Cathay CEO: Airline will not develop LCC

Cathay Pacific 777-300. Photo: Courtesy, Boeing.

Cathay Pacific Airways CEO John Slosar told ATW that the airline will not launch a low-cost carrier along the lines of the one announced by competitor Singapore Airlines last month (ATW Daily News, May 26). Instead, it will stick with the airline’s proven premium and network strategy.

"I don't see Cathay going in the low-cost direction at the moment," he told ATW at a National Aviation Press Club lunch in Sydney last week. Slosar said the airline's network and brand were powerful assets in the battle with LCCs. "We understand low-cost airlines well and in economy class we've got to have sharp fares to get you to purchase Cathay Pacific tickets," he explained.

Until now, CX has competed effectively against short-haul LCCs, such as AirAsia, by discounting the back end of its Boeing 777-300s. However, Slosar hinted strongly that the airline is moving toward adding a premium economy product as an additional point of difference.

"Yes, [premium economy] started off as a niche product and makes great sense for the ultra long-haul routes," he said. "But it is moving to be more commonplace and thus we will be taking steps to compete in the market and in true Cathay style we will deliver something special—not just an economy seat and call it premium."