tfung

Totally agree with you about Australian market.... However, they use to have F class, so I assume there must be a financial reason it was all pulled out... I'm going to guess majority of the F seats were either not sold, or filled by upgrades or redemptions...

Ausriver

That was gen years ago they pulled out, and flyer between China and Australia has increased 10 times since then.

QRC3288

mate, it's not about the # of fliers. It's about YIELD! Read my last post, which got obscured due to the end of page. But I put some #s in there. It's pretty obvious to me why Australia doesn't have F right now....

Despite being infamous for having big spenders in China, the #s don't stack up in reality. You've gotta look at the #s. This is what CX has been doing for ten years when deciding not to add F. They're staring at #s and asking "what price can I get for that seat?" They're not saying how many cheap seats can I sell, but rather what is the price I can sell for each seat I put on the market. And yes, competition does matter. The fact that there's connectivity to all these other Chinese cities nonstop to Australia absolutely depresses premium yields from hub cities. This is just reality!

You can look at the price for SQ in F class from any Australian city to PEK or PVG. This should give you a good idea what CX can charge. For example, you are not going to get any more premium Australia to China than SYD-PVG. But guess what that goes for in Singapore Airlines First Class? $7,200 AUD, aka about $5,000 USD. Mate this is rock bottom price. CX sells discounted business class to North America for that price, and again remember CX to North America is just 2 sectors round-trip, not 4 sectors round-trip like Australia requires. I can guarantee you CX has looked at SQ charging those rates and has decided they're better off not pulling a 77W from any of their Europe or N. America destinations and sticking it on what amounts to a super-cheapo F route.


The examples I used in my post above are here:
Emirates F Class: Sydney to London round-trip.
Price: $12,000 AUD, aka <$10,000 USD
As I said above, I've paid actually more than this for CX Business Class between HKG and JFK. On 2 sectors, not 4.

Singapore Airlines F Class: Melbourne to Beijing round-trip.
Price: $7,300 AUD, aka $5,200 USD
....jaw drops at this price.

I added a little more in the post above, it ended up on the bottom of a page so probably didn't get read. Of course anything can happen, but when you wonder "why not?", I think that's the answer. And CX doesn't have to match SQ like SQ is forced to match the ME airlines.

sxc

Not that it makes a lot of difference to your point, but do keep in mind in USD terms, those prices were 25% higher just a while ago due to exchange rate movements.

Aldebaran

FRA is not the capital of Germany
MXP is not the capital of Italy
ZRH is not the capital of Switzerland (and Switzerland is anyway in Europe)

Ausriver

CX flies to 8 cities in NA and 8 cities in Oceania, none of the 16 cities are capital. What is going on with capital of a nation?

1010101

If i meant capital cities i would have said capital cities.

Those are the leading cities of Europe and the main destinations for anyone doing business with Hong Kong.

kamchatsky

True. There are a lot of mainland Chinese who would rather travel their local Chinese airline. But they don't have the frequencies such as CX with 4 flights per day.

Also lot of Aussies, including Chinese Australian, would prefer CX only because they know it is a quality airline compare to all other mainland Chinese airlines. Many would be prefer to stop over at HKG for holiday etc.

That I partially agree. I don't think CX has any larger planes available. So the next option would be either A380 (which CX doesn't have) or 777X (not yet available).

SYD-HKG J cabins always seems to be filled with passengers.

Maybe CX SHOULD buy A380s Afterall, CX ran out all the allowable frequencies for SYD/MEL/BNE/PER. There are still a lot of demand for SYD-HKG flights. They probably can get a good discount from Airbus these days, and only need 1 A380 per day rotation. Of course no point of getting 1 given they should get a few for economy of scale.

SQ has 2 A380s to SYD daily, QR has 1, EY has 1, EK has 3 (1 via BKK), KE and OZ sometimes has 1, CZ has 1, QF has a few (to HKG, DXB, LAX). All have them have F/Suites. Now you can say with all these competition it makes hard to make money. However it does not stop all these airlines bringing F/Suites to SYD (some multiple flights) daily. That is because there is a demand.

With HKG such a great city to stopover and transit, I think there is a missed opportunity for CX.


