Doom & Gloom
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Personally I think their choice of A/C is correct, as much as id like them to buy more, however they have no innovation when it comes to service nor do they listen to the front line staff. Anybody could have seen that the cradle EY seats were a bad idea and it took them 3 goes to finally get the J class seat correct at what $$$, eticketing they were forced to join that revolution by the date agreed by all 1W carriers, IFE that's available during boarding? ID travel clothing, iPads in the cockpit vs EFB the list goes on. Any decent suggestion is met with CANNOT somewhere along the line.
Last edited by SMOC; 4th Apr 2013 at 03:07.
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I've been around a tad longer than Slosar thank you.
And I stand by my statement that by rotating management, Swire is only encouraging immediate results and discouraging risk taking.
You neglect my second point where many other carriers have full J and F classes. Why isn't CX getting this custom? It's not the crews, it's the product and service
And I stand by my statement that by rotating management, Swire is only encouraging immediate results and discouraging risk taking.
You neglect my second point where many other carriers have full J and F classes. Why isn't CX getting this custom? It's not the crews, it's the product and service
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BB,
I have not heard that stat, but if it is true... it is game, set, match 747-8I. That makes 85+ seats of gravy and a decent (though not as much as 77W) belly capacity for cargo. CX has to compete with A380 operators on trunk routes (HKG-LHR, SFO, LAX, etc). I believe high quality sound proofing and a well done interior on the -8I will give CX a very competitive product without all the risks associated with a fleet of A380s.
I have not heard that stat, but if it is true... it is game, set, match 747-8I. That makes 85+ seats of gravy and a decent (though not as much as 77W) belly capacity for cargo. CX has to compete with A380 operators on trunk routes (HKG-LHR, SFO, LAX, etc). I believe high quality sound proofing and a well done interior on the -8I will give CX a very competitive product without all the risks associated with a fleet of A380s.
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Two Tigers is bang on, EK are flying around with A380's full to the gunnels, so there is no real excuse on that front. The other point is, have you ever tried to get on J class recently, it's nigh on impossible, there are plenty of premium travellers as far as I can see. Filling a 380 is not the problem, plenty of others are doing just that, the problem for Cathay is providing a comparable service to the likes of EK once said pax are on board.
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I always thought it was about yields and not load factors.
Besides, the A380 seems good if you can fill it but what if you can't? Cathay has always been on the conservative side. They would rather have smaller planes filled all the time than bigger planes filled part of the time, even if it means turning away a lot of passengers when times are good. Seems to have worked for the last 67 years or so.
Besides, the A380 seems good if you can fill it but what if you can't? Cathay has always been on the conservative side. They would rather have smaller planes filled all the time than bigger planes filled part of the time, even if it means turning away a lot of passengers when times are good. Seems to have worked for the last 67 years or so.
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I thought the point of this thread is that it may no longer be working according to company results...
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I find it funny when people say CX uses a different tactic out of LHR offering multiple departure times rather than large aircraft. The following aircraft belonging to EK depart LHR daily.
EK8 A380 at 0840
EK2 A380 at 1415
EK30 A380 at 1700
EK4 A380 at 2040
EK6 A380 at 2215
EK8 A380 at 0840
EK2 A380 at 1415
EK30 A380 at 1700
EK4 A380 at 2040
EK6 A380 at 2215
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Sloppy Joe,
Let's think about that one for a moment. You point to the use of 5 A380s by EK, I presume, as evidence that CX should be doing the same. There are a few points to consider upon examining that logic...
Emirates' Dubai hub offers far more connection opportunities than does Hong Kong. Think about connecting to Middle Eastern cities, the Subcontinent, and Africa. Those passengers are not going to be buying tickets through HKG. Yet Emirates can still connect LHR passengers to all of CX's markets from Dubai. Think NZ, OZ, China, SE and NE Asia. It's a simple matter of geography. So it is not really a fair comparison, is it?
For CX, cargo matters, especially on the LHR route. With reduced European freighter frequencies these days, those 5 777s represent about 100-125T worth of daily cargo capacity (or about one 747's payload). If CX were to be running 5 A380s to LHR, there would be about half that much capacity (volumetric). Emirates is much less reliant on cargo revenues than is CX. Again, it is a simple matter of geography. The Chinese make stuff that folks in the UK want. The Arabs... not so much.
Also, there exists the issue of load factors and yields. If the company is to be believed - the problem in 2012 was cargo, premium passenger yield (not load factors), and high fuel prices. So, would an A380 (and its superior product) fix the yield issue? Are CX passengers going to pay more to sit in the A380 J seat as opposed to the 777 J seat? What would the A380 do to the load factors? Increase them because everyone wants to fly the A380 so much? I think not. The only thing an A380 does well is lower seat costs, but only if it is full.
I, for one, am glad pilots don't run our airline. We'd put CX right into a tailspin by bringing on massive capacity and flying it half full to all types of exotic locations. As geh065 pointed out, there are undoubtedly passengers out there that CX could be serving but doesn't. Those passengers go to other airlines when they fly, but their demand is very elastic. The yield they offer is usually low, and they go away when the economy turns sour. Let EK, Thai, and the like have them.
