Air travel updates

Airline companies worldwide have been hard-pushed to come up with ways to make their respective companies more attractive to travelers. It doesn’t really matter now whether you have the name and the history, market edge is the name of the game. And what gives the company that edge over competitors?

Value for money is the current mantra. However, recent congressional public fora show that government is now looking into the proliferation of advertisements from various airlines, offering low rates but misleading the traveler on the fine prints. Well – for one – the cheap fare for traveling without a check-in luggage is really a great advantage for men whose jobs require them to hop from one place to the next for a couple of days. Or for those who work in Manila and would come home on weekends to Cebu or wherever. Women just have to get their creams and perfumes in prescribed airline security sizes to travel with just a cabin luggage.

In his first quarter update, Cathay Pacific Chief Executive John Slosar assessed CX 2011 annual profit of HK$5.5 billion (third highest recorded in the last 10 years of the company’s financial standing) as “a creditable performance.” One main concern is the sizeable slump in cargo loads when corporations got hit in the global crises of 2008 and 2009. However, JPMorgan Chase & Co. analyst Corrine Png is optimistic of a global air cargo recovery as she notes: “The near-term outlook is challenging but hopefully we’ll have some potential upside surprises from the tech sector’s restocking and new iPad shipments (from USA) in the second half of this year.”

Another main concern is high fuel cost. CX ‘s Slosar notes that “gross fuel costs soared by more than HK$12 billion last year and the high price of jet kerosene remains our greatest worry. At the time of this writing, fuel costs US$140/barrel and the price seems to move in only one direction – up.

The fuel situation is causing headaches for the entire (travel) industry at the moment and increased costs will have to be passed onto the customer in some form – which may further reduce demand at a time when margins are already very tight…but the simple truth is that high fuel prices are not good for the world economy.”

Indeed, as in all other aspects of the global economy, commodities get more expensive as fuel price goes higher. But as the saying goes – when the going gets tough, it is the tough that gets going!

Cebu Pacific, like Cathay Pacific, has been investing on new aircraft to strengthen its fleet. CEB has been hiring young and passionate pilots to bring new blood to its force. It has widened its reach with new destinations – both local and foreign.

The name of the game is market edge! CX President Chris Pratt points out: “All of this calls for a cautious, pragmatic posture in running the airline in the short term while maintaining a clear focus on the long term picture.” And by that he means buying new aircraft, offering new product like the CX recently launched Premium Economy – to address the significant drop in the economy class yield, refurbishing and opening airport lounges, as well as coming up with the new Cathay Pacific Cargo Terminal.

Slosar reinforces: “These investments in products and services give passengers a reason to come back to CX. It is important work and more good progress will be made in 2012.”

So, if you want to travel comfortably in Economy, then try out Cathay Pacific’s new Premium Economy. Why pay for Business Class when there are now wider berths and better amenities in Economy?

Travel wisely…and be safe!