Cathay Pacific reveals its premium economy playbook

By David Flynn, July 22 2011

Cathay Pacific Airways CEO John Slosar confirmed CX’s premium economy plans to a National Aviation Press Club lunch in Sydney earlier this year, stating that "we will be taking steps to compete in the [premium economy] market and in true Cathay style we will deliver something special – not just an economy seat and call it premium."

Now the airline’s premium economy playbook is shaping up, with CX General Manager for Product Alex McGowan revealing his premium recipe in an exclusive interview with Australian Business Traveller.

McGowan, who has already kicked several goals with Cathay’s new business class as well as HK airport lounges like The Cabin and The Wing, admits premium economy is "an obvious segment" for the airline.

Filling a gap in the market

"If you’re a premium airline and you have a long-haul network that’s important to you, there’s a natural gap in the market between the standard economy product and the fully flat bed of business class, and certainly when you have a new business class like ours" McGowan told Australian Business Traveller when we visited Cathay Pacific HQ.

"But you need to really identify the core needs of the people who are going to be purchasing that product."

"I think the philosophy that’s right is to make it a quiet cabin, a more exclusive environment, with a larger more comfortable armchair that you can really sink into, recline and relax in."

"I think that any premium economy product needs to be its own seat, which needs to be wider and have more (legroom), it needs to have a legrest and footrest and be a better all-round experience."

Better food, entertainment, and a private cabin

McGowan also calls out "upgraded catering and a larger (video) screen size" as key components. "But it’s mainly its about being a small private cabin, set separately and having more interaction with the cabin crew and a better standard of service (compared to economy)."

McGowan has of course been studying the competition, including Oneworld alliance partners such as Qantas and says "I think airlines that have done all that have got it right. Airlines that have perhaps gone for innovation for innovation’s sake, or trying to do things with fixed back shell seats in premium economy, I think that’s a mistake when what passengers want is a simple comfy armchair."

It's no business class, though

Premium economy won't be an approximation of Cathay's ultra-premium new business class seat.

The airline is keenly aware of the need to sharply differentiate premium economy from business class in order to protect its pointy-end profits.

"The key with something like premium economy is to understand that it’s an economy plus product, not a ‘business class minus’ product – at least from a philosophical perspective, but not as a product definition" McGowan told Australian Business Traveller.

"It’s not seeking to capture people who want to trade down from business class because realistically if you’re a frequent business traveller who has important deals to do when you get to your destination, you need that flat bed and you need an environment that’s conducive to sleep and work so you can be at your peak when you arrive."

"Trading down from business class into premium economy is not the game we’re in. It’s for people in economy who want more space, more exclusivity, and a few details like better catering and wine. It’s also about capturing people who may want not to travel in economy but can’t afford to travel in business class."

When will it happen?

McGowan won’t be drawn on when the airline will make its big reveal of the new premium economy seats, cabin and service – only that any announcement "would be a couple of months before the product is rolled out."

"When we have something to say we want to make sure we have firm timescales. With the new business class we announced in December and we started rolling it out in February, that’s the kind of sensible lead time because you’re not telling people something that’s irrelevant to them because it won’t happen for a year."

David
David

David Flynn

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

am

am

15 Apr 2011

Total posts 586

Sounds like they'll be doing something like QF - a very private/quiet cabin (at least on the A380) with some simply seats, bigger screens and better food/service. Exciting - any hints on a new Y product yet??

David

David

24 Oct 2010

Total posts 2321

AM: I reckon you're on the money, although my thoughts will be a seat that's bewteen QF's Marc Newson offering and Air New Zealand's Spaceseat... will be fascinating to see what they cook up, that's for sure!

As far as economy, we have an article on this next week but the bottom line is that CX is still reciting "watch this space" .

gavin_y

gavin_y

23 Jul 2011

Total posts 3

Looks like things at CX are cooking up. I agree with David's reply, CX would definitely create a product that has the best of both premium economy seats, you can tell CX would not introduce something innovative; cos that would be stepping into dangerous territory, something CX has learnt and resolved recently.

Can't wait for the new article on the Y seats, after David posted that comment it's making me excitied but also annoyed; cos I want to know now LOL.


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