Cathay rules out LCC – for now

Cathay rules out LCC – for now
By admin


Cathay Pacific has ruled out creating a low cost subsidiary – at least for now.

The airline's chief executive, John Slosar, said it would focus on selling the 20% of seats that go unsold on its aircraft rather than launch another airline.

He told a conference that while Cathay had to compete with 17 “so-called” low cost carriers in Hong Kong, it was holding its own.

But he conceded the strategy could change if that position altered.

“The way we look at it is that the cheapest seats are the 20% that we don’t sell each year,” Slosar said when asked if he had any plans to launch a budget subsidiary. “Empty seats are basically waste and our strategy is to make sure we use the assets we already have effectively before we start a completely new airline.”

He said all the data indicates that Cathay is competing in the market and getting its share of the “huge opportunity” presenting itself in Asia.

“But the day it says that is not going to continue we’ll change our strategy,” he told the World Travel and Tourism Council Asia Summit. “We can never say never. Anyone who says never in travel is doomed to be shown to be wrong.”

Slosar also acknowledged that the expanding international reach of Chinese carriers will create further competition for Cathay. While five years ago Chinese airlines were focused on the domestic market they are now growing internationally and “learning how to do it”, he said.

“They see their role as linking Beijing with the world and the world with Beijing. They are on a path and they will get there,” Slosar said. “We’ll have to find ways to compete and convince passengers that it’s better to buy a ticket on Cathay Pacific. But that’s normal everyday business and we do that now.”

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