Expanded business class menus, an aggressive roll-out of inflight wi-fi and new economy seating are among the changes Cathay Pacific passengers are seeing as the airline battles increased competition and restructures its operations.
The Hong Kong-based carrier has a three-year transformation program underway as it moves to recover from two years of losses, including an $HK1.25 billion ($US160 million) net loss for the 2017 financial year.
It has been affected by fundamental changes that saw increased competition in many of its markets, including an aggressive expansion by mainland Chinese carriers. T
The downturn in profitability saw 600 jobs axed and a greater emphasis on productivity nad accountability as the airline moves to rein in costs and return to profitability.
READ: Cathay, Virgin boost options between Australia and Hong Kong.
It is also seeing the use of digital technology as part of an increased emphasis by the airline on the experiences customers value and want, according to chief executive Rupert Hogg.
Some of this involves the use of big data while some translates research such as customer panels into a more usable electronic form.
“We’ve done a lot of work on the digital side of the business and what we’re doing is we’re embedding the capability within the business to really understand the customer experience and where we can improve,’’ Hogg tells AirlineRatings on the sidelines of the International Air Transport Association annual meeting in Sydney.
Among the digitally-inspired changes is a new dining service that offers more choice, a different style of service and greater flexibility such as express breakfasts and quick snacks for late-night departures.
“And That rolls out on long-haul routes from next month … and by the end of the year we’ll have done all of the long-haul destinations,’’ Hogg says.
Hogg says the change is “a real upgrade and complete change in the proposition”. It won’t involve pre-ordered meals but it will give passengers a choice of six entrees, plated delivery, better presentation and bigger portions.
“One of the big pieces of feedback that we got is people don’t want complexity, they just want bigger portions, great quality, great looking presentation,’’ he adds. “And we’ve taken the opportunity with the delivery style to make it a much more interactive experience and personal experience with the flight attendants if you want it to be that.”
Cathay is also investing heavily in inflight wi-fi, something else Hogg says many passengers want.
“All of our A350s so far have got inflight wi-fi and it’s popular,’’ he says. “We start this month to do all of our 777s as well.
“We will finish all of our long-haul fleet by the end of 2020, which is about 100 aircraft. So a lot of aircraft.”
New economy seating is starting to appear in the airline’s Boeing 777s as part of the move from nine-abreast seating to the less popular but more profitable 10-abreast configuration.
The change means seats are not as wide — now down to 17.2 inches compared to more than 18 inches in the old configuration
To soften the blow Cathay is retaining a 32-inch seat pitch and has added bigger, high-definition inflight entertainment screens as well as other extras such as in-seat power, an adjustable headrest and a space to store small items.
“We’re keeping the pitch at 32 inches but with modern composite materials and stronger metals you can have a thinner seat structure and better cushioning,’’ Hogg says.
“We’re significantly upgrading the inflight entertainment systems there, so the screen goes from 9 inches to 11.6 and we’ve got high definition movies on board.
“We’ve taken the time to sweat the details so we have tablet stand and things like that, so it’s good personal space I think.”
The airline is also enjoying good customer feedback from its new lounges.
The latest of these, the Deck, opened recently and Shanghai is due to open by the end of the year.
Hogg says the lounge program has been very well received and “we’re really pleased and proud of it.’’
The improvements are part of a move by Cathay to further differentiate itself from its competitors.
“I think in every class we want to make sure that we are considered the number one choice in preference to the other alternatives that people have,’’ he says.
“We’re not always the cheapest so it’s important that we create what we think a sustainable differentiation.
” So we start from a great place in the sense we’ve got a great hub and a great network, we’ve got a very young fleet that we’re modernizing. “
While the airline spent a lot of time the on inflight hard product and ambience, the airline chief sees the real differentiator as service style.
Cathay has always had a strong service ethos, he says, but it is trying to make it even more effective by having more data on customers and making that available to flight attendants.
Another pillar on the road to long-term financial sustainability is what Hogg terms new sources of revenue.
The first stage of this is expanding the network with new planes such as the Airbus A350-900 and the bigger variant due to be delivered soon, the A350-1000.
Cathay opened up Tel Aviv and Barcelona last year and new destinations this year include Dublin, Brussels, Copenhagen and Washington, DC.
Many of the destinations have not been previously connected to Hong Kong and playing a key role in the expansion is the Airbus A350-900, which is about to be joined by its bigger sister, the A350-1000.
“It’s super-efficient so it has allowed to us to open points in Europe and put second frequencies on to some places and to do that in a way we weren’t able when we only had a 777, which is a slightly bigger aircraft,’’ Hoggs says.
The Hong Kong airline plans to build up its new destinations to the daily services preferred by business customers.
“Some of them we’ve started as seasonal services only,’’ Hogg notes. “We started Barcelona as seasonal, we’ll now keep it year-round and now we’ll start increasing frequencies. The same holds true for Madrid.
“The intention is always to get to daily and we can do that as more aircraft come along.
“So we’ve just taken a decision to build a bridgehead at each place and build our presence, build sales and then as the new aircraft come in, to increase frequencies.”
