Wed, Mar 20, 2019 - Page 10 News List

Cathay to mine data to tailor to premium fliers

PRODUCTIVITY:Rupert Hogg said that the airline is focused on ‘doing things smarter’ rather than cost cutting, as he announced a new business class product

Bloomberg

Cathay Pacific Airways Ltd (國泰航空) is doubling down on mining customer data.

The airline is logging the travel habits of lucrative business-class fliers, such as when they want their seat laid flat, in a bid to individually tailor flights for them, chief executive officer Rupert Hogg said in an interview in Singapore on Monday.

Cathay seeks to track 23 categories of behavior and aspirations, 12 of which are particularly important, he said.

The data analysis is helping Cathay “understand what people like and what they don’t like,” Hogg said. “It’s everything that will make that journey comfortable.”

The efforts are part of Cathay’s three-year transformation program that started in 2017 when Hogg assumed the top post.

The carrier is seeking to strengthen its financial health after taking a beating from competition from China to the Middle East.

Still, the plan comes months after Cathay revealed it became the victim of a hack that exposed personal information on 9.4 million passengers, the biggest-ever data breach in the airline industry.

Mining client data enables precision and is what any consumer company is doing, said aviation analyst Mohshin Aziz at Maybank Investment Bank Bhd in Kuala Lumpur.

“By doing this correctly, you can have repeat customers,” Mohshin said, adding that the security breach should not affect the company’s analysis.

The Hong Kong flagship carrier also plans to introduce a new product in its business-class cabin in the second half of the year, Hogg said, without offering details.

After cutting jobs and slimming down its operating structure, the airline last year posted its first full-year profit following two straight annual losses.

As part of the overhaul, it also added international routes and lured customers with improved service offerings and meals for premium fliers.

Echoing the passenger reach of rival Singapore Airlines Ltd, whose operations range from budget to premium customers, Cathay has also changed its view about the low-cost-carrier business.

Operating a budget airline was something that Hogg ruled out two years ago at the start of the transformation program.

“It’s a unique segment to the market,” Hogg told Bloomberg Television. “It’s a stimulatory type of model and it’s changed a lot.”

The airline this month said that it is in “active discussions” to buy shares in Hong Kong’s only budget carrier from debt-laden Chinese conglomerate HNA Group Co (海航集團).

A successful acquisition of Hong Kong Express Airways Ltd (香港快運航空) would fill a hole in Cathay’s product offering, Bloomberg Intelligence analysts Rahul Kapoor and Chris Muckensturm said.

Cathay has added 31 of the more fuel-efficient Airbus SE A350s to help start new destinations, and has also cut its overall fuel consumption, Hogg said.

The carrier is making Wi-Fi available on its wide-bodies used for long-haul flights by next year, and thereafter on its narrow-body aircraft operated by its Cathay Dragon (國泰港龍航空) unit.

“We’re really focused on productivity rather than cost cutting, because productivity is about doing things smarter,” Hogg said.

As for concerns following two fatal crashes involving Boeing Co’s 737 Max aircraft, which Cathay’s fleet does not include, Hogg said that safety has always been the first priority for the industry and always would be.

“It’s important that people get to the root cause, really understand it, and then we learn from that and the whole industry learns,” he said.

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