Cathay Pacific’s new business class premium economy and economy class products will be launched on October 29 on the Dubai route, and from January 2013 on the rest of the Middle East routes.
Speaking to TTN, Cathay Pacific country manager, UAE and Oman, Brian Yuen said: 'The new upgraded business class, premium economy and economy class products have been well received among out passengers. The new business class is being compared to first class service. The Premium economy is a very exciting concept for us as it is fairly new for a lot of people. On Cathay, our Premium economy guests will have a separate cabin, personal TV screens; a welcome drink, amenity kit and a better menu too. It provides that little bit extra for those who feel they can pay a little more to have that extra comfort.'
Cathay Pacific Airways recently released its combined Cathay Pacific and Dragonair traffic figures for August 2012 that shows an increase in the number of passengers carried alongside a drop in the passenger load factor.
The two airlines together carried a total of 2,610,150 passengers in August – up four per cent on the same month in 2011 – while the passenger load factor dropped by 1.1 percentage points to 83.1 per cent. Yuen said the Middle East too has seen healthy results.
'We have been doing a realignment of schedules and as a result have witnessed healthy loads. We reduced one of our weekly flights from Abu Dhabi from a four to three per week and have plans to tag the flight with Riyadh. We believe this pattern will optimise our position in the market,' he said.
Yuen was quick to add that the increase in fuel prices and competition from regional Gulf carriers, have kept the management on their toes in recent times.
'If you look at our interim report, our fuel price represents 41.6 per cent of our total operating costs, which is very high. The fuel price did come down a bit then it has now crept back up over the last few weeks, so this is still a concern for us,' he said.
'We are seeing as a group, the corporate business a little under pressure which affects our premium class, where most airlines make their money. We do try and do some fuel hedging, but in this, you may win, but you also may lose. At the same time, even with the fuel surcharge, this is only enough to cover maybe half of the additional fuel costs. All these factors are not painting a very rosy picture in terms of the operating costs.
'As for competition in the region, our friendly competitors have been extremely aggressive, in particular from Emirates, Etihad Airways and Qatar Airways. Qatar Airways have increased flights to Hong Kong and Emirates will soon add Singapore to its A380 network. So surely, it is something we watch very closely.'
Yuen said that as the Gulf carriers expand their African, Europe and Indian networks, they continue to build Dubai, Abu Dhabi and Doha as hubs, leading to more demand for flights.
Looking ahead, Yuen said the key focus for the airline currently is to renew its fleet. 'As early September our total fleet size was 183 aircraft which includes Cathay, Dragon Air and Air Hong Kong, our Cargo subsidiary. By the end of 2012, we will have added seven aircraft and from 2013 to 2020, we will take delivery of 90 aircrafts. As we cannot control fuel price, one way to keep the fuel cost down is upgrading to a younger fleet which are more fuel efficient.
'We are also adding new destinations. For the past year we have focused on our regionals destinations, mainly because long haul traffic has higher operating costs. The new destination recently launched are Xian, Guilin in China, Jiju in Korea, Kaoshiug in Taiwan, Clark in the Philippines and Chang Mai in Thailand and in the next few months we will add Haikou and Zhengzhou in China and Hyderabad and Calcutta in India,' he added.
Cathay Pacific is also set to open its Cargo Terminal early next year in a bid to boost its cargo traffic and building Hong Kong as the most preferred cargo hub in the Asia region.