Oct 2, 2015, 3:08 am
Last edit by: sxc
Related threads:
What are the best value segments under the new system?
Switching out of Marco Polo: What do you choose and why?
FAQs as answered by AgencyGuy:
When will the mid-tier benefits be awarded?
They will be awarded as the member hits the mid-tier milestone. Not at the end of the membership year. These will be valid for a year commencing the day they are granted. No points are deduced when members are awarded these benefits.
Does that mean a member reaching 1800 tier points will get all three mid-tier benefits?
Yes, each benefit will be made available as the member hits the 1400, 1600 and 1800 point milestones
What mid-tier benefits will be awarded as of the conversion date of 15 April 2016?
The mid-tier benefits will kick in automatically after 15th April, if your converted club points balance exceeds the mid-tier thresholds. So for a Diamond tier member, if your converted balance is 1800 points you will immediately have access to two first class lounge guest passes, four bookable upgrades and one companion Gold card.
A Gold member on his/her way to Diamond pick up four short/medium upgrades along the way, but a renewing Diamond gets nothing?
You are correct, Silver, Gold or Diamond members on their way to renewal, don’t get additional benefits until they reach the mid-tier thresholds. But they will get there, I guess the benefits are designed to recognize members who go the extra mile after they have passed their renewal thresholds.
Is there any requirement on the underlying booking sub-classes when using a mid-tier upgrade "coupon"?
Yes, the original flight needs to be booked in an “upgradable” sub-class, the same sub-classes that qualify for Asia Miles upgrades
Is economy upgraded to Premium Economy or business for flights with Premium Economy?
It is always a one class upgrade so Economy to Premium Economy, if a flight does not have Premium Economy then the upgrade is to Business.
Are the sub-classes for the upgraded bookings A, I, and E (if applicable)?
I don’t know what these subclasses are yet other than that they will be revenue instead of redemption sub-classes. I guess they will be announced later.
What miles will be awarded for a flight upgraded using a upgrade coupon? The original ticket class, or the upgraded class?
I understand that both points and miles will be credited based on the upgraded class.
Green Re-Qualification
For Green members, if their membership year ends before 15 April 2016, like now, their membership will automatically be renewed. If their membership ends after 15 April and they have ANY club points at that time, they will be automatically renewed for another year (even if they are below 100 pts). If their membership ends after 15 April and they have no club points at that time, they will lose their Green membership or have the option of paying the US$100 fee to renew.
What are the best value segments under the new system?
Switching out of Marco Polo: What do you choose and why?
FAQs as answered by AgencyGuy:
When will the mid-tier benefits be awarded?
They will be awarded as the member hits the mid-tier milestone. Not at the end of the membership year. These will be valid for a year commencing the day they are granted. No points are deduced when members are awarded these benefits.
Does that mean a member reaching 1800 tier points will get all three mid-tier benefits?
Yes, each benefit will be made available as the member hits the 1400, 1600 and 1800 point milestones
What mid-tier benefits will be awarded as of the conversion date of 15 April 2016?
The mid-tier benefits will kick in automatically after 15th April, if your converted club points balance exceeds the mid-tier thresholds. So for a Diamond tier member, if your converted balance is 1800 points you will immediately have access to two first class lounge guest passes, four bookable upgrades and one companion Gold card.
A Gold member on his/her way to Diamond pick up four short/medium upgrades along the way, but a renewing Diamond gets nothing?
You are correct, Silver, Gold or Diamond members on their way to renewal, don’t get additional benefits until they reach the mid-tier thresholds. But they will get there, I guess the benefits are designed to recognize members who go the extra mile after they have passed their renewal thresholds.
Is there any requirement on the underlying booking sub-classes when using a mid-tier upgrade "coupon"?
Yes, the original flight needs to be booked in an “upgradable” sub-class, the same sub-classes that qualify for Asia Miles upgrades
Is economy upgraded to Premium Economy or business for flights with Premium Economy?
It is always a one class upgrade so Economy to Premium Economy, if a flight does not have Premium Economy then the upgrade is to Business.
Are the sub-classes for the upgraded bookings A, I, and E (if applicable)?
I don’t know what these subclasses are yet other than that they will be revenue instead of redemption sub-classes. I guess they will be announced later.
What miles will be awarded for a flight upgraded using a upgrade coupon? The original ticket class, or the upgraded class?
I understand that both points and miles will be credited based on the upgraded class.
Green Re-Qualification
For Green members, if their membership year ends before 15 April 2016, like now, their membership will automatically be renewed. If their membership ends after 15 April and they have ANY club points at that time, they will be automatically renewed for another year (even if they are below 100 pts). If their membership ends after 15 April and they have no club points at that time, they will lose their Green membership or have the option of paying the US$100 fee to renew.
