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Cathay to mine personal data to tailor to premium flyers

Mr Hogg says that Cathay plans to introduce a new business class product, but did not give details.


CATHAY Pacific Airways Ltd is doubling down on mining customer data.

The airline is logging the travel habits of lucrative business class flyers, such as when they want their seat laid flat, in a bid to individually tailor flights for them, chief executive officer Rupert Hogg said in an interview in Singapore on Monday. Cathay seeks to track 23 categories of behaviour and aspirations, 12 of which are particularly important, he said.

The data analysis is helping Cathay "understand what people like, and what they don't like," Mr Hogg said. "It's everything that will make that journey comfortable."

The efforts are part of Cathay's three-year transformation programme which started in 2017 when Mr Hogg assumed the top post. The carrier is seeking to strengthen its financial health after taking a beating from competition also flying from China to the Middle East.

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Still, the plan comes months after Cathay revealed that it became the victim of a hack which exposed personal information on 9.4 million passengers, the biggest data breach ever in the airlines industry.

Mining client data enables precision and is what any consumer company is doing, according to aviation analyst Mohshin Aziz of Maybank Investment Bank Bhd. "By doing this correctly, you can have repeat customers," he added. Cathay's recent security breach should not affect the company's analysis, Mr Mohshin also said.

Separately, the Hong Kong flagship carrier plans to introduce a new product in its business class cabin in the second half, Mr Hogg said, without offering details.

After cutting jobs and slimming down its operating structure, the airline posted its first full-year profit in 2018 following two straight annual losses. As part of the overhaul, the carrier also added international routes and lured customers with improved service offerings and meals for premium flyers.

Echoing the passenger reach of rival Singapore Airlines Ltd, whose operations range from budget to premium customers, Cathay has also changed its view about the low-cost-carrier business. Operating a budget airline was something that Mr Hogg ruled out two years ago at the start of the transformation programme.

"It's a unique segment to the market," he said in a Bloomberg Television interview with Yvonne Mann and Rishaad Salamat on Monday. "It's a stimulatory type of model, and it's changed a lot."

The airline said this month that it is in "active discussions" to buy shares in Hong Kong's only budget carrier from debt-laden Chinese conglomerate HNA Group Co. A successful acquisition of Hong Kong Express Airways Ltd would fill a hole in Cathay's product offering, according to Rahul Kapoor and Chris Muckensturm, analysts at Bloomberg Intelligence.

Cathay has added 31 of the more fuel-efficient Airbus 350s to help start new destinations, and has also cut its overall fuel consumption, Mr Hogg said. The carrier is making Wi-Fi available on its widebodies used for long-haul flights by 2020, and thereafter on its narrow-body aircraft operated by its Cathay Dragon unit.

"We're really focused on productivity rather than cost cutting because productivity is about doing things smarter," the executive said. BLOOMBERG

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