Cathay Pacific is to give its staff free economy-class tickets across Asia throughout the winter as the carrier finds it increasingly difficult to sell seats amid the ongoing protests in Hong Kong.
The offers may make Cathay’s flights look busier, but it will not help the airline recover from a steep loss in revenue caused by more than 20 weeks of civil unrest. Hong Kong’s flagship airline faces earning less money in the second half of 2019 than the first.
An internal newsletter released by the airline on Friday said: “In recognition of so many of you pulling through during the challenging period we are facing, this represents a meaningful saving on your leisure travel, and makes that well-earned break a real possibility.”
The airline’s people director Tom Owen also told staff: “With this special promotion, I hope we have found a meaningful way to thank you all for your continuing commitment, professionalism and support.”
Cathay’s sweetener, offered to roughly 27,000 employees, came after months of acrimony over the company’s handling of sackings and will start on Sunday. It will last until March 28, 2020, and include travel by the airline’s staff and its nominated travel companions across Asia and the Middle East.
Almost 70 destinations – including those on popular Japanese routes, Bali and the Maldives – will be up for grabs.
The airline’s routes across Asia, particularly those in mainland China, have been hit hard by the ongoing anti-government protests in Hong Kong.
Customers across Asia have been less inclined to travel to Hong Kong and the airline has responded by trimming flight schedules and focusing more on long-haul destinations.
To recover the losses, the carrier has suspended its flights to Dublin, Medan in Indonesia, and daytime flights to Paris and Frankfurt. It has also reduced the number of flights to New York, Washington and Vancouver.
Under the offer, a return flight to Taipei will cost the airline’s staff around HK$621 (US$80) after paying the mandatory taxes and fees, instead of the regular fare of HK$1,731. Similarly, a trip to Tokyo will cost HK$762 instead of HK$4,712, while a flight to the Maldives will cost HK$1,754 instead of HK$6,074.
Cathay Pacific saw its second straight decline in passenger numbers in September – down 7.1 per cent, following an 11.3 per cent drop in August. In the past two months, the airline group carried 550,000 fewer passengers than the same period in 2018 as the protest crisis worsened.
In September, Cathay’s flights were only about three-quarters full, compared with the average of around 82 to 85 per cent.
Bocom International transportation analyst Luya You said: “While [the offers] won’t help [the airline’s] revenue, maintaining strong morale is still pretty important for Cathay Pacific at the moment.
“Considering the changes in management, lay-offs, and other regulation-related issues have all hit the company at around the same time, it can be assumed that the enthusiasm of its staff has not been the highest.”
Accountancy sector lawmaker Kenneth Leung said the offers might help Cathay Pacific get more passengers, but that would not help the company’s revenue.
“Figures, such as passengers in each flight or each month, may go up with more staff members taking the flights, but there won’t be much of an increase in the revenue,” he said.
The airline’s employees already enjoy travel perks which include paying as low as 10 per cent of the airfare.
Zuki Wong Sze-man, chairwoman of the Cathay Pacific Airways Flight Attendants Union, welcomed the move.
“We welcome any measures that enhance employees’ benefits,” Wong said, adding that employees should also get a 13th month pay and a “good pay rise” this year.
“These are measures that should be taken to reward the staff who have worked hard,” she said.
As the demand for travel wanes and planes are flying with more empty seats than ever, Cathay Pacific is continuing to add even more economy-class seats. The new changes are targeting its Airbus aircraft along with an existing programme to refit its Boeing fleet with 10-abreast economy class.
The first of the eight denser A330-300 planes rolled out this month sees a bigger economy-class installed, with fewer business seats and the premium economy section removed altogether. It raises the total capacity of the flight to 293 seats, including a 39 per cent increase to 265 economy seats.
The refitted Airbus planes will fly mainly to South Asia and the Middle East.
The airline also retired the last of its five 777-200s recently, replacing them with five larger second-hand 777-300 models – the last of which started flying this month with 31 per cent more seats, including room for 35 per cent more economy travellers.
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