New Waves...New Ways

Industry Leaders Outline The Future

The travel and tourism industry has never looked as promising and challenging as it is at present. New developments and changes have forced the travel trade to re-define their path and strategies. Express Travel & Tourism spoke to a cross section of the trade, highlighting what the future has in store.

Cathay Pacific

Consolidation Is The Key

Rupert Bray

Rupert Bray, country manager - India, Nepal and Bangladesh, feels that the Indian aviation market is very under-served and there is a lot than can be done…

The Company

Cathay Pacific started its operations in 1948. It began by operating passenger flights to Manila, Bangkok, Singapore and Shanghai. For almost 60 years, the airline has continued to grow, making substantial investments to develop fleet, services and infrastructure. And the fleet strength, one of the youngest and modern has grown to 95 all-wide-body aircraft. "Since 1997, we have acquired 48 aircraft, each with a HK$1 billion-plus price tag. We have ordered nine more. By September 2006, our 60th Anniversary. Cathay Pacific will have 100 aircraft," articulated Bray. Cathay network covers 90 destinations in 33 countries and territories worldwide With an international hub at the Hong Kong International Airport, Cathay Pacific is also the founding member of the OneWorld alliance, thereby offerings its passengers nearly 600 destinations along with its partners - Aer Lingus, American Airlines, British Airways, Finnair, Iberia, LAN and Qantas.

Business Strategy

The airline is very clear on its focus for the Indian market, it's the high-end Indian traveller and corporate traveller, who are a niche but a potential segment. Being a premium carrier, the main objective of the airline is to provide high quality service. Says Rupert Bray, "The Indian market is the world's biggest aviation market and there is a big labour movement especially to Dubai. To further cater to the Indian market, we hire Indian cabin crew and our catering is skewed to the Indian traveller, which is catered by TAJ SATS and we have meet and assist programmes at the Hong Kong International Airport."

Even the growth of the airline has been substantial and last year the airline registered a 35 per cent growth in terms of increased capacity. With regards to the trade, Bray states, “We are a very trade friendly airline and we hold our reputation very dear. Further to facilitate passenger satisfaction, we have introduced the e-ticketing concept in August. Our distribution costs are handled with the use of our website - cxagents.com that has done away with the hassles of paperwork. Even our ADMs are internet-based and finally, we are working with the GDS to reduce costs, as they are quite high. The Internet has changed everything and international aviation is no exception. While it has made things easier it has not made the travel agent any less relevant. E-ticketing notwithstanding, passengers still rely on the travel agent as their link to the airline. Airlines and travel agents are travel partners. E-ticketing will not distance agents from the travellers. It will merely change the medium of delivery.

On the airline-tourism nexus, I think price sensitivity is the key distinguishing factor between business and leisure travellers on any route. For business travellers, like I mentioned earlier, our emphasis on a service driven product is an advantage. On the leisure tourism front, we are working with CNTA and HKTB to create tour packages that stitch the two destinations together and add value for our clients. We have a great deal of interest in promoting China as a prime tourism destination in India and we work very closely with the Chinese Consulate in Mumbai and CNTA back in China. It is still premature to outline the plans.”

The deregulation of the Indian skies has seen numerous new start-ups but Cathay is not afraid of competition. Exerts Bray, “We focus on what we do best and want to maintain our position. To keep abreast, we occasionally bring out promotional fares as and when required. And finally, we feel India is the number one destination for Cathay after China. Subsequently, being part of the OneWorld alliance has been very beneficial and that will remain as the part of the core strategy of the airline.”

Finally, Cathay also does a lot of promotional activities to enhance its presence; some of them include the Students Wilderness programmes, trade cricket tournaments and much more.

Future Plans

With a firm base in the Indian market, Cathay wants to consolidate its position. “The Indian market is fast gaining importance but has a long way to go when compared to other destinations. We fly triple daily to London and Sydney so that puts things in context. We feel very strongly that the Hong Kong market out of India is under-served and there is much demand that we cannot tap simply because we do not have the frequency, reflected in our consistently high load factors,” stated Bray.

He further added, “We operate from just two main metros, Mumbai and Delhi with four flights a week. We certainly have a better response from Mumbai rather than Delhi and considering this, we would look at increasing frequencies from these two destinations but all of this depends on government approval. We believe that there is a lot more scope in the Indian market but would like to take it one step at a time. Further, Cathay Pacific has a strong reputation for the service it provides. But we are not a very big airline out of India and the biggest opportunity as I see it, is enhancing traffic from India to China and vice versa. The recent developments in relationships between India and China have been a boon. Both of these countries have a population of over a billion and fast growing economies promising double digit GDP growth. Both exchange considerable business traffic.”

Vision

The current Indian aviation boom is one of the most exciting periods. However, this has been built up over the years and there will be a lot of market stimulation. This boom will also be sustained, as this is just the beginning for India. There is another aspect that we could see is that the Indian market is under-served, and there is need for more connections and frequencies. Airlines should look at the younger generation, as that is where the travel is going to come from in future.