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 CATHAY PLANS NEW PRODUCTS TO ATTRACT PASSENGERS

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PostSubject: CATHAY PLANS NEW PRODUCTS TO ATTRACT PASSENGERS   Wed Dec 14, 2011 9:54 pm

December 12, 2011
Cathay Pacific Airways, Hong Kong's dominant carrier, plans new economy class products to maintain passenger numbers in 2012 amid a volatile global economy, its chief executive said on Monday.

Cathay will introduce a new premium economy class with more space and extras such as touch-screen personal televisions and mobile device connectivity on long-haul flights from March 2012.

A new economy class seat on the majority of long-haul aircraft from March will feature a cradle mechanism to enhance the level of comfort in the recline position and more personal storage space, the company said in a statement.

"It looks like the world economy is facing some challenges, so that is probably going to mean we will have some challenges too," John Slosar said after an industry meeting.

Slosar said passenger business had so far not been affected by the European debt crisis and Christmas passenger throughput looked good.

The International Air Transport Association (IATA) cut its forecast for airline industry profits by a quarter to USD$3.5 billion for 2012 and warned the industry could plunge to an USD$8.3 billion loss if Europe's debt problems triggered another banking crisis.

"Cargo was weak in the last quarter of this year and I suspect it will carry on in 2012," Slosar said.

Continued weak demand for air freight in China and Hong Kong pushed cargo throughput at Cathay down 17.5 percent in October from a year earlier, although the passenger numbers rose 3.8 percent.

Slosar also said various taxes imposed by governments would dampen demand and give people a reason not to travel.

From January 1, the European Union will require all airlines flying to Europe to be included in the Emissions Trading Scheme, a system that forces polluters to buy permits for each tonne of carbon dioxide they emit above a certain cap.

Slosar said the ETS would add about HK$50 (USD$6.40) per ticket from Hong Kong to Europe in the first year.

(Reuters)

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