Cathay Pacific to revamp business class

Cathay Pacific Airways, Hong Kong's biggest carrier, will spend more than HK$1 billion ($131 million) introducing new business-class seats to fend off competition for lucrative premium travellers.

The wing-back seats will be fitted in 50 long-haul planes by February, 2013, the carrier said in a statement. They will first be used on flights to Sydney from March.

Incoming chief executive officer John Slosar will oversee the revamp as Emirates and Singapore Airlines woo Hong Kong travelers with Airbus SAS A380s, and US carriers add China flights on surging economic growth. British Airways and Deutsche Lufthansa have also unveiled new first-class cabins this year as travel rebounds from the global recession.

"The premium carriers in this region have to be very mindful of what's going on in the Middle East," said Derek Sadubin, chief operating officer at consultants Centre for Asia- Pacific Aviation. "And, there's obviously some very strong transpacific rivals."

Cathay will install the new business-class seats in 30 Boeing 777-300 ERs and 20 Airbus SAS A330-300. The carrier will also roll out new cabin-crew uniforms as part of the revamp.

The airline is overhauling its business-class offering as Singapore Airlines and Emirates fly their flagship A380s to Hong Kong. In September, it opened The Cabin, its fourth airport lounge in Hong Kong, which offers Apple iPads and a health bar. The airline is also working on renovating its main lounge, The Wing.

Korean Air, United

Korean Air, which competes with Cathay on China to US routes, will also begin flying A380s next year as it seeks to boost premium-class sales to 50 percent of overall revenue. United Continental Holdings and Delta Air Lines are adding China services, lured by growth in the world's most populous nation that is three times the pace in the US.

Cathay, which generates about half of its sales in China and Hong Kong, rose 3.2 percent to close at HK$24.10 in Hong Kong today, before the announcement. The stock has risen 66 percent this year, the best performance on the benchmark Hang Seng Index.

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Cathay will begin flying to Chicago and Abu Dhabi next year, as well as boosting services to New York and Toronto, as the economic pickup spurs business and leisure travel. Overall, it plans to increase capacity 11 percent. It will also receive a record 15 new planes, including six freighters.

Globally, first and business-class passenger traffic rose 9.2 percent in the first nine months of the year, according to the International Air Transport Association. Overall passenger traffic jumped 8.5 percent through October, with a 10 percent increase in the Asia-Pacific region, the trade group said.

John Slosar will take over as Cathay CEO in April from Tony Tyler, who is leaving to become IATA's director general.

Bloomberg