That was a long time ago though. I think that coincide with the SARS in 2003 when they pulled out? SYD is now quite different these days.

sxc

F was removed from Australia when coffin class was introduced: 2007.

kamchatsky

To me, I think CX is losing a lot of opportunities due to the fuel hedge losses for a past number of years, so they cannot get more aircraft on the configuration they want. CX is constrained in SYD in frequency, 77H doesn't help adding seats to SYD as it reduces Y count. So the only option is either go all 4 flights to 77G which they cannot due to 77G being used at other places as well.

Likewise for LHR as well. They have to add LGW due to running out of slots at LHR .... Maybe they should introduce A380s to LHR/SYD/JFK?

Now i understand why CX doesn't want to take 77H frames from JFK, LHR, FRA (and even ZRH) as they are all financial centres and probably have bank paying execs flying around. I am not asking that at all. I also understand LAX, SFO and even CDG .....

How about taking frames from say ORD, BOS, MXP? Are they THAT high yield? They still need 2 frames on each route to serve daily rotation? Can their flights be replaced with A350?

Ausriver

Mate, when you looking at prices, you don't just look at ex-Australia, you shall look at both ways. By having F to SYD, CX have full F service to Europe, Japan, China, BKK, TPE and NA, tickets are sold both ex-Australia and ex-EU, Japan, NA etc.

ex-TPE premium fare has always been cheap, but this couldn't stop CX keeping F to TPE, no one really needs F on such a short route but it is good to sell F all the way for transit pax.

Think of the pax movement between Europe and Australia, would someone book a F+J on cx or F+F with SQ, EK, QF, QR, EY etc. We are not talking about value for money but for those who could afford F like a cup of tea or those company's paying for F. That is how much CX's losing on SYD route.

Australia has the most destinations that CX serves, 6 at the moment, with about 80 flights weekly, and we're talking about only 6 F seats a day. Whoever thinks CX would have problems with those 6 F seats yield is not thinking.

However, the only reason I am thinking is, if CX introduces F to SYD, they will be unable to pull out 77H and replace with 77G when more capacities are required in near future. And unless CX start CBR, SYD will need 4 x 77G very soon, well as soon as CX could spear another 2.

rufflesinc

I don't have the time to cross ref the two lists, but another point is that if you're not in the 14 cities with ns to SYD, it's not likely you will have CX/KA service to HKG to connect to SYD.

With the uncertainties of china ATC, why risk missing the CX flight when you can go ns?

Ausriver

it is actually more of a language and culture problem. CX doesn't announce in mandarin (unless fly to tpe, pek and Pvg) even when over half of the people on board are mainlanders. Although most of the crew serving Y speaks mandarin, they will normally speak English to start with, a language that most tourist from china doesn't understand.

CX serves water and drink at cold temperature while old Chinese people would prefer everything in warm or hot. 2 days ago in CX J, the pax next to me in his 60s asking for hot milk as the beverage for breakfast.

QRC3288

This is true, but not for the reason you imply (there is "demand" for F to TPE. Actually, no there isn't...cash demand). The reason CX offers "F" on Taipei routes is simple: take extra cash from AA and BA for transit pax and only if it's convenient for CX.

And the reason why CX can do TPE (or MNL, or SGN, or BKK) but not SYD is because those regional destinations are very close to HKG and don't require an aircraft to be deployed for nearly 24 hours, as SYD does. But dont think for a second it's because there are attractive F yields out of those cities.

CX has a lot of 77H frames sitting around for 6-12 hours during the daytime hours in HKG due to timing of N. America and Europe flights. They deploy these regionally during the day, we well-know.

What CX does is kinda a "dirty trick", and us FT posters read about this almost every single day with people complaining about regional equipment downgrades from F-class planes. You literally can see this point proven in the pages of FT. Who are these posters getting swapped out, inevitably? They are almost all transit passengers flying on award tickets. What CX does is they grab extra revenue from their award partners like AA for the extra segment. But CX could really care less about delivering on this promise if the equipment is needed elsewhere. In CX's mind, these are low value passengers. Grab the extra revenue from them if it's there to be taken and the plane is laying around at HKG. But if not, who cares.


Yes, I get it. But again you're missing my point about yield. It's not whether there are pax willing to fly F - there are always passengers willing to fly F if you price it cheap enough. It's that virtually all airlines have extremely cheap F fares connecting Oz to Europe, and Oz to Asia. And CX, unlike SQ, has a real point-to-point (read: not connecting, aka cheap), robust N. American and Europe F class market for nonstop fares HKG-destination.

