Cathay Pacific yields being pushed down further amid shrinking travel market

Cathay Pacific, in its CX World Magazine, stated (Apr-2012) a combination of continued economic uncertainty and competitive pressure is putting strain on Cathay Pacific's passenger business. While passenger volumes are currently in line with expectations, "this is coming at the expense of yield," said general manager revenue management James Tong. "The economic situation is causing many companies to cut their travel spend while leisure travellers are starting to adopt a wait-and-see approach. This is resulting in the travel market shrinking and yield being pushed down further," he added. The carrier also noted that year-on-year comparisons show that yield has been dropping and there are clear signs the gap is widening. "The problem started in the Economy cabin in the last quarter of 2011, but recently our premium business has also been coming under pressure," said Mr Tong. Out of the key Hong Kong market, many corporates, in particular financial institutions, are paring back travel plans, which is affecting business traffic on important routes such as Singapore and New York. "The leisure market is holding up during peaks such as Chinese New Year and Easter but the low seasons are becoming quieter than usual," Mr Tong noted. Despite the concerns, Mr Tong said he remains positive about the impact of new product developments such as Premium Economy, where advance bookings are "quite healthy". There will also be opportunities to sell the network through six new Dragonair destinations - Xi'an, Guilin, Jeju, Taichung, Chiang Mai and Clark. [more - original PR]