Changes to MPC announced for 15 Apr 2016
Dec 18, 2016, 5:33 pm
#976
Join Date: Jan 2006
Programs: AAdvantage Asia Miles Air China
Posts: 870
Where did you get that idea from? To charge premium fees for its premium products, CX just has to keep a vice-like hold on HKG take-off slots.
And my counter-argument is the "money-taken" is replaced by new low-fare based flyers. So you might think you took revenue away from Cathay, but Cathay has no problem making that back from other/new flyers.
the amount of regular customers offended/left may be replaced by the amount of new customers gained. And if that is true, then the corporation comes out the winner. If that is false, then it was a bad decision.
CX banking on growth to replace the leavers, and that there will be many who have lost out who will continue to fly CX. Probably a good bet when the decision was made in 2015.
Dec 18, 2016, 6:02 pm
#977
Join Date: Aug 2005
Posts: 248
Just head over to CAN or TPE and CX has no premium whatsoever over other one-stop options.
So what this tells me is that CX feels like HKG-based flyers are theirs to keep, so we could as well gain some incremental business from lower yielding business elsewhere.
Dec 18, 2016, 6:07 pm
#978
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,740
CX needs to do whatever it has to do to maintain frequencies, but no further.
Isn't BA pursuing a similar strategy wrt LHR?
Dec 18, 2016, 8:18 pm
#979
Join Date: Nov 2007
Location: Hong Kong
Programs: CX, UA, Shangri-La, Hyatt, Starwood
Posts: 7,708
CX has a close to a monopoly as you can get in this day and age regarding slots and gates at HKG. They have killed even the prospect of LCCs having a base at HKG. (The Jetstar fight became public, a few others haven't). Singapore is a good example of a former monopolist losing much of their monopoly, due to the government intervening.. Singapore set out to make SIN an LCC hub and that's what happened. AirAsia and Jetstar were given slots and gates, meanwhile Tigerair and Scoot were pretty much forced down SQ's management's throats. Those who didn't go along with the program were forced out or moved elsewhere in Singapore Inc. At HKG that doesn't happen. Swire + CX have effectively latched onto the crony capitalism train and killed the prospect of an LCC operator at HKG, at least for now.
Agreed HX is growing in strength, but we're a long way off from where HKG can be called "competitive" for any businessman's dollars. Competitive is offering either rock bottom fares to most regional destinations via a LCC, or frequency via a full carrier. Currently HKG has neither. CX has made sure of that. HX flies to Auckland, Gold Cost once in a while, and Vancouver next year. They need about 15 more long-haul destinations, many of them multiple times daily, to even think about competing for the bigger corporate dollars based in HKG. ME carriers cannot reasonably take me to Australia, or the US, or Canada, etc. These represent the majority of CX's high-yielding long-haul seats.
An noncompetitive market doesn't mean you don't have competition on some routes...clearly CX has that, but so does every monopolist usually via bilateral agreements where at least one carrier from each country get to operate. That is the "good old days" and hardly exists anymore in developed countries. Although ironically, CX/KA still have one of these sweetheart deals! Which is just remarkable given how developed HK is, they still have one of these backwards, screw-the-customer deals thanks to the government. It's unreal. You know CX and KA have separate air certificates so they play the charade that HK has "two" separate carriers operating to India, so HX, UO, etc. can't enter the market? The India side is Air India and Jet Airways. HK side is Cathay...and Dragon. This is why Dragonair randomly flies to BLR and CCU when they don't really seem to fit into the network. It's just laughable.
From a competitive standpoint, HK is really a farse. What noncompetitive means is, the captive home market really doesn't have somewhere to consistently park their bums for nonstop destinations. I only have CX/KA to do that.
The ME airlines really upended everyone's business model in the last decade, and CX is no exception. But take North America: CX has virtually zero competition except the crappy US carriers, and Air Canada. That's why I'm fully with the guy above hoping for AA to continue to up it's game. I'm not really optimistic though.
Dec 18, 2016, 8:52 pm
#980
FlyerTalk Evangelist
Join Date: Dec 2004
Programs: CX Green, QF Platinum, BAEC Silver, Hyatt Glob
Posts: 10,780
From a competitive standpoint, HK is really a farse. What noncompetitive means is, the captive home market really doesn't have somewhere to consistently park their bums for nonstop destinations. I only have CX/KA to do that.
The ME airlines really upended everyone's business model in the last decade, and CX is no exception. But take North America: CX has virtually zero competition except the crappy US carriers, and Air Canada. That's why I'm fully with the guy above hoping for AA to continue to up it's game. I'm not really optimistic though.
The ME airlines really upended everyone's business model in the last decade, and CX is no exception. But take North America: CX has virtually zero competition except the crappy US carriers, and Air Canada. That's why I'm fully with the guy above hoping for AA to continue to up it's game. I'm not really optimistic though.
