Originally Posted by
brunos
Many of us are quite idle those days, so playing the speculation game is a silly but enjoyable fun. Please allow me to brainstorm on a hot Sunday morning.
My own speculation watching the situation, especially in Europe.
Entry restrictions will take forever to be lifted. Number 1 priority in each country is to restart the local economy while trying to contain the virus. The priority is to let international trade and production flow, not tourism. French tourists will stay at home rather than going to Asia. They will partly occupy the French hotels that Chinese tourists were planning to use.
Not letting tourists go abroad and return to import the virus is a visible political act showing that the government is doing something, besides its potential benefit. It will be many months till international tourism and non-essential business gets a very modest restart. Probably years before it reaches 50% of its past glory.
CX group is badly affected as it has no domestic flights, like in China, America and possibly EU. Until China extensively reopens (no quarantine), not only to HK permanent residents but to foreign pax, CX group is doomed.
All this to say that CX group will have to reinvent itself as a much smaller airline for the coming two and maybe more years. This will probably mean both pay cuts and massive layoffs, as already considered in Europe. All airlines have plans A, B, C, D,... depending on the severity of covid. As Lufhtansa's CEO Spohr stated as the AGM, LH will be a smaller airline when demand recovers in 2023. So will CX and they must be considering many options on how to consolidate their three brands.
BTW: Agreeing to spend HKD5 billion (cash and notes) in March 2019 before the big protests and covid, appears with hindsight as a big mistake.
Yeah, speculation is half of FT's core, so go ahead.
And, yep, you look at it from Hong Kong perspective. I look at this from EU side
The moment Hong Kong would lift the transit ban (HKG is a big transit airport), there do come a lot more CX flight options available, even with a lot of countries still in lock-down mode. Although those lock-downs are presented as "absolute", you can see a lot of potential travel is still possible, often needing a visa from the abroad Embassy, IE, a business visa.
Combine that with the passenger aircraft freight flights and CX starts to get a lot more options to plan flights (because of the transit ban, the planning of passenger flights is simply quite impossible at the moment).
Where everybody is speculating about "smaller" airlines, I don't think that much of reductions in more than 2 years. People did, the past years, "taste" of the freedom of flying, and they want more, whenever possible. Where the 2001 no-more-flying was based on the direct terrorism fear, the COVID-19 fear will be over, the moment something like a halfway adequate medicine is found. And before that, it's a very, very small risk with a slim chance of a lethal result (though it's a risk that spreads itself exponentially, though Johnny the alcoholic holiday flyer does not realize/understand that -or is simply not interested in that).
Having staff accept 30% lower wages, just to "integrate" an airline with its subsidiaries, is a nice thought, though not that realistic.
Pilots accepting a 45% pay cut to avoid layoffs is a completely different league, maybe even the opposite: The airline structure will not change.