lingua101

I do not think SQ and CX are in similar issues.

SQ has more fiercer competition from the LCC compare to CX (if any).

SQ has also facing quite fierce competition from ME3. The Indonesian market pie is now is getting smaller for sure with ME3 offering more frequency to Europe and most of the time cheaper also. Not to mention, with GA is much better than they used to be, SQ is probably losing some traffic that they used to enjoy

boybi

So the US3 are making huge profits. It's just I always see in avaiation news, and also from this forum, that a lot of airlines are cutting back on a lot of things.

triplefives

No, HK Express and HK Airlines are two separate entities although there is some cross ownership between the two.

FlyerTalker688786

Ahhh you are only half right. You have not counted lost revenue and the brand image damage. But your point is taken. $1 billion is nothing compare to the fuel gamble. The sad thing is it does appear the fuel hedge loss will continue to 2018 as TomYoung indicated. And as kaka said, CX would have be earning $1.21 billion in 2016 if not the hedge. I don't think it is a good idea to waste $1 billion to add more seats in a competitive environment while your underlying profit is not much more for that.

Now we are back to USP. The unfortunately thing is CX will be forced to cut frequency when there are more seats in the market compelled with decline of sales. We already see LAX being reduced. Although SFO is raised but for how long before HKG-SFO becomes too competitive? On another hand, if you think CX's USP is fly O&D from Hong Kong, unfortunately majority of CX's passengers (from Taiwan, mainland China, Japan and South Korea and the southeast Asia) does not agree. CX's USP is its product and premier brand recognition. You are right that many business people also choose CX for its non-stop and schedule. But the number is small. What CX is trying to allure, i.e. the casual travellers who purchase ticket based on price, is frustratingly large in number but little value to retain.

In the end, I am not questioning the choice CX made to take B777 to 10 abreast. But I am questioning the timing. I think the timing is absolutely wrong. To going through the refit, CX will take on debt (I don't think the company would pay cash for the refit due to declining share price), amid the on-going fuel hedge loss, it is a questionable action. Plus even the company itself is admitting that they are in crisis due to competition.

To quote from BBC news: mmm...too many empty seats...So the reaction is to adding more seats. Did I miss anything here?

triplefives

And also too many empty seats means there's not enough takeoff slots at HKIA which is which the third runway has to be built.....

percysmith

Yes. You missed the part about cutting frequencies to locations where frequencies don't matter so much (tourist destinations in off season)

Danl6969

Not sure about all this CX bashing. My carrier of choice to far east - one of best seats in J long and short haul, amazing service, great lounges, great food, stytrax 5 star and always in top 5 airlines ratings.
They continue to invest in new fleet
LCC - totally disagree - and I do a lot of flying! are you confusing them with BA - terrible J seat and on short haul the seat isn't different to economy!, terrible lounges, terrible service, terrible food. and some of the oldest planes in the sky (like the 26yr old 747 I just flew on to LAS )


CX have been a hugely profitable airline, but had a bumpy year - very few airlines have had their profitability average over last 10 years - flights I travel on are always packed full in J - (they are even adding more LHR HKG flights)


considering they don't have the free flowing investment of the ME carriers I personally think they have done very well.


well done CX - keep up the good work - one bad year in 8 in the airline game is no bad achievement

kaka

really.... how come i dont find cx half as good as what u said.

HKGglobaltrotter

Let's pray CX management isn't comparing themselves with BA and think 'well done, keep up the good work, one bad year in 8 in the airline game is no bad achievement'...

leungy18

Full premium cabins isn't a sign of much. Most of those pax could be non-revs.

CX does have excellent J hard product and premium lounges. But other airlines are catching up quickly, and they are hacking away at CX's premium cabin market share. More and more airlines are retrofitting their J seats to reverse herringbone or other more private designs with all-aisle access. And instead of improving their product, CX seems to be focused on cost-cutting.

CX stock has declined 27% under Ivan Chu's tenure (beginning March 2014) in the bull market of the last few years. Meanwhile, UA has gained 50% in the same period of time; SQ has declined 2%; EK has declined 6%; BA's parent company has gained 29%; JAL has gained a whopping 54%.

Heads need to roll at CX corporate.

Danl6969

Interesting how all these other airlines that are fitting the reverse herringbone j are years behind cx - most are paying cx royalties - shows what a great seat it is.
aa only have the licence for the 777-300er do they tried the dreadful ying yang reverse herringbone on the 777-200

the fact that other carriers are putting in these seats is testament to the great product !

the fact that the ME airline es are coming up with insane products is simply due to free flowing money

the fact cx was overvalued recently is no reason to compare cx to a lcc

i see see no evidence of cost cut

new lounges all over the place , new fleet , updated j product in new fleet , excellent F suite,

cutting a few loss making routes is not cost or cost cutting its sensible business

look at Skytrax - ba aa etc etc don't appear - cx is still way up there

Happy

CX certainly is no LCC but rather an airline has long passed its prime time yet the management is so oblivious that it does not see that at all, just by the fact it continues to sell tickets at a huge premium against its competitors while the airline is no longer so "premium".

Danl6969

Huge premium fares? - I just paid lhr - fuz with and hkg stopover in j fir £1800 on their site and lhr - hkt over xmas for £1800 on their site

all ME were between double to triple
iffy china airlines the same or 50% more
eu airlines at least double

another sweeping starement about cx

just seeems a bit of insider bashing - just saying

TravelwhileyouEat

Just booked a couple of TPAC roundtrips given the current promotional fares where I am... 2.8K in J isn't bad considering everyone else is at 4k... but for normal fares, they are comparable with other airlines in the region (or more expensive if ex-HKG) so they need to differentiate... which they are not doing a good job on

tfung

Skytrax is a complete scam...