I don't think I'm alone here. If the loss of revenue like mine is less than whatever CX gains from the MPC changes, then well done to them. If not, then it will have been a failure.
Dec 18, 2016, 9:03 pm
#981
Join Date: Nov 2007
Location: Hong Kong
Programs: CX, UA, Shangri-La, Hyatt, Starwood
Posts: 7,708
Having said that, from the Frequent Flyer gamer's perspective, for those who want to stay in oneworld, HKG is pretty well served these days, so there's some non-CX options. There is BA and QR to Europe, QF to Australia, AA/JL to USA and MH to some random destinations. Yes these carriers might not be as convenient, but the change in the MPC has opened my eyes to non-CX options, and also the ability to fly premium cabins for just a small margin more than flying CX in economy.
I don't think I'm alone here. If the loss of revenue like mine is less than whatever CX gains from the MPC changes, then well done to them. If not, then it will have been a failure.
I don't think I'm alone here. If the loss of revenue like mine is less than whatever CX gains from the MPC changes, then well done to them. If not, then it will have been a failure.
The fact I'm even willing to consider connecting in Japan to the US via JAL is....a problem for CX. Because even though it's on the way, it's still pretty darn inconvenient compared to all the nonstops CX offers (I am picking JAL every time when I can schedule a meeting, however in Tokyo before launching off to the US).
CX is used to being the monopolist and this is the first real bout with competition they're facing. But we're a long way away from saying HKG is "competitive"
. Another interesting change is the sheer global nature of FF programs these days. A decade ago wasn't quite like this. Travelers are increasingly becoming free agents. The ME carriers have helped with that.But I still must face reality. I spend most of my "living" time in Hong Kong. I cannot avoid CX. This is how you know they have a stranglehold on the market. I've significantly cut the % of my flights on CX this year - although unfortunately, due to a hectic travel schedule, my $ spend and gross mileage has gone up on CX - but I still cannot get CX/KA much below 60% of my flights. That's really not possible unless I'm grossly going out of my way. CX used to capture 80%+ of my business btw, maybe 90%. So I've actively taken them down. But I can't get it much lower than 50-60% without seriously inconveniencing myself. That's what I mean by "non-competitive". Our options are limited, and it sucks!
Dec 18, 2016, 9:12 pm
#982
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,740
mate, didn't want to harp on it from your original post, but HK is pretty well considered a highly noncompetitive market around the industry. Not competitive at all. CX's competitors have zero sympathy for CX's "pain" - much of it is self-imposed, at least on the passenger side. As in, as far as big global airports go, HKG is considered one of the worst in terms of competition. CX and KA have a stranglehold on the local market. That's why the fact that CX is losing business from guys like many on this board is so remarkable.
...An noncompetitive market doesn't mean you don't have competition on some routes...clearly CX has that, but so does every monopolist usually via bilateral agreements where at least one carrier from each country get to operate. That is the "good old days" and hardly exists anymore in developed countries. Although ironically, CX/KA still have one of these sweetheart deals! Which is just remarkable given how developed HK is, they still have one of these backwards, screw-the-customer deals thanks to the government. It's unreal. You know CX and KA have separate air certificates so they play the charade that HK has "two" separate carriers operating to India, so HX, UO, etc. can't enter the market? The India side is Air India and Jet Airways. HK side is Cathay...and Dragon. This is why Dragonair randomly flies to BLR and CCU when they don't really seem to fit into the network. It's just laughable.
From a competitive standpoint, HK is really a farse. What noncompetitive means is, the captive home market really doesn't have somewhere to consistently park their bums for nonstop destinations. I only have CX/KA to do that.
...An noncompetitive market doesn't mean you don't have competition on some routes...clearly CX has that, but so does every monopolist usually via bilateral agreements where at least one carrier from each country get to operate. That is the "good old days" and hardly exists anymore in developed countries. Although ironically, CX/KA still have one of these sweetheart deals! Which is just remarkable given how developed HK is, they still have one of these backwards, screw-the-customer deals thanks to the government. It's unreal. You know CX and KA have separate air certificates so they play the charade that HK has "two" separate carriers operating to India, so HX, UO, etc. can't enter the market? The India side is Air India and Jet Airways. HK side is Cathay...and Dragon. This is why Dragonair randomly flies to BLR and CCU when they don't really seem to fit into the network. It's just laughable.
From a competitive standpoint, HK is really a farse. What noncompetitive means is, the captive home market really doesn't have somewhere to consistently park their bums for nonstop destinations. I only have CX/KA to do that.
