Cathay Pacific has announced a brand new partnership with Air Canada. As part of the new deal, Cathay will be codesharing with Air Canada on select domestic flights departing from Toronto and Vancouver to allow for more connections, while Air Canada will be codesharing with Cathay Pacific and Cathay Dragon on South-east Asian routes.
Cathay Pacific Boeing 777-300ER
This represents a fantastic new opportunity for Air Canada passengers travelling to South-east Asia, a region where Air Canada doesn’t really have a lot of coverage. Meanwhile, Cathay passengers – who previously had access to many Canadian destinations through WestJet – are going to be able to fly between Canada with an airline that has a premium reputation. Unfortunately, this means that the new partnership doesn’t actually represent an expansion of the Cathay Pacific route network.
As part of the new partnership, Cathay Pacific and Air Canada will also codeshare on three daily flights from Vancouver to Hong Kong, as well as 17 weekly flights from Toronto to Hong Kong. This creates a monopoly of sorts in the Canada-Hong Kong flight market.
Motives Behind The Change
While it may initially seem odd that two airlines that once fiercely compete with one another are currently working together on many different routes, it makes sense after considering recent events, specifically regarding Hong Kong Airlines’ announcement that they will be starting daily service into Vancouver.
Although Hong Kong Airlines’ planned expansion into Canada is tiny compared to Cathay’s current footprint into the region, it’s still a threat to the duopoly that Air Canada and Cathay Pacific currently enjoy. As such, both airlines’ appear to be willing to set their differences aside in order to get passengers to move away from Hong Kong Airlines.
With the new partnership, passengers travelling with Air Canada and Cathay Pacific will be able to take advantage of reciprocal baggage through-check and reciprocal mileage accrual opportunities – services that Hong Kong Airlines passengers will not be able to take advantage of, creating a selling point for passengers seeking a more seamless experience with two “premium” carriers.
Will The Partnership Work?
While the partnership provides many incredible opportunities for passengers, people will not choose Cathay Pacific and Air Canada over Hong Kong Airlines unless their partnership actively touted by both airlines and heavily advertised by both airlines, given that general public is oblivious to the world of airline partnerships and collaborations.
Additionally, Hong Kong Airlines is known for offering rock-bottom fares on many flights. We’re now seeing that the airline is pricing their Business Class tickets at rates cheaper than many discounted Cathay Pacific Economy fares. With those rock bottom fares, price-savvy passengers may choose Hong Kong Airlines instead.
That’s Cheap for Business Class…
This means that Cathay and Air Canada need to price their tickets in a manner that is competitive. While it would be ridiculous to offer fares that match Hong Kong Airlines’ fares – which would result in severe losses – both airlines need to get the word out about the heavily discounted fares that we’re seeing more and more often.
Ouch. This is about to get messy for Hong Kong Airlines.