Cathay Pacific Asia Miles - Cathay Pacific wins UK-US Route and Virgin Atlantic granted HK-Aust Route

According to Bloomberg News, Cathay Pacific has won rights to fly from London Heathrow to New York and Virgin Atlantic has obtained rights to fly Hong Kong to Australia.

Good news for both airlines concerned. Now, CX will be able to offer a round-the-world product.

http://biz.yahoo.com/djus/031127/0409000485_1.html

So did CX give up some of its rights to SYD for VS in return for LHR-JFK?

From Reuters:

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=3900546

UPDATE 1-Cathay wins coveted London-NY rights -Virgin exec
Thu November 27, 2003 04:41 AM ET

By Katie Hunt
HONG KONG, Nov 27 (Reuters) - Hong Kong's Cathay Pacific Airways Ltd (0293.HK: Quote, Profile, Research) has won coveted rights to fly between London and New York on the key trans-Atlantic route, a Virgin Atlantic executive said on Thursday.

In return, Richard Branson's UK-based Virgin [VA.UL] has gained permission to fly daily from Hong Kong to Sydney, where it can hook up with its low-cost carrier Virgin Blue, Chris Humphrey, Virgin's manager for government and external affairs, told Reuters in Hong Kong.

"Strategically, it's very important for us. We plan to step up our services and fly double-daily to Hong Kong (from London) now that we can connect to Sydney," Humphrey said.

"It's still subject to European Union approval but we think that's just a rubber stamp procedure," he added.

Cathay had gained rights for a daily round trip service between London and New York, Humphrey said. The U.S.-U.K. market is dominated by British Airways (BAY.L: Quote, Profile, Research) , Virgin, AMR Corp's (AMR.N: Quote, Profile, Research) American Airlines and UAL Corp's (UAL.N: Quote, Profile, Research) United Airlines.

Cathay confirmed that a deal negotiated between Hong Kong and UK government officials, who met in the territory this week, had been reached but declined to give any details saying it was provisional.

Virgin, which said it hopes to start flying to Sydney in the summer, will compete with Cathay and Qantas Airways Ltd (QAN.AX: Quote, Profile, Research) on the Hong Kong to Sydney route.

Humphrey added that British Airways did not secure the right to fly cargo from Hong Kong to Japan, which it had been looking for.

The move is also likely to raise the hackles of Cathay's main Asian rival Singapore Airlines (SIAL.SI: Quote, Profile, Research) and smaller UK carrier British Midland Airways Ltd [BMID.UL], which have both sought trans-Atlantic rights through London for years.

Cathay has said landing rights at London's busy Heathrow airport could be hard to secure.

I assume LHR to JFK CX flights will be codeshare flights with American.

Wonderful News!

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Bretteee:
I assume LHR to JFK CX flights will be codeshare flights with American.</font>

Why? BA's LHR to JFK aren't, nor, for example do CX and BA code share on LHR-HKG.

http://www.flyertalk.com/forum/thumbsup.gif http://www.flyertalk.com/forum/thumbsup.gif http://www.flyertalk.com/forum/thumbsup.gif

YES!!!!!!!!!!! Way to go CX!

If I'm correct, this makes CX the only OW partner you can fly around the world without having to change airlines. http://www.flyertalk.com/forum/biggrin.gif
Not too many other airlines can say that ... hope it all works out.

Does anyone know when this service will start? Thanks

The route structure doesn't make sense to me. What if a person only flying between LHR to JFK, then he or she has to fly a big circle via HK and JFK in order to get back to LHR?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by David Kung:
The route structure doesn't make sense to me. What if a person only flying between LHR to JFK, then he or she has to fly a big circle via HK and JFK in order to get back to LHR?</font>

Err, I am assuming that CX will fly LHR - JFK and JFK - LHR! http://www.flyertalk.com/forum/wink.gif

I think it's interesting news, but I am still not sure what's in it for CX. They have (and will continue to have) little or no brand recognition for transatlantic flights and LHR - JFK has 6 airlines already flying it - BA, VS, AA, UA, AI and KU.

The route authority is subject to E.U. approval. I would not be surprised if the U.K. government agreed to it knowing the E.U. would not approve it.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Bretteee:
I assume LHR to JFK CX flights will be codeshare flights with American.</font>It's possible, unlike BA/AA code-share on transatlantic which isn't possible due to anti-monopoly concerns.

One thing I don't understand: Given that a third country (the U.S.) is implicitly involved in this, how come this deal isn't subject to U.S. review? Suddenly a third country is offering service between the U.S. and a second country--doesn't the U.S. get a say?

