Cathay Pacific Wants to Become a “Premium Lifestyle Brand” as Core Business Disappears

For 75-years, Hong Kong-based Cathay Pacific was in the glamorous but sometimes unprofitable business of flying people around the world. COVID-19, however, has made the challenges of trying to run a profitable airline harder than ever and unsurprisingly, more airlines than ever have been pushed over the edge while others, like Cathay Pacific, have barely survived the devastating effects of the pandemic.

And unlike some airlines, especially in North America and the Middle East, Cathay Pacific still doesn’t see a clear way out of the pandemic. Passenger numbers were down 99.2 per cent in May compared to the same month in 2019. The majority of its fleet remains grounded and Hong Kong’s tough policy to combat the virus means recovery will be incredibly slow.

So, with its core business decimated, what is Cathay Pacific to do? It would appear that we now have an answer… Cathay Pacific is to become a “premium travel lifestyle brand” which will seek to make money out of customers from lots of other revenue streams other than its loss-making airline business.

Or at least, Cathay Pacific will be just a small part of the new lifestyle brand. The umbrella company will be known simply as Cathay and will be used to combine the airline business with shopping, spending, hotels and wellness offers.

The group announced the new concept on Monday although few real details have actually been revealed of what the company will offer aside from news that Cathay Pacific, its frequent flyer club Marco Polo Club and Asia Miles will come together in the new brand.

At its core, however, is a new co-branded credit card – pretty standard fare for most international airlines. Expect customers to be encouraged to buy goods and services through a special Cathay portal in order to earn Airmiles and other incentives – at some point in the future, Hong Kongers might even be allowed to spend then on air tickets.

Cathay’s chief executive Augustus Tang was keen to talk up the brand on Monday: “Our ability to enter the travel lifestyle space and the success of this strategy is built upon the enduring strength, trust and respect that Cathay Pacific has established over 75 years of accomplishments, and the hard work and dedication of our people around the world.”

“At the heart of the ‘Cathay’ brand is a celebration of all the best things we love – and have missed – about travel. We are very proud to have been connecting our customers with people, places and experiences around the world through the joy of travel,” he continued.

For the time being, the Cathay lifestyle brand will only be actively promoted in Hong Kong while the airline will continue to push its Cathay Pacific brand everywhere else in the world.

Over time, Tang said, Cathay hopes to expand its premium lifestyle brand into other markets. We might even know what the brand stands for by that point.