CX and oneworld partnership and relationship
Oct 4, 2016, 3:35 pm
#1
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CX and oneworld partnership and relationship
Am I crazy into thinking that CX isn't really that committed to oneworld? Without code sharing, CX hasn't really formed any JV with any of their oneworld partners. I know that their business approach is very conservative compared to their main rival SQ where they've recently started a JV with LH for Singapore-Europe flights but surely, forming a JV with their partner will benefit them? I know that QF and CX relationship hasn't been the friendliest but maybe perhaps, it's time to patch things up.
In oneworld, you have BA-AA-IB-AY for TATL, BA-AY-JL for EU-JPN, AA-QF for TPAC, JL-QF for JPN-AUS(?).
Surely, CX will benefit with a BA-CX JV for UK/EU-HK, JL-CX for HK-JPN, CX-QF for HK-AUS and AA-CX for HK-N.America and perhaps CX-QR-RJ for HK-ME. And also maybe strong codesharing with AB for Germany flights, UL for Indian Ocean flights as well as MH for HK-Malaysia flights where Cathay Dragon could form a strong relationship with them.
I know that CX-QR JV wasn't that successful, but surely it would benefit CX if they deepen their partnership with oneworld considering the state they are in at the moment.
In oneworld, you have BA-AA-IB-AY for TATL, BA-AY-JL for EU-JPN, AA-QF for TPAC, JL-QF for JPN-AUS(?).
Surely, CX will benefit with a BA-CX JV for UK/EU-HK, JL-CX for HK-JPN, CX-QF for HK-AUS and AA-CX for HK-N.America and perhaps CX-QR-RJ for HK-ME. And also maybe strong codesharing with AB for Germany flights, UL for Indian Ocean flights as well as MH for HK-Malaysia flights where Cathay Dragon could form a strong relationship with them.
I know that CX-QR JV wasn't that successful, but surely it would benefit CX if they deepen their partnership with oneworld considering the state they are in at the moment.
Oct 4, 2016, 4:49 pm
#3
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The fundamental concept of Oneworld was to bring partnerships under one banner...
I would go as far to say that other airlines like BA, AA, QF, JL, MH are less committed to Oneworld given their non-alliance partnerships.
I would go as far to say that other airlines like BA, AA, QF, JL, MH are less committed to Oneworld given their non-alliance partnerships.
Oct 4, 2016, 5:50 pm
#4
Join Date: Nov 2014
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CX has non-alliance partnerships as well. CA, in particular, is at the heart of much frustration with CX.
Oct 4, 2016, 6:52 pm
#5
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To the OP, a JV for a set of routes (like transatlantic) is simply legalized collusion. The consumers absolutely lose out via higher prices. I'm not sure what you think this will accomplish for the customers. Transatlantic has some of the highest fares/mile for Y class in particular, and the only reason we have some respite (and recent J deals) is thanks to the LCC alternatives like Norwegian and Wow! whom those very JV partners have and still are lobbying their governments against. You realize that BA is killing food in longhaul Y right, those same flights covered under the JV? There is no proof that legalized collusion leads to consumer benefits. But there is plenty that it leads to far worse-off consumers via less choice overall and higher prices.
Another good example is CX/QR former JV you mention. QR specifically held back their superior planes, apparently at CX's request because the J class hard product on QR's 787s - combined with QRs vastly superior catering - would've meant it wasn't a fair distribution of ticket demand, in favor of QR. At least with QR dispatching a332s with their old J hard product, CX stood a chance. Within a month (!!) Of the JV dissolution, QR dispatched its 787s on the route. Now QR has taken over both flights daily, and made them 787. JV dissolution = consumer win. Oh, and prices have dropped too!
In another thread you say CX has "lost the plot" with 10 abreast. But these things are all related. CX really has blown it in soft services IMO. But we consumers have also benefited from CX's overall far lower longhaul Y fares, as well as an absolutely insane capacity expansion the last decade as the 77Ws arrived. I'm just saying all these things are related and it's not fair to review one without taking others into account. 10 abreast is going to mean lower fares - we have already seen CX going this way for 2-3 years - and also subsidizes capacity growth to secondary cities, places like MAN, BOS, rumored TLV, DUS, etc where you don't have the same consistently high yielding demand like a JFK, LHR or LAX, but your entire route network benefits by servicing the port and it can be done profitably.
