moondog

There a number of PKX threads on FT now, so I'm uncertain of which ones I've posted to, but allow me to explain my view on the situation:
-CZ can easily move airplanes from CAN/WUH/URC in order to dominate PKX in a major way
-AA and BA want this because it will finally give them a way to actually serve 2nd and 3rd tier cities in China; CX/KA wants to play this role, but we all know that they don't play it very well
-BUT, CZ isn't going to seriously ramp up PKX until people get used to PKX
-we've all read about how great PKX --including ground transportation-- is, but these are still largely untested waters
-my personal prediction is that PKX (and CZ) will be a HUGE success within the course of the next 5 years
-I can't foresee CZ ever joining OW
*they are unwanted by CX (this is an understatement)
*they are the largest airline in China
*they have 40% of the slots at the (soon to be) largest airport in China
*strong partnerships AA, BA, AY, and QF
*why would they pay alliance dues when one of the founding members of the alliance despises them?
*I honestly believe that there is a good chance that CZ will be the largest airline in the world fairly soon IFF PKX catches on
*we think of them as a Guangzhou airline, and Guangzhou works fine for Europe-SE Asia and Europe-Australia. Beijing is a MUCH more value asset than Guangzhou

In closing, if people end up preferring (or at least being impartial) PKX v PEK, this ship will sail. That having been said, CZ is not going to blanket Asia with PKX flights until it gets some some data on the viability of PKX. I firmly believe that their plan (including the JVs) will work in due course, but let's not expect flights to places like Changsha until the airport itself gets traction.

lsquare

I do hope you're wrong and that CZ will ultimately join OW. I hope DL and CZ can strengthen their partnership even more in the future considering they're both going to be flying in and out of PKX.

moondog

In one of the other threads on this topic, I was accused of lacking current knowledge about CX's China aspirations, and I admitted that I'm not 100% up to speed on this matter. That having been said, I don't believe that CZ will join OneWorld anytime soon:
-CX is OW's gateway to China, and they seem to like this position
-CZ offers very low J fares on routes like HKG-JFK (via CAN, mind you), and might be somewhat constrained if it was a OW member
-CZ is a much bigger airline than CX

IMO, CX's split alliance strategy is smart. While they are surely perturbed by CZ ties with AA and BA, this shouldn't affect their strategic vision.

lsquare

Yes and that's why I want CZ to join OW so that I can credit CZ flights to either BA/AA's program. If I'm buying my airfares, I rather buy CZ/MU simply cuz if the price. It's more than good enough. If I'm redeeming my points, I'll do it for CX.

moondog

I fail to see why OW membership would impact this.

lsquare

Unless things have changed, CZ flights don't count for anything with AA's elite program. If it was an OW member, things will most likely change. You only earn RDM when crediting CZ flights to AA.

moondog

AA has control over its FFP, and I'm guessing that EQM for CZ flights will happen at some point during 2020, possibly around the same time AA moves from PEK to PKX (no announcement on this yet)

lsquare

Fair enough, but unless I'm mistaken, CZ flights doesn't accrue tier points for BA's program either? The sooner this change, the better.

moondog

I'm actually somewhat surprised that EQM hasn't been implemented yet in both cases, though the BA partnership is quite new, and I'm not sure if BA actually invested in CZ (I'm guessing this has been covered in the recent articles/discussions on the topic).

FlyerTalker688786

One of the Oneworld's rule dictate that member airlines can only give EQM if the carrier/marketing carrier is another OW airline, the only exception is if the carrier/marketing carrier is a wholly owned subsidiary like QF/JL with Jetstar. Or, the extreme case like Qantas and Emirates where exception apply.

BA's earning chart gives the detailed illustration on which case one can earn EQP/EQS/EQF...

Even if you purchase a CZ operated BA coded flight, it would only benefits BA Executive Club members to earn the elite qualifying points, but not for any other oneworld flyers. If you bought the flight operated by CZ in CZ code, you will not get any EQP, but you might get award miles according to BA Executive Club rules, which needs to be updated soon.

