CX 77W to Australia (confirmed)
Jul 25, 2014, 3:23 am
#16
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I think a more likely explanation is that SQ has been decimated by EK, and SQ is doing whatever it can to compete...even if the yields themselves don't justify it. EK offers a high end premium product to Australia and connects to far more cities in Europe...so SQ better at least give what it can. Before the days of the Middle Eastern carriers, SQ's bread and butter was premium connecting traffic Europe to Australia. EK is just crushing them with the bazillion A380s EK flies around, all with F class. SQ cannot give up this fight, even though I can't imagine the yields are great. The real beneficiaries are Australian passengers who probably are getting far more premium service at cheaper prices than what long-term market dynamics call for. Definitely not bad at all for the customers! CX doesn't quite face this predicament, and hence serves Australia with yield in mind. I recall years ago SYD F yields being dreadful.
SQ executives are frank about needing to go head to head against EK even short-term profitability of a route be damned.
SQ executives are frank about needing to go head to head against EK even short-term profitability of a route be damned.
EK high end premium product? Maybe based on price it is good value for money, but it is not for everyone. Personally I wouldn't consider EK if SQ was going where i wanted.
Jul 25, 2014, 3:51 am
#17
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Yea, I guess the comparison matters. I'm tying in the context of CX's 77H frames that are overwhelmingly sent to North America (LAX 4x daily, JFK 5x daily, SFO 1x daily, ORD 1x daily). Presumably they'd have to steal 77H frames from somewhere to send them to Australia, and I think that sounds kinda crazy. Especially as the guy posted above, 77H/G frames also have a lot of PEY capacity. I think the yields are good on Australian routes precisely because the 33G is used....I suspect CX thinks they'd fall off a cliff if 77H/77G was introduced. I don't know if they could fill the excess PEY, J and F capacity. And if 77G was used, I don't know squat about Y yields but someone above was saying Y yields to Australia are already under pressure and 77G would dump a lot of extra Y capacity.
Comparing ex-HKG Australian fares against US premium fares in general makes Aussie fares look cheap! Others can fill in the blanks, but when I'm looking at Aussie J fares ex-HKG generally the cheapo fares are 4-5k USD and full fares are ~7k USD. And whenever I'm hunting for Australia fares, the cheap (I think it's D class) is almost always available. By comparison, a "cheap" ticket to JFK is generally 7-9k USD. And full-fare is 11k+. I honestly have no idea who gets the cheapo JFK biz seats ex-HKG because I rarely see them available for sale ex-HKG, unlike when I'm hunting for SYD tix it seems like every date is open at the "save" rate a few weeks out. Now be honest, spending 4-5k USD on a J ticket to Australia isn't exactly "saving" but it's a lot better on the wallet than US business trips. If you want cheapo biz to JFK you do it the same way you would SYD - start at a cheap outport. And the 77H also has F class - which could set you back 15-20k USD and CX has genuine cash demand for those fares to North America. CX shut down F on the SYD route precisely for lack of demand where yields made sense.
So I think the issue is what happens to Aussie yields if a much larger aircraft is introduced. I'm pretty sure yields fall, and meanwhile some other destinations have to give up a 77H/G frame.
Correct me if this is wrong (haven't flown the route before), but it appears that a First class fare on EK from SYD to LHR is just slightly more than a J class fare on CX from HKG-JFK (12-13k AUD). Although these fares are all expensive to begin with, 12-13k all-in for four long haul F segments isn't bad! By comparison, you'd pay 15-20k USD for CX HKG-JFK. I don't know precisely the A380 operating economics to Australia, but I heard a SQ executive grumbling about the need to stay head to head in the fight against EK, no matter if yields sucked. The conversation was specifically about flights to/from Australia. Colorful language was used, but the point was economics in the near-term do not totally determine what aircraft serves Australia and my interpretation was that SQ would lose money on the route if needed to compete with EK, although I don't know the #s exactly. And this was ~18 months ago so maybe yields have changed.
Jul 25, 2014, 4:13 pm
#18
Join Date: Dec 2008
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Interesting discussion.
Yea, I guess the comparison matters. I'm tying in the context of CX's 77H frames that are overwhelmingly sent to North America (LAX 4x daily, JFK 5x daily, SFO 1x daily, ORD 1x daily). Presumably they'd have to steal 77H frames from somewhere to send them to Australia, and I think that sounds kinda crazy. Especially as the guy posted above, 77H/G frames also have a lot of PEY capacity. I think the yields are good on Australian routes precisely because the 33G is used....I suspect CX thinks they'd fall off a cliff if 77H/77G was introduced. I don't know if they could fill the excess PEY, J and F capacity. And if 77G was used, I don't know squat about Y yields but someone above was saying Y yields to Australia are already under pressure and 77G would dump a lot of extra Y capacity.
