Focusing solely on market shares is not commercially sound (EK will probably disregard this); however, maintaining certain market shares is crucial for driving yields. One cannot charge a premium while having a low share in a market, even with superior products (QR is a good example). The scale is not there.

CX is a network carrier; if it does not have some healthy, steady growth, it will affect not only direct traffic ex/to HKG but also other markets which, in turn, will have pressure on its network (i.e. cannot support multiple frequencies).

http://www.scmp.com/business/compani...china-slowdown

China slowdown??

when local carriers are growing at a healthy rate!

more like a Dragonair failure to attract customers

Get a grip! What you're proposing is a road to ruin for CX, which is probably why they haven't done it. Chinese carriers are heavily subsidized, so if they're expanding while economic growth is slowing, it could just mean they're throwing a lot of good money after bad. Really think it's smart for CX to follow suit? Same thing with the market share issue, where they could start a lot of marginal routes and boost capacity with 747s if they wanted to, but at the cost of a lot of profitability.

Dragon Air can't attract too many new customers when they don't do intra-China routes. There can be just so many people going in and out of China, plus China doesn't always give CX/KA slots to share into the rapid market growth.

except number of Chinese moving in and out is increasing rapidly!!

China does not give slots- CX is 30% owned by the Chinese govt

No. Incorrect. Intl pax thruput in China is the slowest growing air segment. Go check out BCIA's #s. Look at intl/Macau/HK arrivals/departures. They are the component of traffic growing the absolute slowest. low single digits. It is not CX/KA's fault there has been a slowdown in traffic to/from HKIA and the mainland. Have you flown on KA lately? At least my last 2 flights to PEK were ~20% full. If you are John Slossar, are you going to cram even more capacity onto routes where planes are experiencing slower-than-expected growth? To what end?

CX/KA cannot fly domestically. That's just a fact unfortunately and will not change any time soon.

The numbers that are increasing are domestic China flights, although how you define "healthy" is subjective. Domestic factors...rpks, pax thruput at airports, etc are increasing anywhere from 3 to 9% year over year. What adjective you want to describe that is up to you. You say healthy. Most folks I've talked to use "below expectations" of a year ago.

as for a China slowdown, this is an indisputable fact. Google "China GDP growth slowdown" or something similar