CX Possible Acquisition - HK Express
#46
Join Date: Nov 2017
Programs: MPC-DM, Enrich-Plat
Posts: 1,310
This can be overcome somehow by a sensitive pricing mechanism if the LCC flight is operated under CX group? If you need security for an onward flight, you will pay a premium for that. If you need to, say, accumulate Club Points, pay some extra for a higher fare class. If you don’t need these, pay less. This is the principle of an LCC, but items can be with more flexibility if it comes under an airline group. Although it’s not directly comparable, the deal between Emirates and flydubai is somehow like this ensuring connectivity as far as I understand.
LCC's are LCC's because they omit all these extra bells and whistles. And those limited bells and whistles available are unavoidable, though highly standardized, where the costs roughly do go linear with the scale of use.
Let alone the obligations around IROPS. The airline needs an organization to be able to work instantly on these things. CX/KA do have this, LCC's don't.
#47
Suspended
Join Date: May 2006
Location: HKG
Programs: A3, TK *G; JL JGC; SPG,Hilton Gold
Posts: 9,952
i agree cx food is cr@p long haul or short, and i’ve learnt to “enjoy” lounge food over plane food (thats why i do some runs to get to OWE year after year). the worse part is that cx y food on lh is equally bad as short haul, whilst airlines like ba and jl has better food in long haul.
also, somehow crew on other airline somehow manage to work on more things than cx’ and dont complain as hard.
Last edited by kaka; Mar 7, 2019 at 12:19 pm
#48
Join Date: Jan 2014
Programs: CX Diamond, United MileagePlus Gold, Accor Platinum
Posts: 90
LCC is not only about "pay for what you use", but also a smart balance to leave out everything you not really need to operate an airline. The moment you start to build in these "specialties", you need a back office to handle these things at both the organizational level as well as the practical implementation itself. And, don't forget, for each "function", you'll need around 3 employees to fulfill the role 24/7, year round. That'll give a huge cost increase. When these things are "outsourced" to CX/KA, it still adds the corresponding costs, consider an LCC having to live with the expensive daily choices of a major airline, pffffff.
LCC's are LCC's because they omit all these extra bells and whistles. And those limited bells and whistles available are unavoidable, though highly standardized, where the costs roughly do go linear with the scale of use.
Let alone the obligations around IROPS. The airline needs an organization to be able to work instantly on these things. CX/KA do have this, LCC's don't.
LCC's are LCC's because they omit all these extra bells and whistles. And those limited bells and whistles available are unavoidable, though highly standardized, where the costs roughly do go linear with the scale of use.
Let alone the obligations around IROPS. The airline needs an organization to be able to work instantly on these things. CX/KA do have this, LCC's don't.
#49
Join Date: Nov 2017
Programs: MPC-DM, Enrich-Plat
Posts: 1,310
Your views are respected, but I trust there’re ways to get around these issues. Some popular routes can be served both by CX and (its) LCC, balancing connectivity given the more slots they have. I don’t see why SQ/Silk Air/Scoot and Emirates/flydubai can do this but CX cannot. More choices for different passengers.
Regarding Scoot, did you ever check out the limitations, when connecting with SQ ? You get common check-in on single tickets, luggage check-through on a kind of code-share (though pay for the luggage), and in case of IROPS a rebooking. Further, free food stamps (so not a guaranteed meal !), a free blanket and free seat selection. That's it.
You won't get these advantages on non-single tickets bookings, so you can assume, your Scoot leg is more expensive, when combined with an SQ ticket,
Would this work out positive ? Sure, but your ticket price is (probably significantly) higher than the normal Scoot LCC point-to-point pricing and the service level at Scoot would be disappointing when compared to the main airline, especially for elites....... It's more an operation that SQ does buy you a seat with goodies on a Scoot airplane at elevated pricing and organizes some things, Scoot doesn't normally offer.
Because Scoot seems to be a successful operation, your bad luck chances to encounter the normal LCC issues is low.
Can CX do something similar: Sure, why not, as long as the LCC operations are not "integrated" in the CX/KA operations.
See:
https://www.singaporeair.com/en_UK/u...irlines/scoot/
#50
Join Date: Dec 2001
Location: China
Posts: 1,552
So the consensus (and I agree) is that this would be a good idea.
Many routes (anything under 2-3 hours) where I just don't want or need the frills of a KA or CX. By CX buying UO, they can copy SQ/ LH/ QF and rationalise routes around product - though there will be some markets where having both makes sense (CX/KA for connection flights, UO for local traffic). Win/ win for everybody (unless CX buys UO just to strangle it) Accor have been doing this for years (sofitel & ibis owned by same group)
Many routes (anything under 2-3 hours) where I just don't want or need the frills of a KA or CX. By CX buying UO, they can copy SQ/ LH/ QF and rationalise routes around product - though there will be some markets where having both makes sense (CX/KA for connection flights, UO for local traffic). Win/ win for everybody (unless CX buys UO just to strangle it) Accor have been doing this for years (sofitel & ibis owned by same group)
#51
Join Date: Jan 2014
Programs: CX Diamond, United MileagePlus Gold, Accor Platinum
Posts: 90
Would this work out positive ? Sure, but your ticket price is (probably significantly) higher than the normal Scoot LCC point-to-point pricing and the service level at Scoot would be disappointing when compared to the main airline, especially for elites....... It's more an operation that SQ does buy you a seat with goodies on a Scoot airplane at elevated pricing and organizes some things, Scoot doesn't normally offer.
