Cathay Pacific Airways Boeing 777-367(ER) (36161/818) B-KPL departs Los Angeles International Airport (LAX/KLAX) on December 20, 2012 sporting the carriers "OneWorld" livery.
(Photo by Michael Carter)
Cathay Pacific Airways doubts the low-cost, long-haul business model is sustainable over the long term and does not intend to change its full-service model to compete with the proliferation of LCCs in the Asian market.
Cathay Pacific COO Rupert Hogg spoke about evolving airline strategies in the Asian market as a panelist at the Association of Asia Pacific Airlines (AAPA) 58th Assembly of Presidents in Tokyo Wednesday.
In August, Cathay has reported a first-half net profit of HK$347 million ($45 million), up dramatically from a net income of HK$24 million in the year-ago period. The Hong Kong-based carrier said the much-improved results were due to the robust growth of passenger demand, especially on long-haul routes.
Hogg noted Wednesday that it was really no longer valid to talk in terms of LCCs because there was so much blending of services, with many so-called LCCs in Asia now providing long-haul services on widebody aircraft with two cabins. This makes them different from how LCCs developed in Europe and North America, he said.
In other differences, he said that Asian LCCs are not creating new markets, as European LCCs like Ryanair and easyJet did. “In this area, there are no LCC routes that were not already served by full-service airlines,” Hogg said.
Where there are differences, especially on long-haul routes, is that full-service carriers typically offer higher frequencies between key city pairs.
“We will continue to serve Singapore nine or 10 times a day with widebody aircraft. We won’t change our model,” Hogg said. “The demand is there but it’s how are you going to accommodate it.
We are not convinced that in the long term the [LCC] model is right for us. We will keep working on making sure our model is right; that’s what works for us.”
(Karen Walker - ATWOnline News)
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