Originally Posted by
380Flyer
Read this!
Analysts, including Ms Corrine Png, chief executive officer of Singapore-based Crucial Perspective, and Mr Shukor Yusof, founder of Endau Analytics in Malaysia, have said that Cathay needs to take a leaf out of rival Singapore Airlines' book and start a budget carrier, or turn its affiliate Cathay Dragon into one to keep a grip on Hong Kong passengers.
"They still believe they have this unique market position," Mr Shukor said about Cathay. "They don't realise that the way things were done doesn't work anymore. Their reluctance to change is very disturbing."
This is when I really wonder if these analysts have any idea what they are talking about and how much they really understand the airline industry let alone the organisation that they are commenting on.
HKIA is slots constraint and why on earth would Cathay Pacific start a low cost carrier when they can manage low fare pricing within their existing offering. If these analysts attending the management briefing, they will understand that CX/KA are looking at different options to further tap into offering low fares through an expanded fanfares offering.
Conclusion: Corrine Png from Crucial Perspective and Shukor Yusof from Endau Analytics are just BAD ANALYSTS who don't understand the business.
Agreed.
Singapore are allowing unlimited LCC competition because:
1, Open Skies in ASEAN country
2, LCC stealing passengers in Singapore from nearby Malaysian airport with convenient and frequent bus between Singapore and Malaysia.
3, The exchange of allowing Jetstar to operate in Singapore for SQ to operate in Australian domestic routes.
The result is large flow of LCC is sabotage SQ's position as a leading airline in the region. Lots of regional routes could not be sustained. While Cathay Pacific is hanging on its ASEAN routes and expand in Europe, SQ is flat.
And 10 years on, LCC in Singapore is expanding yet lot of routes were cut, the room for expansion is limited. Besides few big tourist chunk routes, lots of LCC routes are underperformed. There is a real danger of the growth of LCC ASM exceeding travel public demand.
Hong Kong is so different from Singapore. From Hong Kong, its nearby airports are not LCC dominated like Singapore. Shenzhen and Guangzhou are dominated by legacy carriers and Hong Kong has more LCC carriers than both CAN and SZX. Transportation between airports in pearl delta area are expensive compare to Singapore. Mushrooming LCC in Hong Kong will only create a situation that sabotage the premier marketing position of both HKG airport and CX. I don't think people here want to see thousands of those red hat gannies going crazy in the boarding gate for missing their LCC flights to Vietnam daily...
Cathay Pacific in HKG is like a Michelin star restaurant in a Four Seasons hotel. It would be commercially suicide to turn a corner of this popular restaurant into a Café de Coral.