I think CX has lost the plot elsewhere (I've either posted here or elsewhere about regional Y and J pricing, ex-HKG pricing, horrible regional J product and declining premium standards), but not in the 10 abreast. The world's two largest 77W operators - EK and CX - now both will fly 10 abreast. Something like 70pct of global 77W capacity will be configured this way. It was a matter of time if CX didn't want to stay a niche HK airline, but instead be a global competitor with HK as a hub to Asia. Which is where they're going.
Anyway, it will definitely be a loss for us if CX has a JV. And i will add: CX has kinda done something like this indirectly, by successfully lobbying their chummy friends in the HK govt to keep LCCs out of HKIA. Today HKG stands in contrast to Singapore, whose govt-owned flag carrier has been the main loser as Tigerair/Scott/Jetstar have grown there, and other regional LCCs like AirAsia have been welcomed with open arms. Instead in HK, the govt and CX successfully did some major verbal arm twisting, mental gymnastics and downright hypocrisy in getting an attempted LLC squashed before it got off the ground. The arguments read like a Saturday Night Live skit .....CX, an ultimately British company at its core arguing that the local HK lady and her mainland backers weren't "local" in HK, as grounds for killing it....except their argument was successful. Crony capitalism was at the heart of that deal just like it is at the heart of the transatlantic JVs. The consumer doesn't win in either case.
Another good example is CX/QR former JV you mention. QR specifically held back their superior planes, apparently at CX's request because the J class hard product on QR's 787s - combined with QRs vastly superior catering - would've meant it wasn't a fair distribution of ticket demand, in favor of QR. At least with QR dispatching a332s with their old J hard product, CX stood a chance. Within a month (!!) Of the JV dissolution, QR dispatched its 787s on the route. Now QR has taken over both flights daily, and made them 787. JV dissolution = consumer win. Oh, and prices have dropped too!
In another thread you say CX has "lost the plot" with 10 abreast. But these things are all related. CX really has blown it in soft services IMO. But we consumers have also benefited from CX's overall far lower longhaul Y fares, as well as an absolutely insane capacity expansion the last decade as the 77Ws arrived. I'm just saying all these things are related and it's not fair to review one without taking others into account. 10 abreast is going to mean lower fares - we have already seen CX going this way for 2-3 years - and also subsidizes capacity growth to secondary cities, places like MAN, BOS, rumored TLV, DUS, etc where you don't have the same consistently high yielding demand like a JFK, LHR or LAX, but your entire route network benefits by servicing the port and it can be done profitably.
I think CX has lost the plot elsewhere (I've either posted here or elsewhere about regional Y and J pricing, ex-HKG pricing, horrible regional J product and declining premium standards), but not in the 10 abreast. The world's two largest 77W operators - EK and CX - now both will fly 10 abreast. Something like 70pct of global 77W capacity will be configured this way. It was a matter of time if CX didn't want to stay a niche HK airline, but instead be a global competitor with HK as a hub to Asia. Which is where they're going.
Anyway, it will definitely be a loss for us if CX has a JV. And i will add: CX has kinda done something like this indirectly, by successfully lobbying their chummy friends in the HK govt to keep LCCs out of HKIA. Today HKG stands in contrast to Singapore, whose govt-owned flag carrier has been the main loser as Tigerair/Scott/Jetstar have grown there, and other regional LCCs like AirAsia have been welcomed with open arms. Instead in HK, the govt and CX successfully did some major verbal arm twisting, mental gymnastics and downright hypocrisy in getting an attempted LLC squashed before it got off the ground. The arguments read like a Saturday Night Live skit .....CX, an ultimately British company at its core arguing that the local HK lady and her mainland backers weren't "local" in HK, as grounds for killing it....except their argument was successful. Crony capitalism was at the heart of that deal just like it is at the heart of the transatlantic JVs. The consumer doesn't win in either case.
