Cathay Pacific Cargo is moving to up its online bookings game. Management intends to have a fully-fledged booking engine up and running before the end of this year. This should lay the foundation for more sophisticated functionality down the road.
“We do have online booking capability, but not widespread for all agents,” said cargo director Tom Owen in Hong Kong. “We’re expecting to introduce this year a 24/7, all-agent-available booking engine, which will for the first time allow not just our block space agents but any agent who wants to make a booking on us to make that booking.”
To get there, first all rates have to be digitized, which should be completed by the end of the second quarter.
Ultimately, Owen aims for functionality similar to the passenger business, where a sale feeds back into the pricing structure once it is completed.
The air freight industry has come some way from the historical practice of setting rates twice a year, and the rapid changes in demand and capacity seen as Covid-19 spread last year forced airlines to adjust their pricing frequently.
According to Freightos, which offers online booking capabilities with a number of airline customers as well as air freight pricing information (the latter through a separate channel), online bookings and carriers’ appetites for more advanced pricing mechanisms for these have received a shot in the arm from the repercussions of the pandemic.
“Dynamic pricing is picking up,” says Amit Agarwal, an air digitization expert who has worked with DHL and DSV. “It takes away a lot of friction between an airline and a forwarder.”
Among the early adopters of dynamic pricing for online bookings have been Lufthansa and Air France KLM. According to the latter, the combination of real-time online bookings and dynamic pricing saves airlines and forwarders billions in changing fees, unused capacity and extra work.
Agarwal reckons that 14 or 15 airlines are using dynamic pricing at this point, but pointed out that a lot of carriers have still not linked their pricing to capacity and booking platforms.
“We’re not where we need to be yet in terms of dynamic pricing,” said Owen. “It’s obviously a very complicated area to do well and work is now under way.” He reckons it will still take several years to offer the comprehensive dynamic pricing that Cathay Cargo envisages being delivered through its website.
Like other carriers, Cathay has kept adjusting its rates in line with market developments over the past year.
“Our pricing flexibility, our pricing agility, has been unprecedented in 2020 on the free sale space,” Owen said.
He stressed that these developments do not indicate a shift from long-term relationships with forwarders based on a consistent schedule towards a more ad hoc strategy of deploying capacity and marketing it. While there have been a lot more opportunities for short-term operations and charter work, schedule integrity has remained the bedrock of Cathay’s cargo business, he said.
The airline has continued with its space agreements with customers through the pandemic, albeit at higher rates reflecting the market conditions, he continued, adding that for their part, forwarders have been understanding.
“It’s been far less confrontational than might have been be expected. There has been an understanding on both sides of the unprecedented market dynamics driving the pricing. We have spent time building long-term relationships with them and we’re not out to damage these for short-term gain,” he emphasized.
Ian Putzger
