring to it is not just the network but on Australia now we’ve got a completely new A330 fleet with flat-bed business class and we get a lot of front-end tourism.

“In addition to that, we’ve got premium economy to every point in Australia and that’s beginning to sell well in China as well as down here, and then we’ve put in a new economy cabin and economy seat as well.”

Mr Hogg stopped short of saying Chinese growth would lead to more flights to Australia, but said the airline had the ability to upgrade its planes to increase capacity. He acknowledged mainland carriers were increasing their presence in Australia. He said Cathay never underestimated the competitive landscape and he believed the airline’s service, style and its ability to recognise individuals were a plus, particularly in China.

“I guess there’s no magic wand: it just comes back to making sure we focus on what the customer wants and providing it,” he said.

“And that’s why we made such a huge investment in fleet and hard product.”

Asked about Qantas’s plans to start up its Jetstar low-cost joint venture in Hong Kong, Mr Hogg said the new airline still had to go through the regulatory assessment and satisfy authorities on issues such as the principle place of business requirement enshrined in Hong Kong’s Basic Law. However, he was unable to say how Jetstar Hong Kong would fare in the process.

“I think we compete with 90 carriers in Hong Kong in total and there are a lot of low-cost carriers that fly in and out of Hong Kong, as you know – AirAsia and Jetstar,” he said.

“So we take on all competition in the form that we find it and adapt ourselves accordingly.”

 

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