Originally Posted by
Trafalgar
At best, CX ends up as marginal pimple-arsed airline on the edge of China, pretending they are still a 'contender' in the big fight. The fatal mistake was made in the past 10 years. Once they saw off Oasis, and gobbled up Air Hong Kong, they sat around congratulating themselves and popping champagne corks. Convinced of their superiority, they didn't see the growing threat of HK Airlines, who have now grown to a size that is a direct threat to CX's business model. The other side of that coin is that the slots that HKA occupy are gone forever and have effectively corralled CX into a position that they can't grow themselves out of the mess they are in because the airport is now effectively at max capacity. Meanwhile, the mainland Chinese carriers are doubling every five years. CX is f......... Well done Swire/CX management. Here's to your bonuses
Agreed. And it's been a major cock-up. But there MIGHT be a way out (I don't know how feasible it is and it would take some major finagling). Most of the woes are for high end slots pi$$ed away and HKG at capacity--which might get somewhat better but won't get all that much better (and everything goes through HKG).
Contraction IMHO will be death; unless the plan is pump and dump--in which case it's still death (furthermore, I don't know where they might find a suitable suitor--then again I have no idea what we actually own or where the money really is; it COULD be as simple as selling a beer label and collecting the cash depending on the real asset distributions if it turns out there really isn't anything owned free and clear). You can't shrink your way into prosperity when (if true) the reports look like they do. So it's grow, fold, or sell (assuming there's no HKG version akin to Chapter 11 or a big daddy warbucks with a big bankrolll he doesn't mind blowing).
ONE option--and I don't have any idea how feasible it might be--is to cut the bases loose and man the shiite out of them. Establish them as independent organizations contracting to the parent (not unlike Compass, Envoy, or Republic contracting to American--with jets painted in an American like getup--but using the actual CX jets). The structure is kinda there already with the 'on shoring' process but kinda isn't as a real bona-fide organic (to the country) entity so there'd be some legal hoops to jump through and agreements with the parent corporation (but given how China loves shell corporations this shouldn't be beyond their capabilities). Offer DIRECT flights from these entities (bases) to other places which make real money which DON'T involve going through HKG--using current based crews and jets and rotating them back to home plate in time after they serve other direct destinations (bypassing HKG altogether). The independent organizations on the bases acquire the additional routing slots using CX jets but as organic separate corporations within the host nation (with some form of contract which allows this) and based crews (on an independent contract at the basing location which allows for scheduling by the parent corporation).