Originally Posted by
Gnadenburg
It all seems to be going so distressing bad, it must be deliberate?
I’ve wondered the same, but I don’t think it is deliberate. If CX wants to get smaller (I call this becoming a boutique carrier), they will be handing HKA marketshare without a fight. The third runway and additional gate space will go almost entirely to competitors.
Does CX gain more or less pricing power this way? Competitors can undercut you on price to the point of losing money, and because of their size they survive. Eventually, you get pushed out of the market altogether.
The only way to make the boutique airline model work is to offer a product that no competitor can compete with. Clearly, CX has been going the opposite direction with the product.
Also, even if the profit margin becomes better in a boutique carrier, the airline doesn’t necessarily make more money. A 2% margin now makes the same money as a 4% margin at half the size.
If CX thinks they will get both margin expansion and maintain growth simply by cutting costs, then I want some of what they’re smoking, or snorting.