HKG is, by far, one of the most competitive market in commercial airline industry. All premium airlines with nice F cabin flies to HKG. No only does CX have to compete all of them, but they also have to compete against all other LCCs. In the case of F, yes, Business 101 makes perfect sense for us to treat the customers with A/F paid customers first, but it is going a bit too far to compare award takers and paid customers. At the end, they are still paid, but in different currencies agreed by CX. That is a bit extreme. You also couldn't say the same to people who fly out of the other countries, paid 50% or even less to fly CX F and CX has to treat hub captives better than them. In the eyes of CX they are luring the other customers away from their competing airlines.
Dec 18, 2016, 9:29 pm
#983
Join Date: Nov 2007
Location: Hong Kong
Programs: CX, UA, Shangri-La, Hyatt, Starwood
Posts: 7,708
Funny. Non-HKers perceive us to be very competitive:
Personally I believe PaulInTheSky is misinformed: yes lots of airlines fly nice F here, but who cares about a product that is paid for by miles more than by cash? CX may be receiving more cash for long-haul Business seats *on average* than long-haul First because corporates pay fares for the former.
Personally I believe PaulInTheSky is misinformed: yes lots of airlines fly nice F here, but who cares about a product that is paid for by miles more than by cash? CX may be receiving more cash for long-haul Business seats *on average* than long-haul First because corporates pay fares for the former.
I can see how people might come to that conclusion (a lot of airlines fly there! Thus, competitive!), but it's just not correct. HKG is one of the least competitive major airports in the world. This is just the industry reality. CX/KA have an absolute stranglehold on the local populace.
Dec 19, 2016, 5:58 am
#984
Join Date: Feb 2011
Location: HKG, TXL
Programs: CX DM
Posts: 566
Personally I believe PaulInTheSky is misinformed: yes lots of airlines fly nice F here, but who cares about a product that is paid for by miles more than by cash? CX may be receiving more cash for long-haul Business seats *on average* than long-haul First because corporates pay fares for the former.
And my counter-argument is the "money-taken" is replaced by new low-fare based flyers. So you might think you took revenue away from Cathay, but Cathay has no problem making that back from other/new flyers.
This was, is, and always been the decision-making behind any corporation that cuts benefits - the amount of regular customers offended/left may be replaced by the amount of new customers gained. And if that is true, then the corporation comes out the winner. If that is false, then it was a bad decision.
This was, is, and always been the decision-making behind any corporation that cuts benefits - the amount of regular customers offended/left may be replaced by the amount of new customers gained. And if that is true, then the corporation comes out the winner. If that is false, then it was a bad decision.
I'm guessing that one of the reasons why loads are dropping for CX is that even though they cut FF benefits for Y flyers, they havent really cut the prices and are still a considerable premium over other airline. Lets not talk about outport fares etc., where CX is actually somewhat competitive.
How I see it (and lets keep it for simplicity to 1 pax):
Before:
- 1 Occasional Y traveller might pick CX ex HKG (lets say 50% chance due to maybe schedule being slightly better and price not being too much higher)
- 1 Frequent Y traveller (GO,DM) will definitely pick CX and most likely pay V class even though S/N/Q might be available.
Now, Basically the frequent Y traveller becomes an occasional Y traveller:
- 2 Occasional Y traveller might pick CX ex HKG (lets say 50% chance due to maybe schedule being slightly better and price not being too much higher)
But, since the fares didnt get cheaper at all (on the contrary, adding fuel surcharge etc, made fares more expensive), now you have two pax who might or might not fly CX.
And even if they did fly CX, maybe now they credit to BA/AA/etc. and they will still use the same benefits, the only difference being that now the majority of OPUP'ed Y/PEY flyers might not even be from their own FF programme anymore but from another programme.
The only real benefit of 'cost cutting' by losing these people is the lounge cost, really, right? What does BA pay CX for the usage of the Pier? 200 HKD per visit? So is it really worth losing 5000 HKD for a HKG-TYO because you dont want to pay 200HKD for the lounge usage?
The only real 'cost-cut' within the MPO programme that really made sense was the guaranteed V/R?/D class fare booking. I can see how a lot of people (Y/PEY DM's) probably took advantage of that, booking an overbooked flight last minute in R knowing they will most likely score the guaranteed upgrade to J.
Although I also disagree on the new system, basically you are pretty much you'll always manage to book J last minute, does it really matter what status you hold?
Old CX: 60'000 miles or 60 sectors for GO (minimum V class - reset to 0 after you hit them + 120'000 for DM)
AA/BA: We all know how much easier these two are, so I'm not even going to bother.
AB: 50'000 miles or 60 sectors for OWS / 100'000 for OWE(you earn 1250 miles for intra-european Y flights, even if they are only 260 miles apart, for example: TXL-FRA).
IB: 2250 points or 50 sectors for OWS / 6250 points for OWE (150 pts for a return Y Spain-EU = 15 return trips for OWS).
