Our Market
 

The ugly truth is: the customer wants a better product, sure. And a younger wife and a bigger house.

But 99% will make an actual booking decision based on cost or shortest connection.

Actually, most passengers in business class will make no booking decision at all, some guy in their travel department will do it for them.

Take a wide guess what this person's main concern is.

Our product is not the problem, the differences are marginal anyway.

It is the market.

And what can a CEO possibly do about the general market, like macro-economic changes, currency fluctuations, oil price hikes, world-wide tourist numbers or GDP growth in China?

Zero, nada, nothing.

He can't offer routes he has no traffic rights for, he can't built himself a new aircraft designed and optimized for his network, he can' choose his customers nor his market, if you look at it closely the choices are actually pretty limited.

He can make a few educated guesses, they might go right or wrong, but in the end they are and always will be guesses. He can change the colour of the tail or the logo, he can play golf and entertain a few mainland decision makers, he can tell the SCMP that a third runway would be really really cool, and that's it.

You guys think if we just had this awesome salt and pepper china, or a few more channels on the IFE, or more superior Gweilo pilots like myself our business prospects would be so much better? Really? Do you guys honestly think any customer is booking a flight because it is a 748 or 380 and not a 777 or 330? Or because the pilots are really super happy to go to work today, since it is a four men crew and they didn't have a roster change this month?

Seriously, you guys need to take off your pilots' goggles and look at the reality.

And please, for the love of Allah, finally understand that ME airlines are successful because of their location, not because of their product.

It is their unique geographic position, and as a result their network, that enables them to operate 380s with a cost advantage.

Plus they have unlimited runway expansion possibilities, no noise problems, no unions, cheap labour, cheap credit etc etc.

ME companies will always have the urge to have the biggest suite, the blingy-est product, the premier league promo contract etc Look at their cars or houses, size does matter in this climate zone, what else do these nutters have, what else is there in Qatar if you take away the limo and the pool?

It is mostly marketing anyway. How many that don't have an oil well in their backyard can afford a sky suite? And what really is the load factor in their first class?

Would that kind of marketing be successful in a yield dominated Asian market? Of course not, that is why nobody outside of the ME is doing it.

Do you guys think airlines with a lesser product lack the know-how for better cabin product or a better menu? Do you think American CEO's like the fact they don't have sleeper seats on many flights? Do you think they just thought, ah well, nah, who needs that? Are you aware this takes one phone call to Boeing or some catering company and, voila, there is your sky bar and the nibbles on the table.

Seriously guys, not the managers are embarrassing, it is your ignorance for the market.

How many Chinese companies would allow their employees to book a cozy sky suite on their next business trip to Zengshou? What is the product like on Hainan Airlines or on China Southern?

Get real, guys.

The airline industry is like the property market, location location location.

We do not have that kind of network, not that kind of customer and not that kind of budget, and unless you relocate Cathay to Abu Dhabi we will never have it. Get over it or send in your application and finally enjoy the great roster and the superior lifestyle in some compound in the middle of nowhere..

Likewise, it is the market that drives our terms and conditions. If thousands of boys and girls want to be a cadet, how bad can the package be? How many do actually resign? Things would only change if young people wouldn't want a career in aviation anymore and it would need to be because of the terms and condition, only then the market would generate significant improvements. Any lack of crew Cathay has or hasn't is not because of a lack of supply, it is because of an internal decision not to hire more. A training ban can have an effect, but there are tools to react and if we push it they will, and in the end the market will prevail.

You guys need to change your perspective and look at the things a CEO actually can change.

Costs.

PS : No, it is probably not fair he gets 10 Million for that kind of work, but since a company has only a handful guys of his pay grade it is a drop in the ocean cost wise, it is totally irrelevant for the share holder, and probably people with that kind of experience do really go for that market rate.

Life ain't fair and Karl Marx was wrong.

What's the point?

Why is it that every post you make, whether here or the AOA forum has you defending the company?

Have a day off.

Glass half empty today eh?

Actually the "A380 effect" has been well documented where passengers do flock to a flight with that equipment on according to several operators.

Please show me the "well documented" A380 effect. Please.

PS My post is NOT pro company, I HATE the company, but that is neither the point nor relevant.

PSS I don't post on the AOA forums since with my opinion it would resemble social suicide.
Or would you in my position?

Well you have committed it already with your constant posts about how CC isn't working (it is) but offer no alternative.

Not to mention your usual sign-offs "btw I never work a G day and always wear my Red Lanyard".

