My hometown carrier, Cathay Pacific (CPCAY) , has shown a mastery of public relations by owning an error that saw it sell first-class tickets at a fraction of their real price.
It's about time Cathay, which might be an interesting value stock for investors, saw the arrival of some good news.
The carrier has posted losses for two years, has perennially unhappy pilots, and is under investigation for violating the privacy of its frequent flyers - including yours truly - during a hacking episode.
Now some lucky passengers will be sipping champagne and nibbling on caviar with plenty of bucks in their back pocket to blow when they arrive at JFK from Saigon or Danang.
On New Year's Day, Cathay started selling first-class and business-class seats from Vietnam for shock discounts. It sounds like a fat-finger mistake led to an employee inputting prices of around HK$6,500 (US$830) for a ticket to New York City instead of HK$65,000 (US$8,300).
The Hong Kong based carrier has owned up on its Twitter (TWTR) feed.
Under #Promisemadepromisekept and #lessonlearnt, the carrier said it would make good on those prices.
"We made a mistake but we look forward to welcoming you on board with your ticket issued. Hope this will make your 2019 special too!"
Cathay seems to be learning its lesson. It's had a 2.4% price bump since a brief blip when word leaked out about the mistake.
The airline took a lot of heat after it admitted in October that hackers had broken into the personal information of about 9.4 million of its frequent flyers. I got an email telling me my data had been breached, but not a lot else.
To make matters worse, it emerged that the airline had kept quiet about the breach for seven months after it found out about it. Now it's subject to a class-action lawsuit, and Hong Kong's privacy commissioner says there are "reasonable grounds" for an investigation he has launched into whether Cathay broke privacy rules.
Now, I'm not too bent out of shape about my "missing" data. The hackers got their hands on the passport numbers of 860,000 passengers, and the ID card numbers of about 245,000 Hong Kongers. But they accessed only 403 expired credit cards and 27 current cards.
I don't know what the hackers might plan to do with my passport number. But it hasn't affected my travel yet, and there's been no suspicious activity on my card, either.
Still, the stock hit levels last seen in 2009 on the back of that hacking episode. It has since recovered that lost ground, and is worth tracking while the airline works its way out of the red and goes through a restructuring.
Cathay's shares halved between May 2015 and October 2016, and unlike the airline's passengers haven't gone anywhere since. Cathay miscalculated wildly on its hedging of fuel costs, locking in relatively high future rates for payments only to see crude prices crushed.
It is still leaking red ink in the wake of those disastrous valuation decisions. At a loss of US$0.04 per share for the last fiscal year, it's below the US$0.07 earned by China Eastern Airlines (CEA) , US$0.08 per share at Air China (AIRYY) , US$0.09 of China Southern (ZNH) - and way behind its most-direct competitor, Singapore Airlines (SINGY) , currently earning US$0.58 per share.
One area Cathay looks competitive is in its dividend yield. It's a healthy 3.1%, well above the 1.7% industry standard in transportation.
Cathay is forecast to earn US$0.03 per share for the year just ended in December 2018. At a forward 12-months price/earnings ratio of 10.2, Cathay is trading at a discount to the 14.9 P/E of the passenger-transportation services industry, as well as the 15.5 P/E ratio of industrials.
Both SQ and CX, as they're known to frequent flyers, are restructuring. Cathay has been shedding jobs in its largest destinations, and cutting benefits for pilots. Many of its oldest expat pilots are on hefty packages agreed before Hong Kong's handover back to China, and the airline has been replacing them with local Hong Kongers who don't get huge housing benefits and the like.
Cathay owns a regional airline, Cathay Dragon, formerly known as Dragonair, which flies mainly to China, Japan and Southeast Asia. Likewise, Singapore Airlines has a regional carrier called SilkAir. But unlike Singapore Airlines, which owns the budget carrier Scoot, Cathay doesn't have a cheap-tix subsidiary.
Faced with intense competition on air fares in Asia, particularly those Chinese competitors, it keeps getting asked the question as to whether it would launch a budget subsidiary. But with the Hong Kong airport basically full in terms of landing slots, it wouldn't be able to get that off the ground until a third runway opens in 2024.
Until then, its improvements will have to come operationally. In terms of image, it's clearly realizing it needs a change.
Cathay looks a lot better coming out of this fat-finger episode than the electronics retailer Fortress. Fortress, one of two dominant electronics and white-goods sellers in this city, wasn't quite as generous with a Christmas-sales glitch.
At 2 a.m. on Dec. 6, the Fortress Web site started selling a variety of mobile phones, tablets and cameras at HK$298 (US$38), including a Nikon camera that regularly retails at HK$23,000 (US$2,940).
Even in the middle of the night, many of the items had sold out by 4 a.m. The Web site stopped functioning altogether around 6 a.m.
Fortress made its first call to the bank, telling it not to honor any of the transactions. It then said it would give customers a refund. If they had completed the transaction, it said would issue a coupon for HK$300 - the price they thought they were paying for that bargain.
Fortress didn't exactly own the moment, and many Hong Kongers have since made fun of its lack of magnanimity.
Cathay, meanwhile, will have lost around US$11 million, assuming it sold 1,500 tickets at the cut rate. A day-time 30-second advertisement on CNN or BBC World costs around US$5,500.
Considering Cathay has been getting blanket coverage around the world on all the main news stations, it has bought itself around 1,500 advertising slots. A price clearly worth paying, with invaluable goodwill thrown in.
