Check Out This Cathay Pacific First Class Fare Sale

I’m always interested by how airlines spend their marketing dollars, especially as it pertains to engaging with social media.

So I was intrigued when I saw a sponsored Facebook ad from Cathay Pacific today, promoting a 35% off sale for first class.

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I love Cathay Pacific first class, and have flown it many times, though always on miles.

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Cathay Pacific first class

That being said, we’re certainly seeing a trend whereby airlines are starting to discount even international first class. For example, a few weeks back you could book transatlantic British Airways first class for ~$2,100 roundtrip.

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British Airways first class

While we’ve long seen British Airways discounting business class, the huge first class discounts seem to be relatively new.

Emirates is similar, and in many markets publishes cheap first class fares.

So I figured maybe Cathay Pacific was trying a similar technique. So, how cheap are these discounted first class tickets which Cathay Pacific is advertising on Facebook? They start at just $18,780 roundtrip between the US and Asia — what a steal!

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I realize there are a lot of wealthy leisure travelers, and I think there’s a market for $6,000-8,000 first class fares to Asia, or for advertising discounted business class fares. But for non-business travelers (presumably the target for a discount sale like this), I imagine the market for $18,000+ first class tickets is very, very small. For that tiny market, I suspect a vast majority of people don’t care about the 35% discount, when you’re still paying that much.

Not surprisingly, availability is quite good using this fare… wonder why. 😉

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Comments

  1. I’m sorry, but “British Airways First Class” is a non sequitur…

    I believe a famous blogger once described it as a very good Business Class. 😉

  2. CX charges $6000-8000 for TPAC J seats. That’s as much as other carriers charge for F and twice what they ask for J.

    Oddly, CX offers very good prices for W and Y. I can’t imagine who is paying those premium prices, though. You could fly equal products for 50-70% less on AA or JL or OZ or NH or AC or SQ or DL. CX just charges the most.

  3. Interestingly, the top 1% of wage earners in the new york city make 493k per year, roughly 10 x more than the average american. Meanwhile a standard economy JFK/HKG roundtrip on CX is $1800. While a first class ticket is 10 x more (no doubt a coincidence).

    According to the economist, New York City has 389,000 millionaires, 2,900 multi-millionaires, and 70 billionaires. Most experts agree that the numbers are actually much higher because high net worth individuals often try to avoid declaring residency in the state due to its high tax rates.

    Maybe a 391,000 person customer base is not enough to fill 24 first class seats ever day (4 flights with 6 seats each). But when you factor in the countless businesses that establish Hong Kong and New York as the financial/business capitals of asia and north america respectively, it’s almost surprising that the seats are ever discounted. My take away: even the ‘rich’ love themselves a good sale!

  4. Is this some kind of joke? They dare to call it sale? Come on!!!
    18 k+ is a lot of money. I would never pay even halg of that in a round trip. Much better spend 2.5 k buying 140 k alaska miles (bonus time) and try to book it for 2 people one way a couple of days before the flight.

  5. @ Liam — I *highly* doubt someone earning $493K per year will spend $18K on an airline ticket. Especially someone living in New York, where $493K doesn’t go quite as far as in other parts of the country, for example.

  6. @Liam
    $493k after tax is $246k in NYC. After housing, expenses, blah blah you aren’t left with much. You have to make well above the 1% threshold to even consider paying that much.

    I make almost $2mm pre-tax and I would never pay $20k for a RT Int’l F airfare. Not only that, but most high earners are in the later stages of their lives (35+) where you typically travel with family and paying $20k x 4 for commercial airfare is ludicrous.

    As for corporate travel, there are very few firms that will comp you full fare F.

  7. It is more than half year salaries for more than half of Hong Kong people.
    *HK individual income median is 16000 HKD (~2060USD)

  8. Other than a company buying those tickets for high executives or important clients, and maybe other than a few celebrities, no one would ever pay that. People don’t become rich by paying 20k on a ticket.

    Another thing to look at is ratios. For example, a household earning 200k post tax a year with no children, can pay for business class trip at let’s say 2.5k per person for once a year at most . Because even then you are pretty much paying more than 2% of your annual income for a short trip. Or maybe they fly teice, then it is almost 5%. I can’t imagine anyone doing that unless they don’t spend money on any other “luxuries”.

