Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Is CX Going To Establish A Low Cost Airline?  
User currently offlineFear_of_fly From Hong Kong, joined Feb 2001, 13 posts, RR: 0
Posted (12 years 3 months 1 week 3 days 17 hours ago) and read 2221 times:

Qantas and Virgin have already established their low cost airlines, is CX going to follow this action?

20 replies: All unread, jump to last
 
User currently offlineThe Coachman From Australia, joined Apr 2001, 1425 posts, RR: 0
Reply 1, posted (12 years 3 months 1 week 3 days 16 hours ago) and read 2164 times:

You have got be kidding right?

Why should they do this?

Qantas and Virgin are different animals to CX. QF has nowhere else to expand except internationally and to do so profitably it has to lower costs, which launching Australian Airlines allows them to do. Virgin Blue is a low-cost operation in Australia which before Virgin and Impulse entered had some of the highest airfares in the world.

CX doesn't need to do this.



M88, 722, 732, 733, 734, 73G, 73H, 742, 743, 744, 752, 762, 763, 772, 773, 77W, 320, 332, 333, 345, 388, DH8, SF3 - want
User currently offlineGuyBetsy1 From Canada, joined Aug 2001, 839 posts, RR: 6
Reply 2, posted (12 years 3 months 1 week 3 days 16 hours ago) and read 2144 times:

CX has no domestic market.

Besides, other than HKG, CX fares are pretty low compared to the others.


User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9160 posts, RR: 15
Reply 3, posted (12 years 3 months 1 week 3 days 15 hours ago) and read 2126 times:

What for? Where should they?

User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9160 posts, RR: 15
Reply 4, posted (12 years 3 months 1 week 3 days 15 hours ago) and read 2124 times:

Besides, other than HKG, CX fares are pretty low compared to the others.

What do you mean?


User currently offlineHkg82 From Hong Kong, joined Apr 2002, 1266 posts, RR: 1
Reply 5, posted (12 years 3 months 1 week 3 days 13 hours ago) and read 2116 times:

I don't think CX are going to start a low cost airline now, not in the near future. It isn't part of their strategy. They're focused on mainly business travellers by offering a premium product.





User currently offlineBluewhite From Hong Kong, joined Jul 2001, 333 posts, RR: 0
Reply 6, posted (12 years 3 months 1 week 3 days 13 hours ago) and read 2090 times:

Maybe using the now, wholly-owned, Air Hong Kong?
That would be a smart move, starting off with cargo flights.

I actually don't see why they wouldn't consider it - business-wise, there is a leisure travel market around Asia, and the new start-ups like Australian Airlines will start competing on routes with them soon.
For me, I would and do fly economy class for short-haul flights - what's the problem, as long as it's safe, punctual and the service is friendly? I don't need a full-course meal every 2-3 hours!!
(I still think CX has a great product though!)
BW


User currently offlineCX829 From , joined Dec 1969, posts, RR:
Reply 7, posted (12 years 3 months 1 week 3 days 12 hours ago) and read 2076 times:

You could probably expect route expansions as the economy picks up. CX will not launch any low cost carrier. Only troubled airlines do that. Take a look at AC, for instance. (no offense)

User currently offlineBowen0614 From Hong Kong, joined Nov 2001, 132 posts, RR: 0
Reply 8, posted (12 years 3 months 1 week 3 days 9 hours ago) and read 2061 times:

Oh yeah~ I don't think that CX is going to launch a low-cost airline either. That's because CX don't have short-haul route (within Mainland China). If CX is going to launch low-cost airline within southeast asia routes, that's not a wise move also. Think about it, all CX fleets are now wide-bodied jet. If CX is going to launch a low-cost airline, they must buy some narrow-bodied fleets like A319, A320 or some B737 New Generation.

Meanwhile, CX wants to concentrate on their Cargo business. They have also grounded some jets! I don't think they will launch a low-cost airline.


User currently offlineA380 From Canada, joined Dec 2000, 658 posts, RR: 1
Reply 9, posted (12 years 3 months 1 week 3 days 4 hours ago) and read 2033 times:

Asian passengers generally still expect full service and are pampered by the fine airlines like CX and SQ.

