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Author | Zhou Zhiyu
Editor | Zhang Xiaoling
The aviation industry is launching an &#34;all-out war.&#34;
On August 15, when Cathay Pacific Group CEO Ronald Lam walked into the Cathay Pacific Lounge at Beijing Capital International Airport again, he admitted that he could hardly recognize what it used to look like. This lounge, which once welcomed countless business and political elites, has been completely reshaped after more than a year of refinement.
As the &#34;behind-the-scenes manager&#34; of the project, Cathay Pacific's passenger director Peng Yu feels deeply about this: &#34;As a Beijinger, I feel very proud to have such a special flagship lounge right in my backyard.&#34;
She explained that the team's goal is to combine a consistent global design concept with local culture and innovative ideas, and the &#34;Tea House,&#34; which has stepped out of Hong Kong for the first time, is a typical example. &#34;We hope to use the Beijing flagship lounge as a window to bring excellent traditional Chinese culture to the world.&#34;
This 843-square-meter lounge, which has undergone more than a year of refinement, is a microcosm of Cathay Pacific's massive investment plan of over HKD 100 billion.
Behind this is a core question that Cathay is trying to answer: In an era where aircraft, routes, and schedules are increasingly similar, where exactly is the competitive moat of a top airline?
From ten thousand meters in the air to the precious ground, facing the increasingly fierce competition in the aviation industry, Cathay Pacific is providing its own solution.
The design of top airport lounges has long transcended mere functional stacking. This time, Cathay invited the London studio Studioilse, which previously led the design of Hong Kong's &#34;Yuheng Hall,&#34; to continue its &#34;human-centered&#34; philosophy.
However, the true uniqueness of this &#34;home&#34; in Beijing lies in its profound understanding of localization and commercial calculation.
Beijing is an irreplaceable strategic location for Cathay. The data is the best proof: Cathay operates up to 56 flights weekly between the two major international airports in Beijing and Hong Kong, with Cathay Pacific itself operating 7 pairs of flights daily on the capital airport route. Behind such a high frequency of flights is a large and stable flow of high-end passengers.
Providing precise services for this high-value passenger flow is key to investment returns. From a bowl of authentic old Beijing fried sauce noodles in the &#34;Flavor House&#34; to the &#34;Tea House,&#34; which aims to export Eastern lifestyle aesthetics and has stepped out of Hong Kong for the first time, Cathay tells a complete story of &#34;rooted in Hong Kong, backed by the motherland, and connected to the world&#34; in this &#34;home&#34; in Beijing. Currently, Cathay has 23 destinations in mainland China, operating over 300 pairs of flights weekly, and the coverage of this story is continuously expanding.
Cathay's investment logic is based on the judgment of a global trend: travelers are willing to pay a premium for experiences.
This trend is not a subjective feeling but real feedback that Cathay has received from the market frontline. Cathay's Customer and Business President, Liu Kaishi, pointed out in an interview that a significant shift in the post-pandemic era is that many travelers hope to have a better travel experience. &#34;Passengers who used to mainly fly economy class may now spend a little more to purchase our premium economy seats, and those who previously flew premium economy may upgrade to business class.&#34;
Travelers are voting with their hard-earned money, choosing higher quality services. This is the confidence behind Cathay Pacific's HKD 100 billion investment plan.
In addition to focusing on hardware and services, Cathay Pacific's Mainland China Director, Zheng Jiajun, added a deeper layer of strategy: &#34;We will continue to work hard to recruit talent in the mainland... Currently, we have about 3,000 employees from the mainland, and our goal is to reach 4,000 by the end of the year.&#34; From frontline cabin crew to backend IT teams, Cathay is significantly increasing its investment in the mainland.
Whether it's the Thai-style chairs designed for solo travelers in the Cathay Pacific lounge in Beijing or the lounge concierge ambassadors, every detail points to one goal: to capture and lock in this group of high-net-worth, highly loyal travelers who are willing to pay for experience.
Globally, the competition surrounding traveler experience has already extended from the skies to the ground. As the hardware configurations of first class and business class become increasingly similar, &#34;ground experience&#34; is rapidly becoming the second battlefield for premium airlines, marking the start of a war that combines capital and service on a global scale.
In this war, Cathay is not the only player making significant investments; its competitors, both regionally and internationally, are also heavily investing. Singapore Airlines announced a major investment of SGD 45 million in April 2025, planning a comprehensive renovation of its SilverKris and KrisFlyerGold lounges at Changi Airport's T2 terminal over the next two years, which will increase the total area and seating capacity of the lounges by 50%; Qatar Airways announced on August 18 that it will open its first exclusive lounge in the U.S. at New York's JFK Airport in the new Terminal 1. This lounge, covering 15,000 square feet, is scheduled to open in 2026, marking its intention to compete for the highest value customers not only in the air but also in the core markets of its competitors with top-notch ground services.
From London to Singapore to New York, the actions of the world's top airlines in the past two years have been highly consistent: viewing ground lounges as a core showcase of brand value and a key battlefield for consolidating high-end customer loyalty.
The relentless pressure from competitors makes Cathay's investment even more necessary and urgent. CEO Lin Shaobo candidly stated in an interview that becoming the world's best premium airline is not easy, as there are many excellent airlines in the industry, and it is essential to excel in the details of products and services.
The desired effect is multi-layered: to strengthen brand recognition, enhance customer loyalty, and ultimately drive high revenue growth by attracting travelers to choose higher cabin classes through excellent ground services, thereby improving overall profitability.
Currently, the market logic has been rewritten, with fierce market competition replacing the broad-based dividends of the recovery period. Cathay Pacific's mid-2025 financial report is the most direct reflection of the brutality of this &#34;mid-battle,&#34; and although Cathay Pacific remains &#34;Asia's most profitable airline,&#34; pressure is evident. At the same time, the demand and yield for premium cabin classes continue to be the core engine driving performance growth. This achievement proves that the strategy focused on &#34;experience premium&#34; is entirely correct.
Therefore, the renovation of the Beijing lounge and the entire HKD 100 billion investment plan are no longer merely &#34;adding icing on the cake,&#34; but a strategic necessity to consolidate and expand the current profit momentum. In the face of fierce competition from global peers, only by continuously investing in these areas that can create differentiation and enhance customer loyalty can the current performance advantage be transformed into a long-term, hard-to-imitate moat
When the feast of high ticket prices comes to an end, the one that wins the future will not be the airline that bleeds the most in the price war, but the one that can successfully convert massive capital into perceivable value first, and ultimately persuade the market to pay a premium for its services.
This is not only the question that Cathay Pacific is answering, but also the core logic for determining who can ultimately prevail in this global aviation industry's &#34;new throne qualification competition.&#34;

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The flames of war have spread from the sky to the VIP room

- Cathay Pacific is undergoing a significant transformation, exemplified by the complete redesign of its Beijing lounge, reflecting a broader investment strategy exceeding HKD 100 billion.  
- The airline aims to enhance customer experience by integrating local culture and high-quality service, responding to a global trend where travelers are willing to pay more for better experiences.  
- As competition intensifies, Cathay's focus on premium ground services is crucial for maintaining customer loyalty and profitability, positioning itself strategically in the evolving aviation landscape.

Asia's Most Profitable Airline Battles in New Arena