As Hong Kong struggles back onto the tourism charts, several misdirected official pronouncements have placed immense pressure on local carrier Cathay Pacific to launch new routes to Mainland China and to the Middle East.
None of this has anything to do with profitability – the airline announced an attributable profit of HK$9.7mil (RM5.85mil) in 2023, a pittance in the scheme of things. This has to do with patriotic hubris, which has seen the downfall of many a proud “flag carrier” starting with the bankruptcy in 1991 of American biggie Pan Am that had planted the national flag just about everywhere.
Pan Am’s decline no doubt was aided by poor management but it was a highly over-stretched brand.
There are profound lessons in that unprecedented collapse. Airlines reorganised themselves along more economic lines in deregulated skies. Planting national flags around the world was replaced by tough management and a focus on quality service to attain profitability. The last thing a once-premium carrier like Cathay needs is government or travel agencies demanding lockstep expansion to match political objectives. Passengers and profits must come first.
As Mainland cities open up to easier travel to Hong Kong, the airline will certainly be free to respond to fresh demand as it has with the announcement of new flights to Riyadh, Saudi Arabia in October 2024. Cathay Pacific currently serves around 80 destinations compared with 109 destinations in 2018. These numbers say it all.
The airline’s possible resurgence is hampered by two factors – a huge shortfall in pilots and cabin crew after the pandemic layoffs; and a steady shift in ticket purchase trends favouring cheap prices over loyalty carrots.
According to a June 2024 report from the Official Airline Guide (OAG), “… only 65% of Gen Z and 70% of Millennials report being enrolled in airline frequent flyer programmes, compared to 89% of Baby Boomers and 80% of Gen X.”
As Cathay Pacific dropped its own romance-tinged Marco Polo frequent flyer programme to switch to dull “status points”, the writing was on the wall. Part of this move was to cull expenditure as a great many passengers had acquired the basic green status cheaply, or so the airline calculated. Pressure on overcrowded airline lounges was huge, and at boarding gates the queues for Marco Polo priority boarding often outnumbered the lowly economy line. This was particularly true at airports in China and India.
Tighter thresholds starting at 300 points for silver status means that a green-starting membership (for lifetime) gets passengers nothing, not even the right to a priority check-in or boarding queue. Perks really start at 300 points, which are hard to get unless you fly long-haul to the US or Europe a few times a year.
Genuine frequent flyers within Asia have been left stranded – flying, say, one hour from Hong Kong to Manila may offer the same Club Points as a six-hour flight to India. Some have moved to alternative programmes as travellers usually hold multiple loyalty cards. And many have simply opted for cheaper tickets, privileges be damned.
The lack of multi-lingual multinational cabin crew (as in Cathay’s heyday) has made the in-flight service experience less welcoming and international – although it remains very efficient and polite. This is all part of cost saving.
The danger is in hands-off revenue managers calling the shots. Statistics never tell the entire story. There is a difference between thrilling statistics and customer satisfaction. Service is an undefinable “feeling”. The takeaway emotion is true luxury. Brands everywhere are being throttled by unimaginative accountants glued to Excel sheets.
Cathay’s pilot shortfall is more daunting. Senior pilots are hard to come by and the airline’s stellar reputation has taken a hit with the experience drain. There is no substitute for airline miles clocked when it comes to the person sitting in the cockpit. This is where airline miles matter. Greater experience equates to greater safety. There is no way around this.
To rebuild pilot strength the airline has dropped the required 4,000 flying hours to 3,000 as the basic qualifying level for Captain training. This short-circuiting of the route to a command position has raised eyebrows and remains stymied by a lack of training facilities for new intake as well as for seasoned first officers already on the payroll and ready for a move up.
An Arizona-based flying school recently grounded Cathay cadets from solo forays after a series of incidents from wingtip collisions, overly heavy landings, and going off the runway to non-reporting of mistakes. This is bad PR for a brand that is trying to make a comeback.
Flying schools certainly make for colourful stories but the quality of intake determines the quality of output.
Clearly, profits will not be the only story on the road to success. It will take more attractive ticket prices, a sensible FFP, better pilots, more multi-national crew and rigorous training for Cathay Pacific Airways to fly high again. Political meddling is the last thing the airline and its passengers need.
> Vijay Verghese is a Hong Kong-based journalist and editor of the online magazines AsianConversations.com and SmartTravelAsia.com.