I don't think folks who don't buy fares to N. America realize how badly we get fleeced ex-HKG. Ask yourself, have you ever had to pay $12k USD for a business class round-trip ticket? $10k+ USD for a one-way F ticket? This is the reality of those of us flying to N. America. US airlines are terrible and most of us don't want to fly them, although AA's use of CX's seat is a nice improvement. Australia is about as fortunate as it gets for premium airline connectivity and really lucky when it comes to choices.

The two business models are different. SQ is operating a long-haul hub and spoke operation for F class to Europe. This is very similar to the ME Airlines, which is why SQ thinks they're in a fight for their lives. And this = inexpensive F fares for travelers. Ask SQ mgmt for the last decade - they'll tell you this exact thing, I'm not making it up they'll say this almost verbatim. And they'll also tell you CX F is a different animal - that people flying CX F (particularly cash F) are overwhelmingly point-to-point travelers, aka they're starting or ending in Hong Kong. This is a totally different traveler profile and you can charge 2-3x the price for these guys. SQ's business model used to be a lot more like CX. But it changed in a huge bang for SQ in the last decade with the ME carrier explosion.

A lot of this circles back to CX's lost-in-the-clouds strategy these days. Is CX an expensive, high-end point-to-point airline connecting Hong Kong to the world? Or are they becoming more of a connecting-traffic airline by pouring on capacity and destinations, but then who must compete in a highly competitive global J class market? In J class, they've done what you're recommending, and frankly the results have - at least in the last few years - really hurt them. But long-term let's see, I'm not as pessimistic they've just changed a lot as they blew open the doors on capacity. I'm hopeful they'll find their footing. This is a tangent though, unrelated to F.

Back to F. Interesting debate regardless. My bet is still on no F to SYD. We all work in different industries and have different professions on here, but at least in mine there is a demand for folks to, with some regularity, pay full fare F fares to/from N. America and a few select European destinations. These folks are almost all visiting Hong Kong, aka these aren't businessmen whose final destination is SGN or BKK but they're paying full-freight on CX F. There is consistent, daily demand for these guys to/from Hong Kong. Sigh, this is the land of very expensive fares....but folks are indeed paying $15-$25k USD for these tickets. This isn't every pax on the plane as we well know, and it might just be 5-10 per day across all of CX's flights to N. America. But there is indeed consistent demand for those insanely expensive F prices to N. America.

Now, if you're CX you can't compete with those types of yields internally (internally, what I mean by "compete" is you can't afford to take a 77H off one of those high yielding routes) by offering Australia connecting traffic F class. You realize you can buy F class to London ex-Sydney for virtually the same price ex-HKG? If you're promoting CX fly connecting pax SYD-HKG-LHR, this is silly just looking at the fares - I guarantee you CX writes this off as long as you can fly a ME carrier for 6-10k USD via Dubai, Abu Dhabi, Doha, etc. Why? Because CX can already capture that F price to LHR, but fly 18 hours less!. Aka, $6-10k USD is better if CX only has to operate you from HKG-LHR than SYD-HKG-LHR. The real "enemy" of no CX F to SYD in my opinion is the dirt cheap ME fares.

I think you would need SYD to be able to capture consistently 10-15k USD round-trip F fares SYD-HKG only aka not connecting traffic. Is this market there? I don't think so. But if you get a few folks daily willing to pay that, then I think you have a market. If you don't, I think you're dreaming to expect CX to run a connecting-traffic F operation, where yields are terrible....particularly considering CX has a real point-to-point F class market to N. America and Europe.

I do think you'd see F class reintroduced to SYD under a few scenarios:
1.) N. America or Europe market collapses for some reasons, aka opportunity cost of those planes declines (long-term though, I think you'd CX eliminate F altogether if this were the case)
2.) Lower-yielding Europe / N. American cities selectively cough up a 77H. This seems possible to me, as another poster above says.
3.) ME carriers pull out some F capacity from Australia, allowing yields to rise. This is also possible. If ME carriers pull capacity, I think this is your best bet.

SESTAR

Not sure how reliable it is but I have a F class booked for HKG-CGK next week. Wonder how the meal service would be. Any thoughts?