Comparing ex-HKG Australian fares against US premium fares in general makes Aussie fares look cheap! Others can fill in the blanks, but when I'm looking at Aussie J fares ex-HKG generally the cheapo fares are 4-5k USD and full fares are ~7k USD. And whenever I'm hunting for Australia fares, the cheap (I think it's D class) is almost always available. By comparison, a "cheap" ticket to JFK is generally 7-9k USD. And full-fare is 11k+. I honestly have no idea who gets the cheapo JFK biz seats ex-HKG because I rarely see them available for sale ex-HKG, unlike when I'm hunting for SYD tix it seems like every date is open at the "save" rate a few weeks out. Now be honest, spending 4-5k USD on a J ticket to Australia isn't exactly "saving" but it's a lot better on the wallet than US business trips. If you want cheapo biz to JFK you do it the same way you would SYD - start at a cheap outport. And the 77H also has F class - which could set you back 15-20k USD and CX has genuine cash demand for those fares to North America. CX shut down F on the SYD route precisely for lack of demand where yields made sense.
So I think the issue is what happens to Aussie yields if a much larger aircraft is introduced. I'm pretty sure yields fall, and meanwhile some other destinations have to give up a 77H/G frame.
Yea, I guess the comparison matters. I'm tying in the context of CX's 77H frames that are overwhelmingly sent to North America (LAX 4x daily, JFK 5x daily, SFO 1x daily, ORD 1x daily). Presumably they'd have to steal 77H frames from somewhere to send them to Australia, and I think that sounds kinda crazy. Especially as the guy posted above, 77H/G frames also have a lot of PEY capacity. I think the yields are good on Australian routes precisely because the 33G is used....I suspect CX thinks they'd fall off a cliff if 77H/77G was introduced. I don't know if they could fill the excess PEY, J and F capacity. And if 77G was used, I don't know squat about Y yields but someone above was saying Y yields to Australia are already under pressure and 77G would dump a lot of extra Y capacity.
Comparing ex-HKG Australian fares against US premium fares in general makes Aussie fares look cheap! Others can fill in the blanks, but when I'm looking at Aussie J fares ex-HKG generally the cheapo fares are 4-5k USD and full fares are ~7k USD. And whenever I'm hunting for Australia fares, the cheap (I think it's D class) is almost always available. By comparison, a "cheap" ticket to JFK is generally 7-9k USD. And full-fare is 11k+. I honestly have no idea who gets the cheapo JFK biz seats ex-HKG because I rarely see them available for sale ex-HKG, unlike when I'm hunting for SYD tix it seems like every date is open at the "save" rate a few weeks out. Now be honest, spending 4-5k USD on a J ticket to Australia isn't exactly "saving" but it's a lot better on the wallet than US business trips. If you want cheapo biz to JFK you do it the same way you would SYD - start at a cheap outport. And the 77H also has F class - which could set you back 15-20k USD and CX has genuine cash demand for those fares to North America. CX shut down F on the SYD route precisely for lack of demand where yields made sense.
So I think the issue is what happens to Aussie yields if a much larger aircraft is introduced. I'm pretty sure yields fall, and meanwhile some other destinations have to give up a 77H/G frame.
You are right in that J yields will fall if they send a 77H and the already pressured Y yields will be trashed if they send a 77G.
VS's exit from SYD-HKG hasn't helped yields hugely. It may improve when QF downgauges to 744's for daily.
Jul 25, 2014, 6:31 pm
#19
Join Date: Jul 2014
Posts: 27
CX do charge a premium for flights out of HKG given their monopoly in that market.
If you have been keeping an eye on J fares from SYD to Europe, you would have noticed that CX always price themselves at/slightly below where QF is.
Normally if you compare the SYD-LHR return to just the HKG-LHR leg on the same dates, you will find that the fare difference is tiny (<$1k).
In fact I just did a quick look for 26 Jul - 2 Aug return on CX:
SYD - LHR - SYD J (A$7800)
HKG - LHR - HKG J (HK 63,500 = A$8900)
If you have been keeping an eye on J fares from SYD to Europe, you would have noticed that CX always price themselves at/slightly below where QF is.
Normally if you compare the SYD-LHR return to just the HKG-LHR leg on the same dates, you will find that the fare difference is tiny (<$1k).
In fact I just did a quick look for 26 Jul - 2 Aug return on CX:
SYD - LHR - SYD J (A$7800)
HKG - LHR - HKG J (HK 63,500 = A$8900)
Jul 25, 2014, 8:21 pm
#20
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CX is triple daily ex major AU cities. Having one of those with F capacity, to connect onwards to Europe would seems a good idea. but as you say, you'd need to take a frame from somewhere else to do that.
That being said, CX used to fly F on many routes to Au but discontinued it. I suppose they have done the math.
That being said, CX used to fly F on many routes to Au but discontinued it. I suppose they have done the math.
Jul 25, 2014, 9:50 pm
#21
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CX is triple daily ex major AU cities. Having one of those with F capacity, to connect onwards to Europe would seems a good idea. but as you say, you'd need to take a frame from somewhere else to do that.
That being said, CX used to fly F on many routes to Au but discontinued it. I suppose they have done the math.
That being said, CX used to fly F on many routes to Au but discontinued it. I suppose they have done the math.