So, as long as CZ is an independent carrier, oneworld flyer would not benefit from its relationship with AA and BA, if one is to doing the elite member qualification trips. Remember, any CZ operated domestic flights, one can not buy it in BA or AA code unless it is a connecting flight to BA or AA codes intercontinental flight. If CZ truly want to tap into the vast oneworld elite frequent flyer pool, it needs to join oneworld, or lobby AA and BA to change the current oneworld rule (which would mean the death of the alliance) or do a QF with its exceptionalism.

moondog

Thanks for your detailed explanation. I had a hunch that there might be some Oneworld rule preventing AA from offering EQM for CZ flights. It will be interesting to see if they push for a creative workaround to this if/when the CZ partnership starts to benefit AA and its passengers in a meaningful manner.

lsquare

I agree and I think there will ultimately needs to be a solution. If you're trying to qualify for status, it would be tough to give up the potential EQM that you would get from flying an OW carrier vs flying on CZ even if it's a heavily discounted fare.

coolfish1103

CZ doesn't even fly CAN-HKG now so I don't know how can they offer very low J fares via CAN. They haven't served on this route for years. There are only 2 flights a day on the HKG-CAN route and it's being serviced by Cathay Dragon. CZ would be competing against CX/KA on the transit traffic via CAN and that would be the reason why CX/KA would not be happy if CZ entered oneworld.

USA-CAN/HKG-SEA/AUS/NZL
EUR-CAN/HKG-SEA/AUS/NZL

According to HKIA the only daily flight that's being offered to Hong Kong is Beijing. There is a Meixian flight here and there and a Shenyang flight that is cancelled.

lsquare

Oh that's really interesting. Are HKG-CAN flights even that important since you said there are two daily flights? I mean, given the bullet train connection between HKG and CAN, I'm not even sure why this is such a big deal? Perhaps CZ and CX can work something out if this is such a big deal? Is a CZ-CX JV even feasible?

coolfish1103

Bus or ferry is probably easier. However, most ferry only goes to Shenzhen and Dongguan area, very few goes all the way beyond Nansha (and that's not even close to Guangzhou city centre).

The bullet train isn't really convenient for anyone who wants to use CAN or HKG as a transit point as you need to first transit at Kowloon West/Guangzhou South and then change to the Airport Express/2nd Line. For people living in Guangzhou to use HKG as a transit, they need to take the metro to Guangzhou South first and then take the bullet train to Kowloon West and transfer to Airport Express. An easier way would be to take the train from Guangzhou East and head directly to Hung Hom, but you will still need to make a transfer to Airport Express (via Austin/Kowloon).

The other way is even worse as you need to get to Guangzhou East or Guangzhou South via the train at Hung Hom or Kowloon West, and then take the 3rd line (2nd line and transfer to 3rd line if using Guangzhou South). Why did I say it's even worse? If you use Guangzhou South it's a big detour and if you use Guangzhou East good luck getting on the train with bags as the 3rd line is almost always packed.

The problem is never the transit passengers between CAN-HKG, it's the beyond transit passengers utilizing CAN or HKG to head to their destinations. Since CX/CZ hubs are so close to each other, if oneworld has both CZ and CX as the options to transit, many passengers that use CX now may head to CZ as CZ almost always have cheaper fares for transit passengers. I don't see any way the two airlines can work together (especially when one is heavily subsidized).

CAN-HKG use to be a route served with multiple daily flights thanks to no direct flight between Taiwan and China. Since cross strait flight commenced in 2008, the number of daily flights have dwindled to the point where China Southern completely axed the route. Cathay Dragon use to have 4 daily flights and now down to just two to serve connections (one in the morning and one in the evening). I believe CZ use to have around 4 daily flights as well (now none).

The other market I didn't mention is USA/EUR/AUS/NZL/SEA-CAN/HKG/PKX-CHINA DOMESTIC. If CZ joins oneworld I find KA having hard time to survive on those China routes with both CAN and PKX capturing all the domestic market.