AY:80'000 points or 46 sectors for OWS / 150'000 points or 76 sectors for OWE (HEL-Asia return gets you 16'000 points in Y so you need 5 return trips for OWS).
JL: 50'000 (25'000 on JL) for OWS / 80'000 (40'000 on JL) for OWE (granted, some Y subclasses only earn 25/50/75 % which equals it out again).
JJ: 70'000 KM (35'000 on JJ) for OWS / 130'000 KM (65'000 on JJ) for OWE
MH: 50'000 miles for OWS / 100'000 miles for OWE (normal 100% accrual for Y).
QF: 700 credits for OWS / 1400 credits for OWE (80 credits for SYD-HKG return in Y = 9 trips for OWS).
QR: 300 points for OWS / 600 points for OWE (50 points for DOH-HKG return in Y = 6 trips for OWS).
RJ: 40'000 miles for OWS (63'k in two years for requal.) / 100'000 miles for OWE (90'k for requal.) - (10'000 miles for AMM-HKG return = 4 trips in Y for OWS).
S7: 50'000 miles for OWS / 75'000 miles for OWE (100% accrual in Y).
UL: 40'000 miles (20'000 on UL) for OWS / 60'000 miles (30'000 on UL) for OWE (100% accrual in Y).
None of these - unless I'm completely blind - required any sort of J class flying.
The only ones which come anywhere close to MPO's OLD system in terms of difficulty getting OWS/OWE in Y only are QF and JL.
For all the other programmes, both the accrual rate is much better as well as the threshold requirement for OWS/OWE.
Compare most of these to old MPO: You had to book V (which was definitely not the cheapest most of the time) and for a EU-HK return you'd get ~10'000 miles. This meant at least 6 return trips for GO or at least 12 for DM.
Compare to the new MPO: 70 TP for EU-HK return = 8,5 return trips for GO or 17 for DM.
Last edited by mxr; Dec 19, 2016 at 6:02 am Reason: formatting
Dec 19, 2016, 6:42 am
#985
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,740
http://onemileatatime.boardingarea.c...cost-airlines/
http://onemileatatime.boardingarea.c...ckets-insight/
So 0.75cpm (USD)
If that's so - a TPAC F R/T award is roughly US$1,350 (West Coast)-US$1,650 (East Coast)
You can't buy a straight PE for that little money
I doubt CX aims to sell seats to redemption (even if partner)
But it's a useful tool for practising price discrimination in a capacity-constrained airport http://www.flyertalk.com/forum/briti...l#post25916250 - by using miles CX can sell a £3 fare without incurring demand leakage on the £5 and £7 fare and still keep up frequencies.
Dec 19, 2016, 7:23 am
#986
FlyerTalk Evangelist
Join Date: Dec 2004
Programs: CX Green, QF Platinum, BAEC Silver, Hyatt Glob
Posts: 10,780
None of these - unless I'm completely blind - required any sort of J class flying.
Dec 19, 2016, 7:24 am
#987
Join Date: Jun 2010
Location: ROC/NYC/MSP/LAX/HKG/SIN
Posts: 3,212
mate, didn't want to harp on it from your original post, but HK is pretty well considered a highly noncompetitive market around the industry. Not competitive at all. CX's competitors have zero sympathy for CX's "pain" - much of it is self-imposed, at least on the passenger side. As in, as far as big global airports go, HKG is considered one of the worst in terms of competition. CX and KA have a stranglehold on the local market. That's why the fact that CX is losing business from guys like many on this board is so remarkable.
CX has a close to a monopoly as you can get in this day and age regarding slots and gates at HKG. They have killed even the prospect of LCCs having a base at HKG. (The Jetstar fight became public, a few others haven't). Singapore is a good example of a former monopolist losing much of their monopoly, due to the government intervening.. Singapore set out to make SIN an LCC hub and that's what happened. AirAsia and Jetstar were given slots and gates, meanwhile Tigerair and Scoot were pretty much forced down SQ's management's throats. Those who didn't go along with the program were forced out or moved elsewhere in Singapore Inc. At HKG that doesn't happen. Swire + CX have effectively latched onto the crony capitalism train and killed the prospect of an LCC operator at HKG, at least for now.
Agreed HX is growing in strength, but we're a long way off from where HKG can be called "competitive" for any businessman's dollars. Competitive is offering either rock bottom fares to most regional destinations via a LCC, or frequency via a full carrier. Currently HKG has neither. CX has made sure of that. HX flies to Auckland, Gold Cost once in a while, and Vancouver next year. They need about 15 more long-haul destinations, many of them multiple times daily, to even think about competing for the bigger corporate dollars based in HKG. ME carriers cannot reasonably take me to Australia, or the US, or Canada, etc. These represent the majority of CX's high-yielding long-haul seats.