Let's think about that one for a moment. You point to the use of 5 A380s by EK, I presume, as evidence that CX should be doing the same. There are a few points to consider upon examining that logic...
Emirates' Dubai hub offers far more connection opportunities than does Hong Kong. Think about connecting to Middle Eastern cities, the Subcontinent, and Africa. Those passengers are not going to be buying tickets through HKG. Yet Emirates can still connect LHR passengers to all of CX's markets from Dubai. Think NZ, OZ, China, SE and NE Asia. It's a simple matter of geography. So it is not really a fair comparison, is it?
For CX, cargo matters, especially on the LHR route. With reduced European freighter frequencies these days, those 5 777s represent about 100-125T worth of daily cargo capacity (or about one 747's payload). If CX were to be running 5 A380s to LHR, there would be about half that much capacity (volumetric). Emirates is much less reliant on cargo revenues than is CX. Again, it is a simple matter of geography. The Chinese make stuff that folks in the UK want. The Arabs... not so much.
Also, there exists the issue of load factors and yields. If the company is to be believed - the problem in 2012 was cargo, premium passenger yield (not load factors), and high fuel prices. So, would an A380 (and its superior product) fix the yield issue? Are CX passengers going to pay more to sit in the A380 J seat as opposed to the 777 J seat? What would the A380 do to the load factors? Increase them because everyone wants to fly the A380 so much? I think not. The only thing an A380 does well is lower seat costs, but only if it is full.
I, for one, am glad pilots don't run our airline. We'd put CX right into a tailspin by bringing on massive capacity and flying it half full to all types of exotic locations. As geh065 pointed out, there are undoubtedly passengers out there that CX could be serving but doesn't. Those passengers go to other airlines when they fly, but their demand is very elastic. The yield they offer is usually low, and they go away when the economy turns sour. Let EK, Thai, and the like have them.
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I'm not suggesting we get A380's (though I enjoy travelling on them). In fact other than LHR and JFK, and perhaps some short haul TPE/PVG/PEK we really couldn't use it anymore effectively than a B777er.
I am suggesting that we look at Africa and S.America for one, and that if we are departing with empty seats in F and J its not due to the economy or whatever.. Other carriers seem to be able to attract customers.. just stealing 5-10 of them per flight would be a huge win for CX.
Sadly the management would rather cry about the economy and fuel prices, than understand people are simply choosing another carrier.
I am suggesting that we look at Africa and S.America for one, and that if we are departing with empty seats in F and J its not due to the economy or whatever.. Other carriers seem to be able to attract customers.. just stealing 5-10 of them per flight would be a huge win for CX.
Sadly the management would rather cry about the economy and fuel prices, than understand people are simply choosing another carrier.
Last edited by twotigers; 4th Apr 2013 at 17:41.
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TT,
Filling seats is never a problem if the airline is willing to destroy yield. An incorrect assumption is that a 100% full airplane makes more than say a 90% full airplane. Optimal revenue, from a macro perspective, does not come from selling every single seat in the network. In fact, keeping seats for sale until the last minute is the only way to serve the walk-up fare. These are a very important part of the revenue equation. Sometimes seats go unsold. That's OK.
Look at what happened to Oasis... They did not have a load factor problem. Their flights were constantly full, and it certainly wasn't because their product was amazing. They had a revenue (yield) problem because they could not cover the rising fuel prices in 2008.
I'm glad CX charges a lot for their seats. Not only do we make more money that way, it gives me the occasional opportunity to go places during my very limited time off. I do not think the price inelastic passengers, business travelers, are choosing other carriers. We may very well be losing connecting passengers to other carriers, but I don't think those are worth fussing about.
Keep doing what you're doing CX! It makes sense to me. Now about HKG's inflation and that raise...
Filling seats is never a problem if the airline is willing to destroy yield. An incorrect assumption is that a 100% full airplane makes more than say a 90% full airplane. Optimal revenue, from a macro perspective, does not come from selling every single seat in the network. In fact, keeping seats for sale until the last minute is the only way to serve the walk-up fare. These are a very important part of the revenue equation. Sometimes seats go unsold. That's OK.
Look at what happened to Oasis... They did not have a load factor problem. Their flights were constantly full, and it certainly wasn't because their product was amazing. They had a revenue (yield) problem because they could not cover the rising fuel prices in 2008.
I'm glad CX charges a lot for their seats. Not only do we make more money that way, it gives me the occasional opportunity to go places during my very limited time off. I do not think the price inelastic passengers, business travelers, are choosing other carriers. We may very well be losing connecting passengers to other carriers, but I don't think those are worth fussing about.
Keep doing what you're doing CX! It makes sense to me. Now about HKG's inflation and that raise...
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Again, I never said lower the price,
I said others are selling their expensive F and J seats.
That's it.
People ARE flying and choosing to pay high fares. They are not choosing us.
That is a fact.
This discussion should be why.
( and yes.. My salary has eroded significantly and we need 8-9% increase to make up for that.)
I said others are selling their expensive F and J seats.
That's it.
People ARE flying and choosing to pay high fares. They are not choosing us.