Last edited by QRC3288; Oct 4, 2016 at 6:59 pm
Oct 4, 2016, 7:38 pm
#6
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Anyway, it will definitely be a loss for us if CX has a JV. And i will add: CX has kinda done something like this indirectly, by successfully lobbying their chummy friends in the HK govt to keep LCCs out of HKIA. Today HKG stands in contrast to Singapore, whose govt-owned flag carrier has been the main loser as Tigerair/Scott/Jetstar have grown there, and other regional LCCs like AirAsia have been welcomed with open arms. Instead in HK, the govt and CX successfully did some major verbal arm twisting, mental gymnastics and downright hypocrisy in getting an attempted LLC squashed before it got off the ground. The arguments read like a Saturday Night Live skit .....CX, an ultimately British company at its core arguing that the local HK lady and her mainland backers weren't "local" in HK, as grounds for killing it....except their argument was successful. Crony capitalism was at the heart of that deal just like it is at the heart of the transatlantic JVs. The consumer doesn't win in either case.
I remember reading some analysis on OW regarding how they would be very interested to add a carrier on the mainland but will/have received push back from CX. You've got both China Eastern (if I remember correct, the article stated they were pretty dissatisfied with their current alliance) and Southern in the Sky Miles alliance and CA with *A. Hainan was the third airline mentioned as an option.
Oct 4, 2016, 7:49 pm
#7
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At one point, SQ claimed that it was distancing itself away from carriers with far inferior service. Whether true or not, I could see why SQ would.
Cathay's service has declined steeply and before we know it, it will be in the exact same league as US carriers - over-priced lousy service (mind you, some of the US carriers like AA and DL are stepping up their game on select international services.)
Cathay's service has declined steeply and before we know it, it will be in the exact same league as US carriers - over-priced lousy service (mind you, some of the US carriers like AA and DL are stepping up their game on select international services.)
Oct 4, 2016, 8:22 pm
#8
Join Date: Oct 2016
Posts: 291
At one point, SQ claimed that it was distancing itself away from carriers with far inferior service. Whether true or not, I could see why SQ would.
Cathay's service has declined steeply and before we know it, it will be in the exact same league as US carriers - over-priced lousy service (mind you, some of the US carriers like AA and DL are stepping up their game on select international services.)
Cathay's service has declined steeply and before we know it, it will be in the exact same league as US carriers - over-priced lousy service (mind you, some of the US carriers like AA and DL are stepping up their game on select international services.)
SQ service is deteriorating but not as significant as CX.
Let's see what will happen. I think the age of "premier airline" is gone!
Oct 4, 2016, 8:32 pm
#9
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CX's current problem is mgmt is clueless as to what their airline is and what direction they're heading. This is a big period of change for CX...they're moving out from being a HK airline to a global mega airline with HK as the hub. It doesn't help that management is not the best and they've mismanaged a few things. Routine fuel speculation losses don't help because when there's a hole to plug like that someone loses out - there's no free lunch. If CX weren't in HK, you'd have a great scenario for an activist to come in and shake up the whole business and roll some heads.
CX's ideal scenario is to turn into a ME type airline. It's possible - CX is geographically blessed between China and SE Asia, with ideal connections from both Europe and North America. Geographic positioning with a sole-hub operation is key for that model to work. CX has both.
But CX will need to invest heavily in premium up front, and win in Y class on price, to ensure stable loads (no matter what people say, Y class on EK and QR does not look fun...IMO). Right now, CX is charging the ex-HKG crew an arm and a leg for regional Y, but cut services in-line with its rock-bottom long-haul transit Y fares. Meanwhile CX is moving towards the ME-style cheaper J fares, particularly at outports, but still expecting us in HKG to pay for the regional J...which is a joke. They are struggling to balance the heavy increase in transit passengers (and the competitive fares required) with the extremely high-yielding local HK market. Increasing transit pax, in turn, are a result of massive capacity additions.
FWIW, I think adding capacity is the right thing....they can't exist as a niche HK-specific airline in the future, IMO. The market is too competitive and eventually some regional competitor will swoop in and start offering great rates.
Anyway, I really don't think CX will ever end up like the US carriers. No matter how mismanaged they are. CX is a quasi-national asset in Hong Kong. Unfortunately, because of HK's special political status and CX's colonial legacy, CX will never get the full state support it needs like the ME carriers backing EK, QR, etc. Instead, CX exists in this weird place between free market business and "crony capitalism" as I call it. It is de facto seen as HK's carrier, they get shameless political support via HKIA, but it's still a private business. It's not a perfect situation. But I think they'll absorb some of these capacity increases and eventually figure it out. Firing Ivan Chu would be a nice start.