If people want to moan about how sh1te our product is, let them! What response do you expect in PPrune when you try to rationalise why we don't need a a three-room suite in first class?

Russian or Chinese airlines are often cheaper than ME3, and my friends sure aren't flying with them.
Brand recognition plays a big role.

And about first class:
Do you know who fly in first class?
CEOs of big corporation, whose hundreds of employees will fly in business or flexible economy class with your airline, but only if the boss is treated like a real VIP.

Which airline will the business class passenger choose? The one that offers the best benefits when he goes on holiday afterwards.
Unfortunately it has become so difficult to book a flight with frequent flyer miles that most of the business travellers will prefer to ride with Star or Skyteam (and no, not with the ME3).

Unfortunately, our leaders have decided to cut on cost where they shouldn't: first/business class and frequent flyer program.

They will tell you that flight are full anyway (they are) but yields are down. Guess why?

I actually do have an alternative.

Stop suggesting to cadets their contract is inferiour. It isn't. It is the market price, like it or not.

PS I admit the training ban seems to have some effect, but judging from the hundreds of posts after AT's deadline announcement I get the feeling I am not the only one fearing a knee-jerk reaction by the company..

Our own shareholders have questioned our product. There is a thread running into 3 pages where we are questioning our project.

And this clown starts a whole new thread trying to educate us on location and market yet "does not defend the company".

So the fear of a knee-jerk reaction (which has been there since the early nineties) means we should never go into CC?

What are you smoking man!

If you look closely it was a minor shareholder seeking attention. You get that on every shareholder meeting at every company.

Who is the clown?

I never said we should never go into CC ( I actually voted in favour of it in the first round). I just said we should do it with realistic goals and for the right cause. There we differ, that is my point.

PS Still waiting on that " well documented" A380 study.

Some tiny dong!!!

Obviously you have no clue how this airline got its reputation of being a PREMIER airline which they are now flushing down the toilet.

The food,the crew ( friendly worldly cabin crew and very qualified pilots that could actually do a visual approach around a corner) entertainment and cabin seating that was industry
leading. It was this combination that made a product that was in demand eg. Super J jumbos going to JFK with 26 first and 87 J seats and they always filled up first and when those are full you don't need to carry the backpacker who travels once every 10 years for the cheapest price available.
Now managment has thrown that reputation away to cheap out like no salt and pepper shakers or no a la carte service in J and all those premium pax are switching their loyalties. I have had pax complain to me personally and on almost every flight the ism has a complaint list from pax which all pertains to our current cheap overall product. If you think this is the way this airline should be going and is normal all I can say is that I Know you,
STD will never be a successful CEO in any business.

Sam Ting Wong,

you do make some good points and I agree, that some of us may have unrealistic expectations. However, there are some fundamental flaws in your arguing.

The market does what the market will and while the product differences may be marginal -and they are- the customers always notice how they are treated when they travel with us. The "personal touch" is an essential part in the service industry, much more important, than salt and pepper shakers or even larger seats.

Only a healthy corporate culture can produce employees, who are able to provide that vital human touch/personal touch, call it what you may. It is this ingredient -more than anything else-, that is rapidly disappearing from our product mix. In the end, business is always about the people, the profits are consequential. Neglect the people, you may have a short term boost in profits, but do so over a longer period of time and your business is history.

The most successful businesses put employees first, customers second and shareholders third - in that order, not because they are idealistic, but because they are smart. They realize, that without great employees, there are no great customers and therefore no great profits for the share holders.

I leave it up to you, where you think our management scores in that area (apology for the sarcasm)

Equally, controlling cost is very important in any successful business but assuring a healthy balance between employee care and cost control is key. That is more of an art, than science and thus requires managers with "personality" or in short - leaders.

Again, the current management is taking a purely scientific approach in that department, creating a very unhealthy imbalance. Tony Tyler -like him or not- was the last CEO with people skills, albeit we pilots may not have been the primary recipients of his affection, but other employee groups were.

That pure focus on cost control and neglect of the "people" manifested itself to the mess where we are today.

The company has become more like a bloated government without leadership at the top. The lack of leadership facilitates an excessive "silo" culture within, producing mediocre outcomes overall.

Cancelling the RP's, pushing flight crews to the limits, hiring inexperienced pilots and treating paying customers poorly, etc. are the just manifestations of that lack of direction.

I believe, that is the true reason why we are in contract compliance, training ban and most importantly, why our product is losing ground rapidly.

I hope you are right, Dan, I really do.

Avius,

a few comments.

