How airlines, including Hong Kong’s Cathay Pacific, are navigating Covid-19

posted on 14th September 2020 by Eddie Saunders
How airlines, including Hong Kong’s Cathay Pacific, are navigating Covid-19

By Danny Lee,

From delivering in-flight meals to residents near the airport to promoting plane merchandise, the Covid-19 pandemic has sparked creative efforts among major airlines to compensate, if only slightly, for the loss of their biggest income stream – ticket sales.

Hong Kong flag carrier Cathay Pacific Airways has started offering doorstep food deliveries to nearby homes in the Tung Chung community in recent weeks. Its catering arm used to prepare 83,000 meals for passengers on 293 flights a day, or an average of 283 meals per flight, but there are now just a few dozen Hong Kong flights per day.

On average just 22 passengers per plane came through Hong Kong’s airport throughout August.

The meals-on-wheels scheme initially only targeted airport workers, but has been expanded to cover the nearby Tung Chung district, offering simple in-flight food for those craving airline meals.

“We understand that many people working in the airport area are interested in being able to easily buy takeaway lunch and dinner meals to maintain proper social distancing [and we are] offering such takeaway services to people within the airport community and Tung Chung neighbourhood,” a Cathay spokeswoman said.

A similar tactic has also been adopted by rival airline caterer Gate Gourmet, which turned to deliverable meals for the airport community so its kitchens there could continue running.

Airport worker Wong Hei-shun said the HK$40 (US$5) chicken curry with rice he ordered from Cathay Pacific was more affordable than at local fast-food outlets, but added the quality of actual in-flight meals was better than the one delivered.

“The food is OK, but the rice was too watery. The curry and chicken are fair,” he said.

In recent weeks, Cathay Pacific has rolled out a new range of merchandise online based around its retired Boeing 747 workhorse, in an even greater effort to push the airline group’s e-commerce sales among its 12 million Asia Miles members worldwide.

In line with an ambition to become the Amazon of airline shopping portals, the platform offers users a chance to receive an Apple MacBook on accumulating 222,520 air miles, or to pay for the bulk of the laptop in cash for HK$10,000. Racking up 21,650 miles can secure a Breville kettle.

The ailing Hong Kong Airlines, the sole commercial carrier in Hong Kong not owned by Cathay, has been surviving its near-wipeout in passenger revenue by mounting charters and converted cargo-only flights.

With an eye on the future and its new reality, it hopes its big push towards an online shopping portal – in a similar vein to Cathay’s Asia Miles – would garner some revenue.

“We are working with our key retail partner to develop and expand online sales, enabling us to offer a wider selection of products with greater convenience for our customers, and having these delivered to their homes,” a Hong Kong Airlines spokeswoman said.

The types of products available from various airlines have moved from common perishable and wearable items to limited edition and once-in-a-lifetime experiences.

Thai Airways, whose multi-year losses forced the national carrier into bankruptcy protection, opened a plane-themed restaurant this month decked out with aircraft seats, cabin crew service and boarding pass souvenirs to enhance the dining experience.

Qantas has been among the most opportunistic of airlines, putting out an offer last month for just A$25 (HK$141) on a “care package” for flying fans, featuring its vaunted business-class pyjamas, amenity kit and some in-flight snacks – which sold out in hours. The carrier also brought back its semi-regular sightseeing day trip over Antarctica. That flight, which lasts up to 14 hours, costs less than HK$7,000.

British Airways turned to art lovers in July. It displayed 17 pieces of its large and prized art collection in airport lounges and at its headquarters, raising HK$22 million from selling pieces by famous artists like Bridget Riley and Damien Hirst.

With borders closed, airlines are even making use of grounded planes, albeit in a limited way.

Last month, Taiwanese carriers offered to fly residents around the self-ruled island, from Taipei and back, to salve the desire of travel-deprived passengers, who snapped up tickets.

In the same month, Japan’s All Nippon Airways called upon one of its new – and costly – 520-seat Airbus A380 to offer a Hawaiian-themed 90-minute “air excursion” to nowhere. Demand outstripped supply for the unique event and more than 330 people were willing to fork out HK$1,000 in economy to HK$3,650 in first class.

Singapore Airlines is also reportedly planning its own flight to nowhere as many Asian countries adapt to rigidly closed borders and lack of domestic flights to keep aviation fans happy.

Simon Lee Siu-po, senior lecturer at Chinese University‘s business school, said Covid-19 showed airlines needed to find other ways to make money.

“When you compare with a retailer, you see there is a lot of potential revenue for an airline … like a shopping mall of the sky. That diversification and exploration of new channels is necessary in the long run,” Lee said.

He added: “The key is they bring passengers to the destination – but customers have the spending power – so airlines are helping them to spend – but by using e-commerce – helps that purchasing process.”