Oct 4, 2016, 10:08 pm
#10
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BA, AA, QF, JL and MH? Really? I've always thought that oneworld allowed flexibility meaning that they are allowed to form partnership outside their alliance partnerships. I've always thought that BA, AA, QF and JL are loyal to oneworld. It wouldn't surprise me if MH decides to leave oneworld given their recent extensive European codeshareing partnership with Emirates. They could've partnered with QR with a far more superior product than EK.
Oct 4, 2016, 10:13 pm
#11
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To the OP, a JV for a set of routes (like transatlantic) is simply legalized collusion. The consumers absolutely lose out via higher prices. I'm not sure what you think this will accomplish for the customers. Transatlantic has some of the highest fares/mile for Y class in particular, and the only reason we have some respite (and recent J deals) is thanks to the LCC alternatives like Norwegian and Wow! whom those very JV partners have and still are lobbying their governments against. You realize that BA is killing food in longhaul Y right, those same flights covered under the JV? There is no proof that legalized collusion leads to consumer benefits. But there is plenty that it leads to far worse-off consumers via less choice overall and higher prices.
Another good example is CX/QR former JV you mention. QR specifically held back their superior planes, apparently at CX's request because the J class hard product on QR's 787s - combined with QRs vastly superior catering - would've meant it wasn't a fair distribution of ticket demand, in favor of QR. At least with QR dispatching a332s with their old J hard product, CX stood a chance. Within a month (!!) Of the JV dissolution, QR dispatched its 787s on the route. Now QR has taken over both flights daily, and made them 787. JV dissolution = consumer win. Oh, and prices have dropped too!
In another thread you say CX has "lost the plot" with 10 abreast. But these things are all related. CX really has blown it in soft services IMO. But we consumers have also benefited from CX's overall far lower longhaul Y fares, as well as an absolutely insane capacity expansion the last decade as the 77Ws arrived. I'm just saying all these things are related and it's not fair to review one without taking others into account. 10 abreast is going to mean lower fares - we have already seen CX going this way for 2-3 years - and also subsidizes capacity growth to secondary cities, places like MAN, BOS, rumored TLV, DUS, etc where you don't have the same consistently high yielding demand like a JFK, LHR or LAX, but your entire route network benefits by servicing the port and it can be done profitably.
I think CX has lost the plot elsewhere (I've either posted here or elsewhere about regional Y and J pricing, ex-HKG pricing, horrible regional J product and declining premium standards), but not in the 10 abreast. The world's two largest 77W operators - EK and CX - now both will fly 10 abreast. Something like 70pct of global 77W capacity will be configured this way. It was a matter of time if CX didn't want to stay a niche HK airline, but instead be a global competitor with HK as a hub to Asia. Which is where they're going.
Anyway, it will definitely be a loss for us if CX has a JV. And i will add: CX has kinda done something like this indirectly, by successfully lobbying their chummy friends in the HK govt to keep LCCs out of HKIA. Today HKG stands in contrast to Singapore, whose govt-owned flag carrier has been the main loser as Tigerair/Scott/Jetstar have grown there, and other regional LCCs like AirAsia have been welcomed with open arms. Instead in HK, the govt and CX successfully did some major verbal arm twisting, mental gymnastics and downright hypocrisy in getting an attempted LLC squashed before it got off the ground. The arguments read like a Saturday Night Live skit .....CX, an ultimately British company at its core arguing that the local HK lady and her mainland backers weren't "local" in HK, as grounds for killing it....except their argument was successful. Crony capitalism was at the heart of that deal just like it is at the heart of the transatlantic JVs. The consumer doesn't win in either case.
Another good example is CX/QR former JV you mention. QR specifically held back their superior planes, apparently at CX's request because the J class hard product on QR's 787s - combined with QRs vastly superior catering - would've meant it wasn't a fair distribution of ticket demand, in favor of QR. At least with QR dispatching a332s with their old J hard product, CX stood a chance. Within a month (!!) Of the JV dissolution, QR dispatched its 787s on the route. Now QR has taken over both flights daily, and made them 787. JV dissolution = consumer win. Oh, and prices have dropped too!
