Hong Kong Haul: Service At Any Cost?.
<FONT SIZE="+3"><B> Hong Kong Haul: Service At Any Cost?</B>
By Jay Campbell
New York - Cathay Pacific's July 1 entry into the New York-Hong Kong market, the airline's second route to the United States after L.A., has proven to be an interesting lesson for the carrier about corporate travel out of New York.
The Hong Kong-based carrier has found that a strategy of emphasizing service over price works well, as most corporate policies in the States allow for business- and first-class travel for the long haul across the continent and the Pacific. Cathay's sales manager for the eastern United States, Fred Ruggiero, said he and his staff have roped in a dozen corporate accounts, each with a unique structure to the deal.
"They're all looking to save money, but each in a different way," said Ruggiero. "I'd be naive to say that there aren't some corporations looking for the best price only, but we won't be the cheapest on the market. A lot of our competitors are free with upgrades. We don't like to upgrade to first and business class, and many accounts appreciate that."
Ruggiero conceded that in some cases, "we're not close to what the other carriers are offering on price." But, he added, "people know our reputation for a good product, so we haven't had to give more just because we're new on the block. We don't have to discount as much."
Cathay already is filling its planes, and did so even during the slower month of July, Ruggiero said. And for corporate business, he said, it doesn't hurt that New York has the highest demand for first-class seats in the world, particularly for a 17 1/2-hour flight like the New York-Hong Kong route.
The new route, serviced by B747-400s, has 18 first-class seats with a 60-inch seat pitch and 56 business-class seats with 50 inches. In August the airline plans to continue its ongoing enhancements by offering espresso and cappuccino in first class, fax and phone service on all flights and personal televisions in every seat, including coach.
The N.Y. flight leaves at 10:15 p.m. and arrives at 6:45 a.m. (two days later, local time), with one fuel stop in Vancouver and no change of plane. This schedule, Ruggiero said, is advantageous because it is the last flight of the evening and enables passengers to arrive before business hours. "For many companies, that's seen as a built-in savings," he said, referring to the room night and day's pay saved.
The stop in Vancouver also has provided the airline marketing opportunities. Cathay is offering a promotion where the purchase of a round-trip Hong Kong flight using American Express earns a free ticket to Vancouver. In addition, one of Cathay's corporate agreements incorporates the company's high-volume traffic to Vancouver. Cathay has passenger rights between all three cities, so travelers can book a round trip between New York and Vancouver as well as New York and Hong Kong.