Originally Posted by
Cathay Dragon 666
I heard for a luxury airline like Cathay, to maintain the quality they are offering, they have to sell an average of V-fare(!!!) to break even. Anything less than that is pure loss. Now I see Cathay is throwing around Q-fare and even if they fill up the plane with Q-fare they are losing tons of money.
It is a myth.
CX does not need to sell average V fares to break even.
CX can break even (without oil hedge of course) with revenue from F/J and cargo.
Let us consider this, the revenue for CX on I fare is 10 times of Q fare. And V fare? it is at best of 2 times of Q fare. While a Y, B or H fare is at least 8 times of Q fare and 4 times of V fare. So you flood the market with 50 Q fares (instead of 20), but sell more Y B and H fares. For the extra 30 Q fares, you just need to sell 7.5 Y B H fares (suppose these 30 extra Q seats was to be sold at V).
Many Y seats are sold at a loss. It does not matter how many Q fares CX sell as long as CX meet its financial target of revenue.