BTN Europe presents an overview of business travel and MICE predictions for this year
James Ginns is Cathay Pacific’s new regional general manager of Europe, responsible for the airline’s strategic and business development in Europe. Educated at Oxford University, James joined Swire & Sons in 1991, and has held a number of key positions at Cathay Pacific over the last 26 years – most recently as director of service delivery
There has never been such competition as today. How is Cathay Pacific going to respond?Competition in the broad perspective has definitely intensified, there’s no question, but I’d say from a European perspective we are holding up pretty well. Our market share is holding, the business is generally pretty healthy and we’re still very much in expansion mode. We’ve recently announced new routes opening next year to Dublin, Brussels and Copenhagen. We’ve suspended Dusseldorf, but that’s related to where we can get the best return for the aircraft resource we are using. That takes us to 15 European points once those destinations are brought online next year.
Why announce three routes at once?Simply because we have the aircraft now – the A350-900 allows us to explore these largely uncontested markets of secondary points in Europe, where the load is less and it wouldn’t support a larger aircraft like the B777-300ER. We’ve seen the potential, which is why we tweaked the order for the A350s to have more of the dash 900s and fewer of the dash 1000s.
What went wrong with Dusseldorf? Was the data wrong?The data told us that the market was strong, and we were satisfied with most of the passenger loads. The intent was right and it’s only a suspension; we feel we could do better elsewhere for now, but we intend to return.
Tell us about the new Dublin route.Dublin is very interesting. We’ve always served it via Heathrow, but until I visited I didn’t realise there are 100 companies from Ireland who are operating within China, employing 100,000 people. The investment into China is €8 billion, so there’s a lot of corporate activity. Passenger numbers on the Hong Kong route reached 40,000 last year, so we would expect that to grow quickly when there are direct flights [four times weekly]. Hong Kong imports more from Ireland than it exports, including agri-business and fresh produce
What about the Manchester expansion?We’ve taken Manchester progressively and we are going daily in December. The links between Manchester and China are growing, and we’re benefitting from that. There’s a big student market from China and Hong Kong, and the cargo market is booming. We’ve switched to the A350, which has a reasonable cargo payload. As I walked into the warehouse there was a 12-tonne shipment of milk powder going to China and that was the third shipment in a few days of that sort of weight.
How will you compete in business class with new carriers entering the market?It’s a constant effort to keep on top and we’re definitely not complacent. We’ve just trialled a new business-class proposition from Gatwick this year, which is a dine-on-demand concept with a new food proposition, and we look forward to fully rolling it out next year. We think we are taking things up to a new level. The business-class seat was rated the best, and the current seat on the A350 is an evolution of that. There were some quality issues with the build initially, but we feel we’ve got those under control. We’ve also had a new lounge built at Heathrow, and we wanted to expand because we went from three flights to five over the period.
What about first class?We’ve tailored it to specific markets. The A350 doesn’t have it but the B777 does, so it’s on the Heathrow, Milan, Paris and Frankfurt routes, and we’re pretty happy with the level of business. There is an ongoing first-class market, but only in those cities.
And premium economy?It’s proving very popular. We’re very pleased we took the initiative to do it.
Is it difficult to price?Yes, you need to be quite careful. The business class tends to be a flat bed, so it makes the pricing easier, but there is a niche for premium economy.
What about 10-across in economy – is it inevitable on the B777 aircraft?The industry is moving in that direction on the B777-300ER and it will become an industry standard. We were one of the last in the queue to go in that direction. When we do it we will have a brand new economy-class seat with screen size increases and new inflight entertainment.
Economy comes down to price, doesn’t it?It’s pretty cut throat, but it comes back to the brand, and that’s something we will continue to compete on. It’s definitely a battle though.
Would you ever charge for long-haul economy food?We will allow people to order their food online and pay extra to get an upgraded option next year, but we won’t be charging people for their normal food, no.
It sounds like things are tough in Hong Kong.We’ve announced 600 redundancies – the majority are different management levels. It hasn’t affected flight attendants, front-line pilots or ground staff and the airline is still expanding by four to five per cent.
You have codeshares with Lufthansa in Europe. Why?Lufthansa's routes serve into the points we serve – Hamburg to Frankfurt, for instance. We don’t serve Hamburg, so Lufthansa feeds into Frankfurt and onto our long haul from there.
How is the corporate market for you?We are seeing encouraging growth and we’re pretty confident about the corporate proposition. We’re always looking for chances to add capacity into this market and we’ve done so to Manchester, Gatwick and soon to be Dublin.
Why Gatwick and not Heathrow?It’s a very good airport to sue for access to both the south east and south west; it's pretty accessible from Canary Wharf, Kent and Cambridgeshire. Corporates use it and cargo is strong there.
When will your aircraft have wifi?It’s on the A350 now, but not the B777 fleet. It will be rolled out, though, and the whole long-haul fleet will be connected by 2020. There’s a demand from the corporate market for it.
Any other plans?We will introduce self-service check-in kiosks at Gatwick and plan to do the same at Heathrow next year.