If you were right and a healthy relationship is necessary for the success of an airline, well, I doubt there would be any. EK pilots complain as much as we do, just visit the ME forum, same as Qatar, Korean etc. Pilots will hate management until judgement day, it will never change. Some of you will like a broken clock that is correct twice a day announce in excitement the big yearly bonus EK granted their pilots.. ommiting the little detail that over the year they get payed less and work (much) harder. Because of these dishonest and absurd cherry picking comparisons no one in the end ever leaves to actually join EK. (I know, they will, soon, just about to happen, I know, yawn).

It is a nasty and frankly often disgusting habit of a many a colleague to contemptuously complain about the colleagues in the back of the plane. If I had a penny for every arrogant comment over the last 13 years.. Nevertheless, in the same time period, they won how many awards?

Again, and this is precisely my point I am trying so desperately to make, winning an award for the best business class is not the only way to success. It depends if the market is there for such a product, a product that cost money. It is not difficult to have a great product, or even the best in the world. It is actually very easy. Just throw out seats, spend more on catering, establish a fleet of limos to pick people up etc. EK use Audi? Well, let's use Porsche! That is what you guys habe to understand: it is not such a big mystery how to win these awards, the big question is: will you have customers, companies, tourists, mainland Chinese etc who are willing to pay more (!!) for this. THAT is the question.

Think about your own consumer habits. Would you go on an Air Asia flight with no service, no leg room, no lounge on a flight to BKK? Or would you spend say 3000 more for that perfect sandwich you absolutely need. Hell yes, ALL of you would.

But still you have that image of the quality searching, super sophisticated customer in mind. Regardless of costs he is in search of the perfect product, the best lounge, he will not settle for less, only the most exclusive and refined experience will do. He is the super star CEO of a fortune 500 company, he either travels alone or with his likewise very demanding super model trophy wife, of course only in first class, and only if his corporate gulfstream is in the shop. That is your picture of our customer.

Guys!

Our customer is a middle manager of some car parts selling electronic company in New Jersey, his travel department booked him the best connection at the best price, he just wants to sleep and a few quiet ones before that, than he will spend the rest of the flight beer farting and dreaming about that cute little bum of the bc which is half the size he has at home. That is the ugly truth I am talking about.

Again, our product is not as bad as you want it to be.

We are, and this is an undeniable fact, a five star airline, one of 6 or so in the entire world. Hardly a sign for a bad product.

Of course, you now will now say, as you have done for decades, that this time it is different, this time the quality is not there anymore, it will be only a question of time that the customer will abandon us, only a question of time until we sink , we crash etc

You guys always cry wolf, since decades and decades. When was there EVER a time you didn't complain about the product, didn't in excitement and desperation announced now is the time ,now people will leave etc.

And then it never happens.

Sam Ting Wong

I agree with most of the arguments in your posts. I also wear the red at work, follow the cc 'strategy'. This is a democratic world that we live in, hopefully. A guy who suggests a different petspective doesn't make him a clown or a pro company man.

Declining quality of products in CX is an undeniable fact. CX has once reverted a product, namely the coffin business class, which only lasted for 2-3 years.
Whether our current product is bad enough to drive our loyal pax away is yet to see.

Btw, someone mentioned about the 380 effect. Let's say the effect is present, it's at most a one time effect! After all, it's flight frequency, schedule and price that matters.

Sam Ting Wong
Finally somebody who has both feet firmly placed in the real world and sees it in the way the world operates.
Thanks

I have to agree with Sam Tim Wong as well. Too many people in this airline live in a fantasy world.

Sam Ting Wongs contention that because ME carriers can afford to provide a superior product means that we must surrender the premium marker because we cannot compete, so why bother trying. The result is ,again, a race to the bottom. The CEO of CX is complaining that yield is down because the cash generating Premium market is going to other carriers, you cannot have it both ways. What is the answer Some Ting Wong?

A big disconnect between the company's stated 'leaving' rate, and the numbers that are changing on the actual aircrew seniority list. The ship is sinking fast, but their arrogance makes them institutionally incapable for admitting their own policy mistakes, the very mistakes that are burying this airline. The sooner people establish themselves with another airline, on a new seniority list, the better off they will be. As for our long suffering passengers, they will soon find better options.

As I said, we are a five star airline, and though by definition a premium airline. It is not true that we surrender, it is not true we don't bother trying. This is absurd, with all due respect.

If you define premium as having the biggest sky suite and count a shower as vital and indispensable equipment, well then good luck finding the customer who is willing to pay for that, that is what I am saying.