An noncompetitive market doesn't mean you don't have competition on some routes...clearly CX has that, but so does every monopolist usually via bilateral agreements where at least one carrier from each country get to operate. That is the "good old days" and hardly exists anymore in developed countries. Although ironically, CX/KA still have one of these sweetheart deals! Which is just remarkable given how developed HK is, they still have one of these backwards, screw-the-customer deals thanks to the government. It's unreal. You know CX and KA have separate air certificates so they play the charade that HK has "two" separate carriers operating to India, so HX, UO, etc. can't enter the market? The India side is Air India and Jet Airways. HK side is Cathay...and Dragon. This is why Dragonair randomly flies to BLR and CCU when they don't really seem to fit into the network. It's just laughable.
From a competitive standpoint, HK is really a farse. What noncompetitive means is, the captive home market really doesn't have somewhere to consistently park their bums for nonstop destinations. I only have CX/KA to do that.
The ME airlines really upended everyone's business model in the last decade, and CX is no exception. But take North America: CX has virtually zero competition except the crappy US carriers, and Air Canada. That's why I'm fully with the guy above hoping for AA to continue to up it's game. I'm not really optimistic though.
CX has a close to a monopoly as you can get in this day and age regarding slots and gates at HKG. They have killed even the prospect of LCCs having a base at HKG. (The Jetstar fight became public, a few others haven't). Singapore is a good example of a former monopolist losing much of their monopoly, due to the government intervening.. Singapore set out to make SIN an LCC hub and that's what happened. AirAsia and Jetstar were given slots and gates, meanwhile Tigerair and Scoot were pretty much forced down SQ's management's throats. Those who didn't go along with the program were forced out or moved elsewhere in Singapore Inc. At HKG that doesn't happen. Swire + CX have effectively latched onto the crony capitalism train and killed the prospect of an LCC operator at HKG, at least for now.
Agreed HX is growing in strength, but we're a long way off from where HKG can be called "competitive" for any businessman's dollars. Competitive is offering either rock bottom fares to most regional destinations via a LCC, or frequency via a full carrier. Currently HKG has neither. CX has made sure of that. HX flies to Auckland, Gold Cost once in a while, and Vancouver next year. They need about 15 more long-haul destinations, many of them multiple times daily, to even think about competing for the bigger corporate dollars based in HKG. ME carriers cannot reasonably take me to Australia, or the US, or Canada, etc. These represent the majority of CX's high-yielding long-haul seats.
An noncompetitive market doesn't mean you don't have competition on some routes...clearly CX has that, but so does every monopolist usually via bilateral agreements where at least one carrier from each country get to operate. That is the "good old days" and hardly exists anymore in developed countries. Although ironically, CX/KA still have one of these sweetheart deals! Which is just remarkable given how developed HK is, they still have one of these backwards, screw-the-customer deals thanks to the government. It's unreal. You know CX and KA have separate air certificates so they play the charade that HK has "two" separate carriers operating to India, so HX, UO, etc. can't enter the market? The India side is Air India and Jet Airways. HK side is Cathay...and Dragon. This is why Dragonair randomly flies to BLR and CCU when they don't really seem to fit into the network. It's just laughable.
From a competitive standpoint, HK is really a farse. What noncompetitive means is, the captive home market really doesn't have somewhere to consistently park their bums for nonstop destinations. I only have CX/KA to do that.
The ME airlines really upended everyone's business model in the last decade, and CX is no exception. But take North America: CX has virtually zero competition except the crappy US carriers, and Air Canada. That's why I'm fully with the guy above hoping for AA to continue to up it's game. I'm not really optimistic though.
I think we might be saying something similar.
The fact I'm even willing to consider connecting in Japan to the US via JAL is....a problem for CX. Because even though it's on the way, it's still pretty darn inconvenient compared to all the nonstops CX offers (I am picking JAL every time when I can schedule a meeting, however in Tokyo before launching off to the US).
CX is used to being the monopolist and this is the first real bout with competition they're facing. But we're a long way away from saying HKG is "competitive". Another interesting change is the sheer global nature of FF programs these days. A decade ago wasn't quite like this. Travelers are increasingly becoming free agents. The ME carriers have helped with that.
But I still must face reality. I spend most of my "living" time in Hong Kong. I cannot avoid CX. This is how you know they have a stranglehold on the market. I've significantly cut the % of my flights on CX this year - although unfortunately, due to a hectic travel schedule, my $ spend and gross mileage has gone up on CX - but I still cannot get CX/KA much below 60% of my flights. That's really not possible unless I'm grossly going out of my way. CX used to capture 80%+ of my business btw, maybe 90%. So I've actively taken them down. But I can't get it much lower than 50-60% without seriously inconveniencing myself. That's what I mean by "non-competitive". Our options are limited, and it sucks!