I don't blame BMI for being peeved about this; I bet DL, CO, etc., are just as angered that they didn't get a crack at that route, too.

Separately, it seems from one line in the Reuters article that CX is concerned that its slot at LHR won't be all that desirable.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by 1K-SFO:
It's possible, unlike BA/AA code-share on transatlantic which isn't possible due to anti-monopoly concerns.
</font>

Actually, it's only LHR-U.S. that is raising the anti-competitive concerns. That's why rest of U.K.-U.S. codesharing has been approved between the two (but not yet exercised).

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">One thing I don't understand: Given that a third country (the U.S.) is implicitly involved in this, how come this deal isn't subject to U.S. review?
</font>

This may already be permitted under the U.S.-H.K. air services treaty (which would be reciprocal as PA then UA has long had beyond HKG rights). If not, CX will have to negotiate with the U.S.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Swanhunter:
Err, I am assuming that CX will fly LHR - JFK and JFK - LHR! http://www.flyertalk.com/forum/wink.gif

I think it's interesting news, but I am still not sure what's in it for CX. They have (and will continue to have) little or no brand recognition for transatlantic flights and LHR - JFK has 6 airlines already flying it - BA, VS, AA, UA, AI and KU.</font>

I don't think CX needs brand recognition specific to transatlantic flights. CX has excellent brand recognition period. It's a well-managed airline with an exceptional reputation for service on the ground and in the air.

JFK-LHR-JFK is a lucrative route and CX would be my carrier of choice followed by BA. In my opinion, CX First is superior to BA First; and yes, I'd rather be in CX NBC than BA Club.

CX is competitive and for the JFK-LHR-JFK route they will certainly force BA & VS to step up to the plate to compete for premium cabin passengers. If CX builds a lounge at LHR comparable to The Wing or The Pier, then CX fans will be quite happy.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Mr. Strong:
CX is competitive and for the JFK-LHR-JFK route they will certainly force BA & VS to step up to the plate to compete for premium cabin passengers. If CX builds a lounge at LHR comparable to The Wing or The Pier, then CX fans will be quite happy.</font>

I take your point, but I don't think the impact will be that great. Yes CX, have a strong brand for flights to Asia and Australasia. Yes, CX First is better than BA though is a close run thing in NBC with the wedgie seats. But I think it will take a lot of time and effort to build that for transatlantic routes. BA offer 6 flights a day to JFK, plus another to EWR. CX will offer 1 - maybe 2?

That said, more competition is never a bad thing. And a CX lounge at LHR T3 would be most welcome indeed. http://www.flyertalk.com/forum/smile.gif

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">

That said, more competition is never a bad thing. And a CX lounge at LHR T3 would be most welcome indeed. http://www.flyertalk.com/forum/smile.gif[/B]</font>

i would love that http://www.flyertalk.com/forum/smile.gif a lhr wing/pier would sure beat the ac and fl!!!!!

Well, now YVR will have to better their stopover. I'll just fly HKG-LHR-JFK instead.

I know this will fall under the "hard to believe" catagories. I know some fairly well off folks down here in Florida, that are not FFers, yet when they do travel, they pay for J or F. Since most of their travel is to Europe, they do talk about BA, AA, UA, LX, etc...etc... When they came over for for a little party few weeks ago, the conversation turned to my upcoming Africa Safari/China/HKG trip. I mentioned the fact that I will be flying F on CX for all of the long haul and BA(codeshare) J for the inter-Africa part. They recognized and started to praise the BA J product, (although I did explain, that this one is not exactly what they think), but they had no idea who/what CX is and even less aware of one of the best F products out there. So I agree with some others here. CX will have to sell itself to many, and can't assume that the flying world, especially, the US to/from UK/Europe crowd will automatically recognize their product.

[This message has been edited by andrzej (edited Nov 27, 2003).]

Interesting that Cathay Pacific may eventually fly over the Atlantic and Virgin Atlantic may fly to the Southwest Pacific!

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Cygnus X-1:
Well, now YVR will have to better their stopover. I'll just fly HKG-LHR-JFK instead.</font>

Why would you? YVR-JFK is definitely shorter than LHR-JFK. HKG to either of London or Vancouver is pretty much same distance too.

