carrotjuice

I wonder how CX “feels” against its main competition SQ - when the Singapore government opens up VTLs to various countries (that sees an uptick of SQ share price) while the HK government dig their heels in a COVID zero policy with its punitive 21 days quarantine, isolating HK even further…

sxc

I wonder if CX is saying to the government that if they want to continue like this, they need to increase their investment like last year.

Cambo

There are only a few ways to get a company to comply with what a government wants, without putting all kinds of disputable laws in place. Get the company on a money feed, and they'll comply with whatever you want, legit or outright illegal.

On the other hand, this also implies the end of a glorious Cathay Pacific empire, changing CX into just "another" China airline, being avoided by Westerns, whenever possible. And, yep, I know, there is a lot of Hong Kong people critics towards CX, though "the other one" (SQ) is no better, on the contrary, I would say, having flown them now several times in Business.

percysmith

SQ still managed a transit business of sorts during the pandemic. CX will shrivel into a O&D carrier dependent on government handouts to provide what is a community service obligation to HK residents.

Pure transit (ME3) and pure O&D (QF et al) will get a boost from the pandemic, at the expense of mixed O&D/transit airlines like CX, SQ and BA.

Cambo

Yep, exactly !

And this does require a political/governmental intention to realize this.

And that seems to be pretty minimal in Hong Kong. Which in turn very well fits the expedited Hong Kong integration into China, as well as keep the foreign criticizers out of Hong Kong, And for China, the (expedited) integration is by far more important than keeping a "Western" airline hosted in Hong Kong, alive. Winnie does not have the eternal (political) life to sit out the 50 years, he wants the integration added to his personal palmarčs .........

brunos

That is an interesting point. Would you care to expand (without getting into a political or quarantine discussion).

I understand that business-heavy, high-cost airlines like CX are facing tough times.
But why would a mixed O&D/transit airline like BA be doomed after pandemic?
I am not saying you are wrong. I would just like to hear the logic from a FT expert.

percysmith

No expert. It's just one opinion. I'm trying to model for the following two post-pandemic changes: i) the more transit stops in itineraries, the more likely pax will experience non-compliance of some ever-changing requirements [that's why I think oneworld multi-city awards are dead for the foreseeable future] and ii) some governments will continue to practice parochial "keep the foreigners and their germs out" behaviour for a few years to come.

So if you're a completely parochial government - say some Australian states - and your airlines have always been principally been O&D anyway, they're fine and they will prosper. It's almost like the other jurisdictions have imposed a barrier to trade on themselves to stop servicing your nationals
In the other extreme, the ME3 (or maybe, just QR, I spot UAE is now a Group A country) - whose home governments have never restricted parochial restrictions on transit traffic, they're fine too. The world should be thankful to these airlines for continuously being willing to carry their hazardous cargo - that is, human passengers since 2020.
It's airlines like CX and SQ that depend on a mix of local and transit passengers that are stuck in the middle. They can't operate on O&D alone - before the pandemic I've written enough about Northern Transit, and also connecting westerners to Asia. Yet their governments behave like the parochial ones like the Australian states - we freak out on every transit transmission case. So they're going to have to give up their O&D business.
I wonder is it fair to put BA/UK in there. UK itself has kept its door to transit relatively open. However other jurisdictions (not just HK) have/had put up restrictions against it as an origin. So I grouped BA as a mixed O&D/transit airline as CX and SQ.

tfung

New Fly Ready document check

https://www.scmp.com/news/hong-kong/...cation-feature

brunos

It has been used at many airports already.
Got it last month.

feh

More significant surely is the announcement last night that opening up with the Mainland will happen "gradually" between late December this year and June 2022, with opening up to the rest of the world only to be contemplated thereafter.
Then today this message was further caveated that such an opening up with the Mainland is still merely being "hoped for" and that there will be all manner of circuit-breakers in the event of a single community transmission in HK/ case of unknown origin etc

I'm now seriously starting to wonder whether CX will still be in existence by the time Asia's so-called "World" City starts contemplating travel with anywhere other than the Mainland.

Cambo

Even with the best Western vaccines available, there are major Covid-19 flare-ups in Europe, currently approaching health-catastrophic levels. Of course, this is largely due to the stubborn anti-vaxxers (freedom, you know), though it shows, that even with the best vaccines available, "it's not enough".

China, on its own, does not have used the better Western vaccines, due to political reasons to prove the existence of a perfect political system, so it'll be difficult to change that mechanism. Even with high vaccination levels (see the Cambodian "success"), the China origin vaccines show, not being able to suppress and contain Covid-19 infections/clusters. So, to avoid major health-catastrophic situations (IE an out of control Covid-19 pandemic inside China itself), the China government does not have many (or better -any-) alternatives left, than keeping the doors closed and put rigorous measures in place, just in case a Covid-19 infection slips in. The latter being unavoidable, as also AUS and NZ did find out.

So, yeah, until China does approve and scale-up the production/application of their own invented mRNA Covid-19 vaccines significantly (now only in final third phase testing, for one brand, as it seems from limited information available), it is unlikely, China will open up their borders for the public soon, say within a year. Let alone scrap the quarantines, etc.

And, the major consequence of that is, our dear CX will have a difficult time, both for passenger numbers as well around CX crew return-home quarantine measures. A perfect political system comes with its side effects, so to say, especially when the powers in charge prefer to dictate and rewrite history along their own preferences.

freed0m

You mean western "success" like in Singapore? With Pfizer and Moderna for more than 80% of total population(more than 90% for eligible population), one of the highest vaccinated nations in the world with the best western vaccines? yet with more than 50, close to 100 cases per 100K population now?

Cambo

On the contrary. Even with proper Western vaccines, but unfortunately to many anti-vaxxers, it is not possible to stop Covid-19, as the EU/UK and also Singapore flare-ups do show.

With much inferior vaccines and not significantly higher vaccination levels in China, it can not be expected that opening up China would not result in a health-disaster.
Or so to say, IF China would abandon its zero-Covid cases strategy, things would go haywire quite fast (faster than things get out of control in Western countries). So, opening up the China borders is simply not going to happen, until at least the application of mRNA vaccine boosters does reach or surpass the current China vaccination level. And that can easily take another 9 months, if not longer.

(And by then, it will be clear from results in Western countries, whether the booster will be sufficient to bring down the endemic level. It could very well be, the endemic level becomes acceptable, only once there is a proper medicine to treat Covid-19 infections. The current Pfizer medicine helps, but not more than that).

freed0m

Singapore already got more than 90% eligible population. How many anti-vaxxers are there?

Why is it?

Didn't the best western mRNA vaccines already show that vaccine alone is not enough?

If China does not want to open up, no amount of mRNA vaccines are going to make it happen.

Cambo

Singapore does not have that many anti-vaxxers.

Yep, that is what I try to make clear. EVEN WITH THE BEST mRNA vaccines, it is difficult to suppress Covid-19 (in Europe/UK), though those results get deluded by too many anti-vaxxers.

So, with the lower quality China vaccines, it can not be expected Covid-19 can be controlled, not even with a slightly higher vaccination level. So China will be condemned to their current zero Covid-19 policy, to avoid a health catastrophe, until at least the China based mRNA vaccine(s) is/are rolled out with a sufficiently high vaccination level. Give China at least 9 months to accomplish this. Before that is reached, the China borders aren't going to open up (significantly).

And on top of the above, it could very well be, the (mRNA) booster shots aren't enough to reduce Covid-19 into a non-life threatening endemic situation, and a next-generation Covid-19 medicine is needed. The only "current" Covid-19 medicine (Pfizer) is only a (significant) reduction in severe cases.