The fact I'm even willing to consider connecting in Japan to the US via JAL is....a problem for CX. Because even though it's on the way, it's still pretty darn inconvenient compared to all the nonstops CX offers (I am picking JAL every time when I can schedule a meeting, however in Tokyo before launching off to the US).
CX is used to being the monopolist and this is the first real bout with competition they're facing. But we're a long way away from saying HKG is "competitive"
. Another interesting change is the sheer global nature of FF programs these days. A decade ago wasn't quite like this. Travelers are increasingly becoming free agents. The ME carriers have helped with that.But I still must face reality. I spend most of my "living" time in Hong Kong. I cannot avoid CX. This is how you know they have a stranglehold on the market. I've significantly cut the % of my flights on CX this year - although unfortunately, due to a hectic travel schedule, my $ spend and gross mileage has gone up on CX - but I still cannot get CX/KA much below 60% of my flights. That's really not possible unless I'm grossly going out of my way. CX used to capture 80%+ of my business btw, maybe 90%. So I've actively taken them down. But I can't get it much lower than 50-60% without seriously inconveniencing myself. That's what I mean by "non-competitive". Our options are limited, and it sucks!
https://www.bloomberg.com/news/artic...hind-estimates
So, shall we step back a little bit and modify the definition of 'competition' a little? To me, ME3 definitely upped their game for all ex-HKG to EU and HKG-US routes. Now if we say, HKG-JFK, can we put all the airlines into comparisons and say CX cannot compete against all other carriers? Perhaps not, due to inconvenience factor. However, how inconvenient is inconvenient? To me:
HKG-China(Xiamen, MU, CZ, CA, HU)-US
HKG-TPE-US
HKG-KIX/HND/NRT-US
HKG-ICN-US
are all on the way. If you go to EU, then:
HKG-China-EU
HKG-ME-EU
HKG-All EU Airlines
HKG-BKK/SIN-EU bit backtracking.
To me, anything within five hours difference is negligible. (e.g. HKG-NRT-ORD ANA-18hr, CX-14.5) So you have a corporate that is ok to pay J fares to their employees to go. If they see departure times and arrival times are similar, but with connection it goes down more than 50% of the fares, would they tell the employees to fly connections? Perhaps not, but some may. Finance definitely shows. So, a $3k J fare vs $10k J fare, corporate can pay three more employees and still save $1k USD in J, win-win. Well, J in ME3 to the US is 'grossly out of the way', but within five hours, really?
Dec 19, 2016, 7:26 am
#988
Join Date: Feb 2011
Location: HKG, TXL
Programs: CX DM
Posts: 566
Here?
http://onemileatatime.boardingarea.c...cost-airlines/
http://onemileatatime.boardingarea.c...ckets-insight/
So 0.75cpm (USD)
If that's so - a TPAC F R/T award is roughly US$1,350 (West Coast)-US$1,650 (East Coast)
You can't buy a straight PE for that little money
I doubt CX aims to sell seats to redemption (even if partner)
But it's a useful tool for practising price discrimination in a capacity-constrained airport http://www.flyertalk.com/forum/briti...l#post25916250 - by using miles CX can sell a £3 fare without incurring demand leakage on the £5 and £7 fare and still keep up frequencies.
http://onemileatatime.boardingarea.c...cost-airlines/
http://onemileatatime.boardingarea.c...ckets-insight/
So 0.75cpm (USD)
If that's so - a TPAC F R/T award is roughly US$1,350 (West Coast)-US$1,650 (East Coast)
You can't buy a straight PE for that little money
I doubt CX aims to sell seats to redemption (even if partner)
But it's a useful tool for practising price discrimination in a capacity-constrained airport http://www.flyertalk.com/forum/briti...l#post25916250 - by using miles CX can sell a £3 fare without incurring demand leakage on the £5 and £7 fare and still keep up frequencies.
Its more about how much they value their own programme's miles and I'm pretty sure it wasn't such a low amount. IIRC it was probably a discussion that took place on the FT LH M&M forums.
Dec 19, 2016, 5:19 pm
#989
Join Date: Jan 2006
Programs: AAdvantage Asia Miles Air China
Posts: 870
Yes, CX is able to get away at the moment with charging a premium ex-HK. Only CX has the frequency and breadth of connections out of HKG. Like a python, CX has crushed the life out of the competition or eaten it (Air HK/Dragonair).
Go back 20 years, United and Northwest were bigger to the US, while their successors pale in CX's shadow. QF, JL, MH, BA were all roughly equal with CX in their respective markets. Since then CX has grown dramatically in each of these markets, while the competition with the exception of BA has shrunk in HKG (and even then BA has barely stood still). Is it significant that SQ more than matches CX to Singapore?
