This, I believe, is their greatest challenge, though short of Ch. 11 I don't know if there is a strategic solution per se.

And I agree with your earlier posts that concerns over the network being overblown. Build, borrow or buy is a classic strategy decision and I don't necessarily think they've made a bad one. If they wanted to compete with DL and UA on Asia they'd have to compete on price, while CX doesn't have to; it can blow them all away on product. So rather than run a race to the bottom (since long haul aircraft are not an unlimited resource) they simply take a chunk of Cathay's revenue on codeshares and concentrate their own resources on markets where they can dominate on network, like Latin America.

And then of course there is London, where between AA and BA there's just no legitimate competition from domestic airlines.

I think the greatest strategic threat is not concentrating enough on non-Latin emerging markets. Should a bubble there ever burst they are going to be in trouble with a sudden drop in business so perhaps other emerging Asian or even African markets would be worth exploring.