Cathay Earmarks A321neo Aircraft for China Route Expansion

(Bloomberg) -- Cathay Pacific Airways Ltd. intends to deploy Airbus SE A321neo planes scheduled for delivery starting 2020 on Chinese routes, part of a plan that will help the carrier manage costs while expanding and upgrading its network.

Through the use of data technology and more fuel-efficient aircraft, Cathay has managed to increase its revenue per seat mile by about 7 percent, Chief Executive Officer Rupert Hogg said in an interview with Bloomberg News Wednesday. Its cost per seat mile has also been contained, he said.

Cathay has stated “we will make ourselves more productive and keep that cost flat,” Hogg said in Beijing. “That’s roughly what we did last year.”

The new aircraft -- which are more fuel-efficient and will help lower operating costs -- will replace older A320 and A321 aircraft at Cathay’s sister airline Cathay Dragon.

The Hong Kong carrier has faced immense pressure from Chinese airlines rapidly adding direct international routes, a development that has diminished the city’s importance as a hub and led Cathay in 2016 to record its first full-year net loss in eight years. Cathay is on the last leg of a three-year transformation program that’s seen the carrier cut at least 600 jobs, improve service offerings including meals, and keep a tight lid on costs.

The airline has also become what Hogg calls smarter in the way it works. It has invested in data technology to improve productivity, such as making sure its flights are on time more often and there are fewer missed connections, he said.

Last month, Hogg said Cathay is mining customer data to track flying behavior and aspirations to help the carrier understand their likes and dislikes.

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