In another thread you say CX has "lost the plot" with 10 abreast. But these things are all related. CX really has blown it in soft services IMO. But we consumers have also benefited from CX's overall far lower longhaul Y fares, as well as an absolutely insane capacity expansion the last decade as the 77Ws arrived. I'm just saying all these things are related and it's not fair to review one without taking others into account. 10 abreast is going to mean lower fares - we have already seen CX going this way for 2-3 years - and also subsidizes capacity growth to secondary cities, places like MAN, BOS, rumored TLV, DUS, etc where you don't have the same consistently high yielding demand like a JFK, LHR or LAX, but your entire route network benefits by servicing the port and it can be done profitably.
I think CX has lost the plot elsewhere (I've either posted here or elsewhere about regional Y and J pricing, ex-HKG pricing, horrible regional J product and declining premium standards), but not in the 10 abreast. The world's two largest 77W operators - EK and CX - now both will fly 10 abreast. Something like 70pct of global 77W capacity will be configured this way. It was a matter of time if CX didn't want to stay a niche HK airline, but instead be a global competitor with HK as a hub to Asia. Which is where they're going.
Anyway, it will definitely be a loss for us if CX has a JV. And i will add: CX has kinda done something like this indirectly, by successfully lobbying their chummy friends in the HK govt to keep LCCs out of HKIA. Today HKG stands in contrast to Singapore, whose govt-owned flag carrier has been the main loser as Tigerair/Scott/Jetstar have grown there, and other regional LCCs like AirAsia have been welcomed with open arms. Instead in HK, the govt and CX successfully did some major verbal arm twisting, mental gymnastics and downright hypocrisy in getting an attempted LLC squashed before it got off the ground. The arguments read like a Saturday Night Live skit .....CX, an ultimately British company at its core arguing that the local HK lady and her mainland backers weren't "local" in HK, as grounds for killing it....except their argument was successful. Crony capitalism was at the heart of that deal just like it is at the heart of the transatlantic JVs. The consumer doesn't win in either case.
besides, it'd be good to give flying BA a rest lol. I guess SQ is at a disadvantage given SIN's geographical location. Maybe CX needs a management reshuffle and to bring back CX in its glory days i.e Tony Tyler management.
Oct 4, 2016, 11:22 pm
#12
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Isn't Cathay already practically controlled by Air China (aka the Chinese government) and they decide on alliances etc. in last instance?
http://centreforaviation.com/news/ca...s-stakes-19003
http://centreforaviation.com/news/ca...s-stakes-19003
Oct 4, 2016, 11:41 pm
#13
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BA, AA, QF, JL and MH? Really? I've always thought that oneworld allowed flexibility meaning that they are allowed to form partnership outside their alliance partnerships. I've always thought that BA, AA, QF and JL are loyal to oneworld. It wouldn't surprise me if MH decides to leave oneworld given their recent extensive European codeshareing partnership with Emirates. They could've partnered with QR with a far more superior product than EK.
Very good point. And yeah, BA is killing Y catering on some long haul flights which I'm not very happy but I guess there are other alternatives flying out of LHR to N.America (AA-IB-AY). IB's long haul service is improving and somewhat better than BA now imo. If it means connecting through MAD or HEL for better Y catering to N.America then I would be happy to besides, it'd be good to give flying BA a rest lol.
I guess SQ is at a disadvantage given SIN's geographical location. Maybe CX needs a management reshuffle and to bring back CX in its glory days i.e Tony Tyler management.
besides, it'd be good to give flying BA a rest lol. I guess SQ is at a disadvantage given SIN's geographical location. Maybe CX needs a management reshuffle and to bring back CX in its glory days i.e Tony Tyler management.
Oct 5, 2016, 12:03 am
#14
Join Date: Oct 2016
Posts: 291
Isn't Cathay already practically controlled by Air China (aka the Chinese government) and they decide on alliances etc. in last instance?
http://centreforaviation.com/news/ca...s-stakes-19003
http://centreforaviation.com/news/ca...s-stakes-19003
If Cathay is controlled by Air China, the cost -cutting pressure may be less.
Oct 5, 2016, 12:15 am
#15
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