In order to maintain all that frequency and breadth to key markets CX cannot rely upon over-charged HKG premium passengers only. CX needs the lower spend outport customers to maintain flow and frequency which in turn protects HKG capacity dominance, providing businessmen with their much vaunted travel flexibility, with the added benefit of keeping the competition both down and out. It is doubtful the day flights to London would be as successful without all the connections CX brings from the region and Australia.
My argument is that to maintain its own dominant position within HKG CX needs the connectors, and should avoid disposing of its PEY/Y elites for little return. If these customers go elsewhere because CX is not offering enough in terms of service, or frequent flyer programme value, it is going to be hard to entice them back.
Replacing existing clients with new clients is no substitute for adding new clients to existing clients.
Passengers who stop connecting in HKG will fly direct or connect elsewhere, adding to the frequency available from competing centres, building them up at CX and HKG's expense.
Former MPC members who switch to other programmes will inevitably fly other carriers more (if CX sees little value in maintaining these as MPC members).
Go back 20 years, United and Northwest were bigger to the US, while their successors pale in CX's shadow. QF, JL, MH, BA were all roughly equal with CX in their respective markets. Since then CX has grown dramatically in each of these markets, while the competition with the exception of BA has shrunk in HKG (and even then BA has barely stood still). Is it significant that SQ more than matches CX to Singapore?
In order to maintain all that frequency and breadth to key markets CX cannot rely upon over-charged HKG premium passengers only. CX needs the lower spend outport customers to maintain flow and frequency which in turn protects HKG capacity dominance, providing businessmen with their much vaunted travel flexibility, with the added benefit of keeping the competition both down and out. It is doubtful the day flights to London would be as successful without all the connections CX brings from the region and Australia.
My argument is that to maintain its own dominant position within HKG CX needs the connectors, and should avoid disposing of its PEY/Y elites for little return. If these customers go elsewhere because CX is not offering enough in terms of service, or frequent flyer programme value, it is going to be hard to entice them back.
Replacing existing clients with new clients is no substitute for adding new clients to existing clients.
Passengers who stop connecting in HKG will fly direct or connect elsewhere, adding to the frequency available from competing centres, building them up at CX and HKG's expense.
Former MPC members who switch to other programmes will inevitably fly other carriers more (if CX sees little value in maintaining these as MPC members).
Last edited by Nicc HK; Dec 19, 2016 at 5:29 pm
Dec 19, 2016, 6:17 pm
#990
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,740
//No, it definitely wasn't that. Also, partner redemptions in theory would just equal out one another (BA redeems on CX, CX redeems on BA).
This argument will never work with CX-AA in the 67.5 AA miles per TPAC CX First era.
//Its more about how much they value their own programme's miles and I'm pretty sure it wasn't such a low amount. IIRC it was probably a discussion that took place on the FT LH M&M forums.
Will be interested to see it if you can remember where it is.
//CX needs the lower spend outport customers to maintain flow and frequency which in turn protects HKG capacity dominance, providing businessmen with their much vaunted travel flexibility, with the added benefit of keeping the competition both down and out.
Run long and thin planes like the A350. I guess maybe 787 has crap cargo capabilities or otherwise CX would've gone for them too. And shaft the third runway cost to HK taxpayers (to be fair, CX is paying for it somewhat by having construction duty imposed on fares)
//My argument is that to maintain its own dominant position within HKG CX needs the connectors, and should avoid disposing of its PEY/Y elites for little return.
Leave the penny-pinching HKG and connecting travellers to UO/HX/ME3/CZ/MU/CA. CX isn't here to serve the value market.
This argument will never work with CX-AA in the 67.5 AA miles per TPAC CX First era.
//Its more about how much they value their own programme's miles and I'm pretty sure it wasn't such a low amount. IIRC it was probably a discussion that took place on the FT LH M&M forums.
Will be interested to see it if you can remember where it is.
//CX needs the lower spend outport customers to maintain flow and frequency which in turn protects HKG capacity dominance, providing businessmen with their much vaunted travel flexibility, with the added benefit of keeping the competition both down and out.
Run long and thin planes like the A350. I guess maybe 787 has crap cargo capabilities or otherwise CX would've gone for them too. And shaft the third runway cost to HK taxpayers (to be fair, CX is paying for it somewhat by having construction duty imposed on fares)
//My argument is that to maintain its own dominant position within HKG CX needs the connectors, and should avoid disposing of its PEY/Y elites for little return.
Leave the penny-pinching HKG and connecting travellers to UO/HX/ME3/CZ/MU/CA. CX isn't here to serve the value market.
Last edited by percysmith; Dec 19, 2016 at 6:22 pm