With HKG-LHR J fares being like that, you can see why CX are loathe to take out a 77W and fly it to SYD when they can run a 5x daily operation to LHR at outrageous yields.
There is too much competition ex Australia to Europe to send anything other than the most efficient aircraft which is the 333.
I suspect if SQ had configured 333s with their longhaul J, they'd send it to Australia.
Jul 26, 2014, 1:12 am
#22
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F yields for Australia-HKG-Europe flights would be worse since there is probably very little O&D F traffic with J products being so very good these days.
With HKG-LHR J fares being like that, you can see why CX are loathe to take out a 77W and fly it to SYD when they can run a 5x daily operation to LHR at outrageous yields.
There is too much competition ex Australia to Europe to send anything other than the most efficient aircraft which is the 333.
I suspect if SQ had configured 333s with their longhaul J, they'd send it to Australia.
With HKG-LHR J fares being like that, you can see why CX are loathe to take out a 77W and fly it to SYD when they can run a 5x daily operation to LHR at outrageous yields.
There is too much competition ex Australia to Europe to send anything other than the most efficient aircraft which is the 333.
I suspect if SQ had configured 333s with their longhaul J, they'd send it to Australia.
SQ fly 330s on some services, but maintain F on others, including a380s. question is if they would remove F entirely if the a330s had full flat J seating.
Jul 26, 2014, 3:03 am
#23
Join Date: Dec 2008
Posts: 70
What about flying in the Europe/USA to OZ direction. how many people would they pick up in F out of ports such as LHR who want to fly all the way down to SYD in F?
I would suggest one service to SYD could easily handle F class again, and possibly one to Melb.
I would suggest one service to SYD could easily handle F class again, and possibly one to Melb.
Jul 26, 2014, 7:11 am
#24
Join Date: Jul 2014
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CX is commanding a much higher yield in F for HKG - LHR/NYC routes, much more than what they would ever get from Aus - Europe/NYC.
They are charging close to HK$100,000 (A$13,700) for F HKG-LHR-HKG and it can go up to HK$156,000 (A$21,000) for higher F fare bracket - just do a quick search on CX website for 28 July - 2 Aug and you will see what I mean.
In comparison QF F flex fare from SYD-LHR return is only A$15,100 for the same dates.
Unless CX has spare F equipment, it is hard to see how they can justify taking the F products out of their premium routes given the superior yield.
They are charging close to HK$100,000 (A$13,700) for F HKG-LHR-HKG and it can go up to HK$156,000 (A$21,000) for higher F fare bracket - just do a quick search on CX website for 28 July - 2 Aug and you will see what I mean.
In comparison QF F flex fare from SYD-LHR return is only A$15,100 for the same dates.
Unless CX has spare F equipment, it is hard to see how they can justify taking the F products out of their premium routes given the superior yield.
Jul 26, 2014, 10:41 pm
#25
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Another way to think about it is sectors.
*ex-Australia to London/USA via Hong Kong on CX is a 4 sector journey. F fares ex-Australia to London on EK are in the 12-13k AUD range for 4 long-haul sectors. CX will need to price around here to be competitive.
*ex-Hong Kong to London/USA is a 2 sector journey on CX. F fares ex-HKG to London/USA are at least 12-13k AUD, and often significantly more, up to 20k.
*....it does not take much math to figure that CX is likely better off skipping F class on the OZ routes. CX can make as much cash in F flying just 2 of the four sectors as it would flying 4 of the 4 sectors. F yields would unquestionably take a significant hit if OZ F was re-introduced. The price point for F product ex-Australia is just not there for yields. It's not a question of demand - there is ALWAYS demand for a high end product at a low price, drop the price and you create demand - it's a question of yield. Years back when F was canned, yield was precisely the problem.
Compared to ex-HKG F fares (which is CX's opportunity cost), ex-Australia F fares are quite cheap. Among the fares I look at, ex-Australia hands down is the best way to experience the most full bling F class on nice carriers while paying the lowest price. In the grand scheme, Australia is still probably an overserved F market.
Jul 27, 2014, 9:55 am
#27
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Speaking as someone who occassionally handles Aus-HK corporate travel ticketing, I don't see why either CX or QF will cannibalise J for F while J is making such a killing off companies like the one I work for (or my missus's co for the matter). We don't allow F travel except for the C-suite.
Jul 31, 2014, 7:09 pm
#28
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Just noticed a 77W on HKG - SYD Dec 19 and return Jan 2. I'm sure it's a one-off to meet Xmas demand - but if anyone is desperate to fly a 77W to Aus - there's your chance. No F though so 77G.
Jul 31, 2014, 8:04 pm
#29
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03DEC14 - 30JAN15:
CX139 HKG 0850 SYD 2100 77W A*
CX138 SYD 2220 HKG 0500+1 77W A*
*77W operates alternate days
31JAN15 - 28MAR15:
CX139 HKG 0850 SYD 2100 77W D`
CX138 SYD 2220 HKG 0500+1 77W D`
`77W operates daily
Last edited by freakinflyer001; Jul 31, 2014 at 8:24 pm
