How long before a CX LCC?
Join Date: Oct 2006
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as you might notice that,low cost airline is not really low cost but just those NOT low cost their fare is high instead.
why CX only?
during non-peak seasons,many non-lcc offer good packages.
during peak season,what are the difference between lcc and non-lcc.
so-called lcc!
why CX only?
during non-peak seasons,many non-lcc offer good packages.
during peak season,what are the difference between lcc and non-lcc.
so-called lcc!
Join Date: Oct 2006
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Costs of running an airline
Route operating costs
staff
fuel
maintenance
depreciation/operating leases
other niff naff
OK, what is variable between say CX and Oasis? Presumably, CX can get a better deal on planes due to order sizes so depreciation/operating leases should be cheaper for CX. Maintenance...same same with HAECO. Fuel, maybe the same, maybe slightly cheaper in HKG for CX due order size. Route operating costs...same for both since we do the same route and destination.
That leaves staff. I hear they pay around 100K for a CN. Plus another 24K for housing. Brand new B scale CN gets 98 plus housing of up to 80ish so we cost more. BUT, at the moment, CX pilots fly more hours than they do, so per hour, we are more cost effective.
So if CX started a LCC and people worked for free, the fares would be approx 20% lower than they are now. The rest of the costs would be the same. The savings that companys like Southwest make is by flying to secondary airports and thus lower their route operating costs.(Inflt catering is only a small % of total costs so I didnt bother including it)
Route operating costs
staff
fuel
maintenance
depreciation/operating leases
other niff naff
OK, what is variable between say CX and Oasis? Presumably, CX can get a better deal on planes due to order sizes so depreciation/operating leases should be cheaper for CX. Maintenance...same same with HAECO. Fuel, maybe the same, maybe slightly cheaper in HKG for CX due order size. Route operating costs...same for both since we do the same route and destination.
That leaves staff. I hear they pay around 100K for a CN. Plus another 24K for housing. Brand new B scale CN gets 98 plus housing of up to 80ish so we cost more. BUT, at the moment, CX pilots fly more hours than they do, so per hour, we are more cost effective.
So if CX started a LCC and people worked for free, the fares would be approx 20% lower than they are now. The rest of the costs would be the same. The savings that companys like Southwest make is by flying to secondary airports and thus lower their route operating costs.(Inflt catering is only a small % of total costs so I didnt bother including it)
Join Date: Mar 2007
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Very good reply NC!
Oasis is really not a low cost carrier, they are a low fare carrier. Even so, I think once they've gain a certain market share and reputation, their price will slowly creep back up. I give them 24 months before they start charging price similar to CX and other carriers.
bus
Oasis is really not a low cost carrier, they are a low fare carrier. Even so, I think once they've gain a certain market share and reputation, their price will slowly creep back up. I give them 24 months before they start charging price similar to CX and other carriers.
bus
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I think if you look at the numbers, as NC already pointed out, you will find that CX is already what some people call an LCC. The only difference between us and some LCCs is that we offer full service and assigned seating.
What people don't realize is that the readon CX is so efficient is the high aircraft utilization rate. Before 9/11, a lot of US airlines were just run really sloppy (Some still haven't got their act together). SWA didn't change much after 9/11, but other airlines did and they really tightened up their ops. Before 9/11 some legacy carriers in the States were getting as low as 8 to 9 hours utilization per day out of their aircraft. They have all increased these figures to approximately 12 to 14 hours since then.
CXs utilization is pretty high and only gets higher. I have rarely gotten off an airplane that sit for more than a couple hours in Honkers. Transit times in other ports are even lower. Now, some people will say (me included) that this is taking a toll on the planes. But, it still menas that CX has lower costs than carriers who fly their planes less.
What people don't realize is that the readon CX is so efficient is the high aircraft utilization rate. Before 9/11, a lot of US airlines were just run really sloppy (Some still haven't got their act together). SWA didn't change much after 9/11, but other airlines did and they really tightened up their ops. Before 9/11 some legacy carriers in the States were getting as low as 8 to 9 hours utilization per day out of their aircraft. They have all increased these figures to approximately 12 to 14 hours since then.
CXs utilization is pretty high and only gets higher. I have rarely gotten off an airplane that sit for more than a couple hours in Honkers. Transit times in other ports are even lower. Now, some people will say (me included) that this is taking a toll on the planes. But, it still menas that CX has lower costs than carriers who fly their planes less.
How long do you think it'll be before Cathay introduce their low cost offshoot
They would do it cheaper now if they thought that they could get away with it. Watch this space...
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[quote]
So if CX started a LCC and people worked for free, the fares would be approx 20% lower than they are now. The rest of the costs would be the same. The savings that companys like Southwest make is by flying to secondary airports and thus lower their route operating costs.(Inflt catering is only a small % of total costs so I didnt bother including it)
[/quote
I agree. LCCs also save money by flying the same freakin' plane for the entire fleet, as well as heavy fuel hedging. Obviously Oasis does not have any fuel hedged at the moment, and even their small fleet of 747s use different engines. I've read that they are currently out there to make a name until they IPO, and I assume that they are just trying to break even until then. I hope CX will be able to stand this period...
So if CX started a LCC and people worked for free, the fares would be approx 20% lower than they are now. The rest of the costs would be the same. The savings that companys like Southwest make is by flying to secondary airports and thus lower their route operating costs.(Inflt catering is only a small % of total costs so I didnt bother including it)
[/quote
I agree. LCCs also save money by flying the same freakin' plane for the entire fleet, as well as heavy fuel hedging. Obviously Oasis does not have any fuel hedged at the moment, and even their small fleet of 747s use different engines. I've read that they are currently out there to make a name until they IPO, and I assume that they are just trying to break even until then. I hope CX will be able to stand this period...
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I think there are many more things a LCC could save on if you compare to CX/KA.
A pure LCC would not have a big expensive office. FF programs are expensive for the airline but sometimes the program in its self makes money. If you only sell tickets on Internet you save 5-8 percent compared to sell them thru travel agents. No F/J class makes catering more efficient. All these small things will make a lot of money added together. Look at Ryan Air. CX is not even close to them.
A pure LCC would not have a big expensive office. FF programs are expensive for the airline but sometimes the program in its self makes money. If you only sell tickets on Internet you save 5-8 percent compared to sell them thru travel agents. No F/J class makes catering more efficient. All these small things will make a lot of money added together. Look at Ryan Air. CX is not even close to them.