User currently offlineBluewhite From Hong Kong, joined Jul 2001, 333 posts, RR: 0
Reply 10, posted (12 years 3 months 1 week 3 days 2 hours ago) and read 2017 times:

I would think CX don't want to start one up either. As someone rightly pointed out, their fleet is wide-body and their service is always top-notch full service.

The major thing that is changing is the competitive environment, external influences which may affect CX/SQ's "full-service" flights and current market / passengers, in the future. Any business has to adapt to changes, whether they want to or not, or else they become uncompetitive.

BW


User currently offlineDocpepz From Singapore, joined May 2001, 1969 posts, RR: 3
Reply 11, posted (12 years 3 months 1 week 3 days 1 hour ago) and read 2015 times:

Singapore Airlines launched Silk Air. Can Silk Air be considered a low cost airline? It has a Business Class though, and gives hot meals on most flights. And it still costs S$700 to get to Laos from Singapore! (Northwest can get you to LAX for the same price)

User currently offlineAirbus A3XX From Australia, joined May 1999, 507 posts, RR: 1
Reply 12, posted (12 years 3 months 1 week 2 days 20 hours ago) and read 1988 times:

Silk Air is definitely not a low cost carrier, but a full service, regional carrier though.

User currently offlineVywh From Hong Kong, joined Feb 2002, 283 posts, RR: 0
Reply 13, posted (12 years 3 months 1 week 2 days 20 hours ago) and read 1980 times:

But it seems to be a trend for low-fare tickets.
I've heard that some other airlines are trying to promote low-fare tickets without meal and TV,they also choose a lower standard airport so that the parking fee can be lowered.
I don't know,maybe ten years later,there'll be two types of airlines.One is the normal one(that's the one existing),and the other is cheap-fee airlines in which they try to lower their operation cost in order to compete with the bigger airliners.
What do you think about these?Please kindly correct me if I'm wrong,thx.


User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9160 posts, RR: 15
Reply 14, posted (12 years 3 months 1 week 2 days 16 hours ago) and read 1955 times:

CX is always the most expensive in many routes.

I don't think CX will ever launch a low cost carrier. They don't have to. Unless they want to build Air Hong Kong into one by launching Passenger service.

Silkair is a full service carrier. Its just that it is a regional carrier


User currently offlineB-HOP From Hong Kong, joined Nov 2000, 623 posts, RR: 1
Reply 15, posted (12 years 3 months 1 week 2 days 15 hours ago) and read 1944 times:

No chance: -

A: - Are the new low cost airline use Shek kong as their base!?

B: - Cathay have a fairly low cost anyway
C: - NO one in HK these days would fly without PTV.

Regards
Kev



Live life to max!!!
User currently offlineBluewhite From Hong Kong, joined Jul 2001, 333 posts, RR: 0
Reply 16, posted (12 years 3 months 1 week 2 days 3 hours ago) and read 1928 times:

Just to extend the debate, what happens if competitors introduce "no-frills" service on routes competing with CX/SQ (which will start within the year)? Assume they grab some market share, which I think is highly likely.

If you were the CEO, how would you respond?

BW


User currently offlineThe Coachman From Australia, joined Apr 2001, 1425 posts, RR: 0
Reply 17, posted (12 years 3 months 1 week 2 days 3 hours ago) and read 1924 times:

Crush them!

I'd do this by loading up on capacity. If I was CX, I have A330-300's etc. at my disposal, I even have B777-200's and -300's. If I was SQ, I'd slug it out with B777's. A start-up no-frills carrier won't have the cash to take on carriers flying widebodies and the economics of widebodies, cargo capacity would easily absorb any losses I would incur.

I wouldn't worry too much about Australian Airlines, their management team has already announced that they won't offer drastically lower fares.



