Cathay Pacific is adamant that if it launches a premium economy cabin the product must touch on every aspect of the passenger experience and offer more than additional legroom.
Although there have been strong hints over the past year from Cathay’s chairman and chief executive that the carrier will proceed with a premium cabin, head of product Alex McGowan says a formal decision will be made later this year. But that has not stopped McGowan and his team from outlining what a potential premium economy cabin on Cathay would consist of.
If the cabin eventuates, it will likely only be featured on the carrier’s long-haul aircraft where the difference – and thus market potential – between economy class and business class is the greatest. On Cathay’s regional aircraft, the premium product is a large-style seat, not bed, which could compete with a larger economy-style seat. Regional flight times are in the low single digits while long-haul flights stretch up to 16 hours, making the proposition of additional comfort more appealing.
“The market for premium economy is certainly a long-haul market,” McGowan says. Yet premium economy is nearly absent on Asian carriers, who not only make their bread and butter on long-haul routes but whose fleets can lack narrow-body aircraft.
That disparity, McGowan says, can be answered by complacency. “It’s competitive pressure. It’s inertia amongst some Asian carriers, I think, that the model has worked in the past and why seek to change it?”
For Cathay, the answer is the world’s largest country. “China will be growth story of next decade across the board—first class, business class, premium economy, and economy,” McGowan says.
China Southern has expanded to more aircraft its premium economy cabin that merely offers additional legroom, an enhancement that will only be the starting point for Cathay’s possible premium economy cabin. “Legroom is an important driver of passenger satisfaction but it is certainly not the only driver of passenger satisfaction. The entire experience is what counts,” McGowan says.
Cathay would offer a differentiated ground experience, from check-in to boarding, and superior aircraft experience, from food and beverages to expedited deplaning. The physical seat with a larger entertainment screen will also matter, and there McGowan says Cathay is eyeing “a seat which is substantially wider with substantially more legroom”.
Aisle access is equally critical. “You’re six hours into a 12 hour flight and the person next to you is sound asleep. Is it possible to get out into the aisle without disturbing them, or is it possible to disturb them only briefly?” That consideration leads McGowan to look favorably on traditional configurations like 2-4-2 that place every passenger within one seat of an aisle, the so-called “single excuse” layout.
Details also matter, ranging from how passengers are greeted onboard, amenity kits, offering more storage space, and creating the ambience of a private and secluded cabin.
Creating a high-value product means Cathay cannot undercut it. United Airlines offers its elite frequent flyers access to its “Economy Plus” product that primarily offers additional legroom, but Cathay’s frequent fliers should not expect an upgrade to premium economy anymore than they should expect an upgrade to business class.
“We have a well-established policy that our goal is to segment the market. We want to sell the product we have onboard to passengers who are willing to pay for that,” McGowan says. Cathay will not “use a premium economy cabin as some overstore cabin rather than a truly different product.”
That is also driven by long-term financials. “Enabling future investment will only come about through ensuring that present investments are positive in terms of return of capital.”
To receive an appropriate return of capital, Cathay is taking a measured approach to cabin planning by selecting dependable seat designs rather than have “innovation for its own sake”.
“It’s easy in this business to get carried away,” McGowan says. “I think some of the fixed-back-shell premium economy concepts that have been re-launched in the market recently have miss-judged the market either because they are not space efficient and would potentially require higher prices to justify the space, or they’re not as intrinsically comfortable as a big, wide seat might be.”
Indeed earlier this year Air New Zealand announced it would remove an entire row of seats from its custom-designed premium economy cabin after passengers complained of not having enough legroom.
Cathay has made its own seating blunders but is learning from them. Cathay was the launch customer for the B/E Aerospace Icon fixed-back shell seat that offered passengers their own cocoon free of seats reclining into them, but meant passengers could not recline as much in their seat.
McGowan admits the Icon seat was well-received on short daytime flights but received negative feedback from overnight passengers. As a result, McGowan deems a fixed-back shell premium economy seat a “sub-optimal product”.