Let's keep some perspective here. Remember that cheapo airlines turn a profit on dirt cheap tickets precisely because they provide absolutely the bare minimum. No lounges, no free baggage, no priority lanes, no food, no IFE etc.

CX's issue is that full service Y is rarely profitable as it is a mix of cheapo and higher priced Y fares. The latter raises the average revenue per Y seat. If CX discovers that a lot of the Y, B, H, K, V, L passengers are MPC SL, then care is needed in changing MPC benefits for that tier.

If those members desert CX and/or stay but buy only the cheapo Y fares instead then average revenue per Y seat drops, affecting overall Y profitability. And if that goes red, then J/F profits end up filling that hole, and it's an own goal.

For some routes, CX might as well convert the A330 to all-Y configuration and discard J all together. Yesterday was the Nth time which J had less than 5 and PEY had 1, for my flight from RUH to HKG while Y was 95% full.

No no no, don't you get it, Y isn't important!

Many of the costs you mentioned are one-time investment cost with low variable costs. Which can easily be offset if not more than compensate by charging higher Y fares.

Which is the argument, who truly brings in the profits? Which market has a higher chance to grow and expand and which market is already matured?

But on a route like that (RUH-HKG) I am also willing to bet FFP isn't important either to 98% of the passengers

Haha. I was just offering that to the DYKWIAs in here.

If they shut down Y they might as well close that route. I would guess 90% of the passengers are overseas laborers from Philippines and mainland China with very few Saudis.

My understanding is Saudi Arabia doesn't allow tourists, so generally all non-Saudis are either going there to work or worshipers .

Or transit? I came up with some BA-CX transit Riyadh redemptions (didn't actually take them up).

Not sure if I get your theory here...

So does that mean on the RUH - HKG flight there are only 5 J paxs, clearly J is loosing money, so lets cut the benefit of J paxs on this flight, no food, no lounge, no priority boarding.

or

"I fare" paxs aren't contribute to a healthy profit, so we should axe their benefit, no food, no lounge, no priority boarding.



If we look at a typical 77H, J/F paxs occupy roughly 3.66times more space than Y/PY paxs, if we are only looking at the difference between deep discount Y and V fare on a LHR-HKG route, with a fare difference of £350, that is £1281 (US$1921=£350*3.66times*fx), adding in a deep discount fare *3 = £1800 +£1281=£3081 I don't think V+ pax are contributing less than a J pax from LHR-HKG here. (Amended at 1233 GMT)

If SL paxs pay their fair share of a V+ ticket, I really wouldn't axe their benefit. Except lounge access, other benefit doesn't really cost CX much, CX just need to adjust the way they do things to create a win-win. Speak of lounge access, £350 for lounge access and a bunch a priority that doesn't really have any additional cost, if I am a business owner, I will kept my mouth shut and not say anything.

Lounges are significant variable costs. So are extra staff on planes and for managing boarding. And F&B. And interlining.

All the evidence suggests that the main segment of the market that is growing is el cheapo Y, which is pretty damaging for network carriers as it eats into their volumes and profitability. So the argument that they should target Y customers to make money is pretty weak. There is however a huge need to defend both profitability and volumes in Y. And FFP's are probably a significant element of that for CX. Only they will know.

J certainly loses (not looses) money on that route at those utilisation rates. And if that is the normal state of affairs for most the flights on this route, either CX raises the prices for Y, or deploy aircraft with more Y or both.

Products have to be reasonably consistent across routes, so I don't think any airline would consider cutting benefits on a given route for J just because it loses money. More likely to simply cut capacity on the route e.g. frequency, size of aircraft etc.

Someone who flew that route saw a low of onward connections to MNL as well

I think after thousands of posts its safe to say we won't convince one another, and will just have to wait and see. CI seems to lost a significant number of Y-FFP type fliers to CX (ironically) when they switched to F/J-only top-tier FFP model, and recently switched back to the way it was, realizing the mistake.

It will be interesting to see if CX will fallen into the same mistake, or will the other camp be right, the marginal lost of Y revenue is more than off set by the cost savings CX incurs from this new "enhancement" of their FFP.

Only time will tell.

Not a great idea from the fleet management point of view... Since those all-Y 330 can't be use anywhere else. And even for those tour CTS flights CX managed to sell J for few hundred HKD more which still help the margin)

Also KA is converting their all-Y 320 back to J-Y mix during the seat renovation... That either means a little J will still help to boost margin, or those all-Y planes are really not good for fleet management

Unless CX has a multiple dailies of port-to-port of primarily Y traffic, Y-only plane will be a nightmare for fleet management for CX.