M88, 722, 732, 733, 734, 73G, 73H, 742, 743, 744, 752, 762, 763, 772, 773, 77W, 320, 332, 333, 345, 388, DH8, SF3 - want
User currently offlineBluewhite From Hong Kong, joined Jul 2001, 333 posts, RR: 0
Reply 18, posted (12 years 3 months 1 week 2 days 3 hours ago) and read 1921 times:

That's actually effective. (crushing them)

But of course, no-frills airlines have far lower cost bases, so they have the margin to squeeze as well, and I don't see any of the "traditional US Majors" squeezing out Southwest Airlines.......similarly in Europe.

We'll just have to wait and see if this is replicated in Asia.

BW


User currently offlineThe Coachman From Australia, joined Apr 2001, 1425 posts, RR: 0
Reply 19, posted (12 years 3 months 1 week 2 days 3 hours ago) and read 1919 times:

Southwest can't be crushed, it's business model is too well protected and strictly followed.

They are also very big now, one can't start operating a fleet of 10, let alone 30 or so A330-200/300's in Asia, that would require one massive bankroll. WN has several hundred B737's.

If someone started an airline that flew HKG-SIN, and started with say 2 A330's, then it would be swamped by the 4 and 5 dailiy flights that CX and SIN operate each (and add QF, UA etc. into that mix as well). It wouldn't attract any business traffic, and it would be hard to operate an A330-300 with about 350-380 pax and be profitable only offering low fares over such relatively short distances as HKG-SIN. CX and SQ could easily lower their fares in economy, and still charge their high fares for business and first class. Cargo in the A330's, B777's etc. would easily overcome the losses that putting extra cheap tickets on the HKG-SIN route would incur. It wouldn't take long for the new entrant to fold, otherwise, someone would have done it by now. To compete, the airline would need to attack routes where companies aren't so well entrenched.



M88, 722, 732, 733, 734, 73G, 73H, 742, 743, 744, 752, 762, 763, 772, 773, 77W, 320, 332, 333, 345, 388, DH8, SF3 - want
User currently offlineJesseycy From New Zealand, joined Aug 2001, 343 posts, RR: 0
Reply 20, posted (12 years 3 months 1 week 1 day 21 hours ago) and read 1891 times:

Nah.... Simply because CX, and SQ is really experienced in the field of introducing limited cheap fares that will appeal to us money minded asians!

Most people who fly HKG-SIN, maybe to visit their families, or friends, flying economy, how will they go about buying an air ticket? Let's say they plan to fly in June, they'll go down to the travel agent in Jan, reserve a seat, but not issuing it till the last moment.... In the meantime, they'll scan the newspapers and ads, and once an offer comes out, they'll grab it!

So why need a low cost carrier? People who really want to save have all types of tricks anyway! I never flew SIN-HKG return for more than S$450! What do you think the fare of a low cost carrier will be? Much lower than that? I don't think so.....

Low cost carriers won't really appeal to the ecomomic asians, and they can't tap into the frequent business flyers either....


Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Taca To Start Low Cost Airline In Mexico? posted Tue Dec 14 2004 19:04:18 by MAC1
All Nippon Airways To Launch Low Cost Airline posted Mon Jun 7 2004 11:27:19 by Singapore_Air
Thomson To Launch Low Cost Airline From Coventry. posted Thu Dec 18 2003 00:48:04 by Gilesdavies
Austrian Airlines To Start A Low-Cost Airline posted Sun Feb 17 2002 23:34:12 by Singapore_Air
LH To Launch Low Cost Airline posted Tue Feb 5 2002 10:02:43 by Lhuaaua
KLM Plans To Launch Low-cost Airline posted Wed Sep 22 1999 21:33:39 by Tol air
Is MSN Ever Going To Get An Interesting Airline? posted Wed Mar 22 2006 17:46:42 by Akeytravel
The Best Low Cost Airline Is..... British Airways! posted Sun Jun 29 2003 11:30:54 by Britair
New Low-cost Airline For Britain (LTN To Be Exact! posted Tue Mar 11 2003 13:09:01 by David_itl
What Is Your Favourite Low Cost Airline? posted Mon Jun 17 2002 16:36:50 by Skymileman