That is a fact.
This discussion should be why.
( and yes.. My salary has eroded significantly and we need 8-9% increase to make up for that.)
Last edited by twotigers; 4th Apr 2013 at 19:39.
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TT,
Do you have any data to support your facts? Or are they based on anecdotal evidence? I'm not saying you're wrong, just that your claim is hard to prove. I don't think anecdotal evidence is enough.
If CX's F and J load factors are considerably lagging our competitors on routes where we fly head to head, then I think you probably have a good argument.
Do you have any data to support your facts? Or are they based on anecdotal evidence? I'm not saying you're wrong, just that your claim is hard to prove. I don't think anecdotal evidence is enough.
If CX's F and J load factors are considerably lagging our competitors on routes where we fly head to head, then I think you probably have a good argument.
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Cxorcist, very very good posts....at the risk of sounding a bit redneck there's way too many armchair quarterbacks on this forum who seem unable to see further than a full aeroplane ...we all like to bemoan our management, but as pilots, who are we to debate the viability of any particular route without not only the details but also the expertise to analyse those details .....there are whole departments and sophisticated computer programmes that crunch the numbers constantly to assess weather or not we should serve Lagos or Nairobi, Barcelona, or Honolulu, and if the projections don't stack up, then we don't do it...surely better to be cautious and keep money in the bank than expand exponentially and with gay abandon like someone like Virgin whose staff are constantly under the threat of the next round of redundancies because of the uncertainties this modern world casts upon the thinner than thin margins they have on a route that seemed a good idea 2 years ago.......now ..as for the product...well that's an entirely different matter
Last edited by sorvad; 4th Apr 2013 at 21:03.
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Ticket Prices
Whilst I agree with many in the debate that it's about yield, not LF, it leads to another paradox.
Other than during the low seasons, most flights I operate are at 95%+ LF, and yet we still hear them crying poor. So, charge more for the tickets!!!!
I know that sounds simplistic, but dropping the LF to 85 - 90%, but with a slightly higher price would undoubtedly return more yield. The comment about them having people in the office with computers working all this out is no doubt true, but are they doing a good job??
The ultimate step on this path is pay cuts & employee concessions because times are tough. Don't blame me, blame the person who set the price too low.
Someone (I think it was NC) one time posted some here calculations here that if we had charged an extra US$10 per seat network wide, what the difference would be. Think about that, that's just under HK$80. We might lose a few price sensitive passengers, but I couldn't imagine the total yield would be less.
Other than during the low seasons, most flights I operate are at 95%+ LF, and yet we still hear them crying poor. So, charge more for the tickets!!!!
I know that sounds simplistic, but dropping the LF to 85 - 90%, but with a slightly higher price would undoubtedly return more yield. The comment about them having people in the office with computers working all this out is no doubt true, but are they doing a good job??
The ultimate step on this path is pay cuts & employee concessions because times are tough. Don't blame me, blame the person who set the price too low.
Someone (I think it was NC) one time posted some here calculations here that if we had charged an extra US$10 per seat network wide, what the difference would be. Think about that, that's just under HK$80. We might lose a few price sensitive passengers, but I couldn't imagine the total yield would be less.
BC,
I totally agree. If the percentage of the time the LHR services are full is as much as it appears to me there must be more money to be made on fares.
The multiple 777 services per day are counter-productive as they have the a/c changed at short notice from ones with F to ones without F but more J.
This alienates both F & J pax so the fact that we are still full says that we aren't charging enough.
It also makes the case for an a/c like the -8i with guaranteed F class cabin.
Wouldn't do staff travel any harm either
I totally agree. If the percentage of the time the LHR services are full is as much as it appears to me there must be more money to be made on fares.
The multiple 777 services per day are counter-productive as they have the a/c changed at short notice from ones with F to ones without F but more J.
This alienates both F & J pax so the fact that we are still full says that we aren't charging enough.
It also makes the case for an a/c like the -8i with guaranteed F class cabin.
Wouldn't do staff travel any harm either
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If you look up the fares on any of the ticketing sites like kayak or expedia it shows that while Cathay charges similarly to BA on LHR-HKG-LHR routes, all of the other carriers offer radically reduced fares due to having to make connections. Also, keep in mind that it is the total system revenue that is taken into account versus only the sector by sector view. This means that one pax traveling to HKG as a final destination may be worth more than one who is connecting to DPS. Nonetheless, the amount of competition of lower fares for the mainland carriers is quite fierce; therefore, simply raising the fares won't do anything but exacerbate the revenue issue.
There is a fundamental problem that CX faces, but it won't be solved by an a-380 or by slightly raising fares. Let me clarify that last part: you cannot just raise fares with such high competition without doing something to the product. The a-380 would be a change to the product, but due to its high operating cost the resulting rise in revenue would be offset.
But I have been wrong before.
There is a fundamental problem that CX faces, but it won't be solved by an a-380 or by slightly raising fares. Let me clarify that last part: you cannot just raise fares with such high competition without doing something to the product. The a-380 would be a change to the product, but due to its high operating cost the resulting rise in revenue would be offset.
But I have been wrong before.