Unless you are really worried about Jet-lag, in which case West Bound flight is better than East-Bound

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Cygnus X-1:
Well, now YVR will have to better their stopover. I'll just fly HKG-LHR-JFK instead.</font>

And even though its the same plane... CX's fare to NY from HKG via the Atlantic ie London will be much higher than the other way round. Transatlantic flights are generally more expensive than Transpacific flights.

my 2p: i think it's all about AA/BA. allowing CX will alleviate monopoly concerns and probably pave the way for codeshare etc. between AA/BA. never forget that CX is small and entirely under BA's wing. long live the empire.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by terenz:
Actually, it's only LHR-U.S. that is raising the anti-competitive concerns. That's why rest of U.K.-U.S. codesharing has been approved between the two (but not yet exercised).</font>

actually, AA/BA codeshare on certain routes on AA flights from BA North American gateways to various other North American cities and on BA flights beyond LHR have begun impletation last month. AA/BA can codeshare on any trans-atlantic services except those in/out of LHR.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by 1K-SFO:
One thing I don't understand: Given that a third country (the U.S.) is implicitly involved in this, how come this deal isn't subject to U.S. review? Suddenly a third country is offering service between the U.S. and a second country--doesn't the U.S. get a say?

I don't blame BMI for being peeved about this; I bet DL, CO, etc., are just as angered that they didn't get a crack at that route, too.

Separately, it seems from one line in the Reuters article that CX is concerned that its slot at LHR won't be all that desirable.</font>

i think i've read somewhere before that from previous HK/US aviation agreements, HK airlines have rights to the US via the Atlantic. nobody would think that CX would be able to secure rights from the UK for LHR-JFK flights. CX has other 5th freedom rights that's not excercised. for example, i've read from news articles during the HK/US aviation negotiations late last year that CX has 5th freedom rights out of ICN to serve the US but they don't use them.


[This message has been edited by jakob (edited Nov 27, 2003).]

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by mhtaipei:
my 2p: i think it's all about AA/BA. allowing CX will alleviate monopoly concerns and probably pave the way for codeshare etc. between AA/BA. never forget that CX is small and entirely under BA's wing. long live the empire. </font>

What most people forget is that even if CX decides to codeshare with AA over the transatlantic instead of using their own metal, CX still must have traffic rights to pick up passengers between London and NY in the first place. It's not just placing the flight number on another's aircraft. So in true essence, CX might and could just very well codeshare with AA as CX will not be able to compete with the competition , say VS and UA especially if it has only 1 flight a day.

CX has the traffic rights for LHR-USA; they were granted in the last US-HK bilateral. The REAL question is whether CX will discontinue one of its highly lucrative LHR-HKG flights in order to free up a slot for the JFK-LHR service.

------------------
Has YOUR airline won an award lately?

Establishing LHR-JFK route has been a long-term strategic plan for CX. They first got rights from the US side as a part of giving US carriers better access to HKG. Now they have convinced UK authorities that they can give valuable rights (HKG-SYD) in return.

The whole idea for CX doing this is to establish their reputation as a truly global airline. Compared to the fleet size of American (1000) or UA, CX is a very small airline with a limited footprint. They are however quite profitable (when SARS does not cause a calamity) and have an excellent brand in the markets that they serve.

Part of the value is the strategic linkage of financials centers of the world (HKG, LHR, NYC). It is easier to establish a brand in niche verticals. They already have operations in all 3 cities, and now it is simply a question of expanding those. I don't think their OW partners would give them a lot of grief (as the press has reported, the main challenge was from BMI which still cannot fly LHR-JFK).

The other aspect to remember in all this is that CX has a robust cargo operation. While that may not be central to the LHR-NYC route, it should not be ignored.

With UA discontinuing its RTW routing (on its own metal), CX can lay claim to that glory.

In addition, press has reported that CX is actively looking to expand its capacity using equipment that could be acquired at a good value in the current market. It is quite possible that by the time this route is launched they will have the needed capacity and do not have to cannibalize any existing route as some earlier posters have suggested.

From HKG authorities point of view, this liberalization goes beyond CX - this helps HKG reassert itself as a trading and travel hub. (Think of all the growing competition from other Asian airports).

On a side note, as other poster have said, CX has several other 5th freedom rights that they do and sometime do not yet use. For example they fly HKG-BKK-BOM-DXB and DXB-BOM-BKK-HKG and pickup passengers on some segments that are not end point to end point.

Well it is really good news for CX, I really look forward flying CX on an OW RTW ticket...

I assume that CX may have its own RTW flight soon --HKG - YVR - JFK - LHR - HKG

That will be nice, but I doubt if CX will keep the YVR-JFK flight.

Some competitions on the HKG-SYD flights are sure to be appreciated, especially CX and QF (both oneworld) dominate this route and the fare tends to be higher especially during peak times. But I really miss Ansett -- really good service...

Carfield