    Same goes for richer people. If the household income is 2m, paying for this CX tripfor a husband and a wife is about 40k. Again, this translates to 2% of your income. I highly doubt that anyone would do that and if they do, it would be just once a year at most.

    So no, there is no way that those seats will be filled at that price.

    The real question is however is that does CX want them to be filled or even need them to be filled. Even 1 customer per trip should be more than enough to cover costs for first class at least.

  9. Financial entities in NYC and HK comprise the bulk of CX’s revenue F tickets. I personally know several people who fly back and forth on it every 2 weeks at the very least. And $18k or even full fare is nothing for Wall St. They’ll spend $18k on wine at lunch. It’s absurd but that’s how they roll. As for any “civilian” traveler who would pay this amount, I can’t imagine too many but there are plenty of wealthy people who overpay for lots of things.

  10. I’ve lived in Hong Kong for a decade, working for a fund, and travel back and forth to NYC regularly. I could count on one hand the people I have ever met here who would pay to fly first class longhaul on CX, for work or leisure, and they certainly wouldn’t be responding to Facebook sale ads. They simply won’t fill the seats at these rates.

    Tempted to think this is actually a form of viral marketing to add brand value, and reinforce the CX “premium reputation”.

  11. It’s also a bit misleading, no? How many of those Asian destinations listed are actually served, reliably without equipment swaps, from HKG by aircraft with a first class cabin? This is more like pay ~$19K for first class between NY and HKG and then business class on the remaining leg.

  12. If they fares are in USD then I’d hardly call them a sale …the same flights can be booked out of Austraila for 31-43% less. In fact this happens with a lot of fares in first. Etihad and Emirates being prime examples but also Singapore and Cathay.

  13. I dont know of any company that pays for F. Many companies dont even pay for J these days. You’re lucky if they pay for premium economy. I worked for a (fairly) large consulting and research company a few years ago where even the CEO only flew coach.

  14. @Lucky and @RDS, you both make thoughtful comments to my post and it’s appreciated! From having had a place in NYC for many years I agree that 500k doesn’t go very far….and (I’m sure I will get some heat for this) but 500k/year these days is really ‘just’ a solid (and very respectable) middle class income when adjusted for cost of living (one of the many reasons I find certain politicians’ fervor about taxing the ‘rich’ to be so disingenuous and/or simplistic). That said, with thousands of indisputably wealthy individuals residing in NYC I’m not the least concerned about the viability of CX’s first class service. My point is that the cost of a first class airline ticket is relative. On one hand 18k is a lot of money. But if you have a lot of resources…..have gotten used to traveling a certain way…..have a company (maybe your own) picking up some/most of your flights …..if you are able to ‘write off’ such expenses….or if you are simply desensitized by cost because you often fly privately (even if only domestically)…..well, then 18k might not ‘feel’ like a big hit at all. Bottom line, the airlines charge these fares because there is a market for them (and there is hardly a new price trend here). If the amount is shocking to you, it’s probably because you aren’t the intended customer (individual, corporate, or otherwise). But, with that obnoxious comment made, let’s all hope that a first class ‘fire sale’ doesn’t turn out to be an economic indicator signaling an imminent downturn!

    Thanks as always @Lucky for keeping this a fun forum to read!

  15. Anyone who spends $18k on an airfare doesn’t book their own travel. They have assistants and financial managers who take care of everything. When they need to go to Asia, they’ll tell their handlers to book them to Asia. Their travel plans aren’t gonna be influenced by whether they can save a few grand on a Facebook ad. How bizarre.

  16. In regards to Business Class fare sales, they seem like they are always for TATL as opposed to TPAC. Not that that makes this CX F sale any sort of bargain but it is harder to find good TPAC C tickets originating from the US, generally speaking.

  17. A couple years ago, while booked on an award, I talked with a fellow CF first class passenger who was on a paid ticket LAX-HKG. His trip was only 3-4 nights. He was a consultant/architect on a very large real estate project an American firm was doing in HK.

    I know other people who live comfortably on $18K per year by keeping their expenses down.

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