When even Cathay goes budget, the trend is clear

There’s always been something grimly appropriate about the world’s most unequal rich society being home to one of its least affordable aviation sectors. Hong Kong’s Cathay Pacific Airways has historically been so resistant to the idea of budget airlines that the city’s dominant carrier once fought (and won) a three-year regulatory battle to stop Qantas Airways from setting one up in the territory. That era seems over, with the company saying last week that it was in talks to buy a stake in Hong Kong Express Airways, the discount carrier owned by cash-strapped HNA Group. Asked what had prompted the shift after annual results Wednesday, Chairman John Slosar seemed to be paraphrasing a remark attributed to John Maynard Keynes: “You have to be willing to change when events change, when opportunities present themselves,” he said. So what facts have changed? For one thing, Cathay’s business model is already looking more and more like that of a budget carrier. It’s working its fleet harder, with each plane in 2018 carrying out an average of 386 flights, compared with 366 in 2012. That’s still not close to the productivity achieved by the likes of Ryanair and AirAsia, but it’s heading in the right direction. More to the point, the company is making an ever-growing share of its money from selling things other than passenger and cargo tickets, a turn in the direction of the likes of AirAsia.<br/>