Because Scoot seems to be a successful operation, your bad luck chances to encounter the normal LCC issues is low.
Because Scoot seems to be a successful operation, your bad luck chances to encounter the normal LCC issues is low.
Our difference is only from the perspectives of elites (DM, DM+ or elites from partners) and 'non-elites' (GO or below). As mentioned, for top elites, of course there're differences. For me as GO travelling short-hauls from HK, KA service in Y now is marginally nothing better than UO, let alone the cost difference.
#52
FlyerTalk Evangelist
Join Date: Dec 2004
Programs: CX Green, QF Platinum, BAEC Silver, Hyatt Glob
Posts: 10,780
Okay let’s get back on to the topic of the potential HK Express acquisition.
sxc
Cathay Pacific Moderator
sxc
Cathay Pacific Moderator
#53
Join Date: Feb 2013
Posts: 27
Could be good news if they target them to leisure routes and raise the operating and safety standards
Might be best to just absorb them into KA rather than trying to sort out their messes in management and flight ops.
Effectively keep the slots and the aircraft leases and the brand but ditch everything else...
Might be best to just absorb them into KA rather than trying to sort out their messes in management and flight ops.
Effectively keep the slots and the aircraft leases and the brand but ditch everything else...
#54
Join Date: Dec 2008
Location: Hong Kong
Programs: CX DM
Posts: 1,140
Could be good news if they target them to leisure routes and raise the operating and safety standards
Might be best to just absorb them into KA rather than trying to sort out their messes in management and flight ops.
Effectively keep the slots and the aircraft leases and the brand but ditch everything else...
Might be best to just absorb them into KA rather than trying to sort out their messes in management and flight ops.
Effectively keep the slots and the aircraft leases and the brand but ditch everything else...
#55
Join Date: Jan 2011
Location: HKG • Ex SFO, NYC
Programs: UA 1K, AA EXP; Marriott Amb; Hyatt Globalist; Shangri-la Diamond; IHG SpireAmb; Hilton D; Accor G
Posts: 3,319
I think it's more likely to be the other way round. Inject KA's "leisure heavy" flights into UO, leave the "connection heavy" ones at KA so that there is seamlessness CX. That way Cathay lowers its overall cost base for the low yield flights in its network without hurting their brand beyond where they are.
#56
Join Date: Jan 2014
Programs: CX Diamond, United MileagePlus Gold, Accor Platinum
Posts: 90
But I think given there are more slots available in case of merger, there will be more flexible rather than a simply yes or no.
Last edited by Jackolee; Mar 9, 2019 at 10:51 pm
#57
Join Date: Jan 2017
Programs: Cathay Pacific, Air Astana
Posts: 102
Well, from CX's perspective they saw out the challenge from O8 and managed to resist JetStar coming in.
Of course, re-acquired KA also.
I don't think CX has much of a choice, other than to seek to prevent someone else buying UO (and in due course HX?), in order to keep a hold on AOC's
I'd agree that should the acquisition go ahead, there'd be a shuffling of KA & UO metal, between leisure-heavy and business-connection routes, though not sure how much scope for change there actually is? Also when bearing in mind that there could be some price-focussed competition from the other end of some of those services.
On the other hand, what MIGHT happen would be for UO to concentrate on the "race to the bottom", whilst KA & CX refocus on being premium carriers. (Not sure how likely this would be though - more probably just wishful thinking)
Of course, re-acquired KA also.
I don't think CX has much of a choice, other than to seek to prevent someone else buying UO (and in due course HX?), in order to keep a hold on AOC's
I'd agree that should the acquisition go ahead, there'd be a shuffling of KA & UO metal, between leisure-heavy and business-connection routes, though not sure how much scope for change there actually is? Also when bearing in mind that there could be some price-focussed competition from the other end of some of those services.
On the other hand, what MIGHT happen would be for UO to concentrate on the "race to the bottom", whilst KA & CX refocus on being premium carriers. (Not sure how likely this would be though - more probably just wishful thinking)
#59
Join Date: Jan 2019
Location: Hong Kong
Programs: CX Marco Polo, Fortune Wings Club
Posts: 5
seems this is a final puzzle for CX group.
#60
Join Date: Aug 2018
Programs: CXDM
Posts: 37
Cathay agrees deal to take over HK express....
Here we go...