fear_of_fly
Posts: 13
Joined: Sun Feb 18, 2001 2:47 am

Is CX Going To Establish A Low Cost Airline?

Wed Apr 17, 2002 10:53 pm

Qantas and Virgin have already established their low cost airlines, is CX going to follow this action?
 
The Coachman
Posts: 1192
Joined: Sun Apr 29, 2001 9:57 pm

RE: Is CX Going To Establish A Low Cost Airline?

Wed Apr 17, 2002 11:16 pm

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
 
GuyBetsy1
Posts: 808
Joined: Thu Aug 16, 2001 4:00 am

RE: Is CX Going To Establish A Low Cost Airline?

Wed Apr 17, 2002 11:35 pm

CX has no domestic market.

Besides, other than HKG, CX fares are pretty low compared to the others.
 
United Airline
Posts: 8782
Joined: Wed Jan 10, 2001 5:24 pm

RE: Is CX Going To Establish A Low Cost Airline?

Thu Apr 18, 2002 12:10 am

What for? Where should they?
 
United Airline
Posts: 8782
Joined: Wed Jan 10, 2001 5:24 pm

RE: Is CX Going To Establish A Low Cost Airline?

Thu Apr 18, 2002 12:10 am

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

What do you mean?
 
hkg82
Posts: 1304
Joined: Fri Apr 05, 2002 4:24 pm

RE: Is CX Going To Establish A Low Cost Airline?

Thu Apr 18, 2002 2:12 am

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.



 
bluewhite
Posts: 313
Joined: Sun Jul 22, 2001 12:25 pm

RE: Is CX Going To Establish A Low Cost Airline?

Thu Apr 18, 2002 2:30 am

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
 
CX829
Posts: 126
Joined: Thu Mar 28, 2002 3:00 am

RE: Is CX Going To Establish A Low Cost Airline?

Thu Apr 18, 2002 3:43 am

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)
 
bowen0614
Posts: 131
Joined: Wed Nov 14, 2001 3:39 pm

RE: Is CX Going To Establish A Low Cost Airline?

Thu Apr 18, 2002 6:04 am

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.
 
a380
Posts: 652
Joined: Tue Dec 19, 2000 11:51 pm

RE: Is CX Going To Establish A Low Cost Airline?

Thu Apr 18, 2002 11:12 am

Asian passengers generally still expect full service and are pampered by the fine airlines like CX and SQ.
 
bluewhite
Posts: 313
Joined: Sun Jul 22, 2001 12:25 pm

RE: Is CX Going To Establish A Low Cost Airline?

Thu Apr 18, 2002 1:48 pm

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
 
docpepz
Posts: 1706
Joined: Thu May 24, 2001 8:20 pm

RE: Is CX Going To Establish A Low Cost Airline?

Thu Apr 18, 2002 1:59 pm

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)
 
Airbus A3XX
Posts: 479
Joined: Wed May 19, 1999 5:12 pm

RE: Is CX Going To Establish A Low Cost Airline?

Thu Apr 18, 2002 6:58 pm

Silk Air is definitely not a low cost carrier, but a full service, regional carrier though.
 
vywh
Posts: 278
Joined: Tue Feb 05, 2002 6:37 pm

RE: Is CX Going To Establish A Low Cost Airline?

Thu Apr 18, 2002 7:19 pm

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.
 
United Airline
Posts: 8782
Joined: Wed Jan 10, 2001 5:24 pm

RE: Is CX Going To Establish A Low Cost Airline?

Thu Apr 18, 2002 11:37 pm

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
 
B-HOP
Posts: 722
Joined: Wed Nov 22, 2000 8:09 pm

RE: Is CX Going To Establish A Low Cost Airline?

Fri Apr 19, 2002 12:22 am

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!!!
 
bluewhite
Posts: 313
Joined: Sun Jul 22, 2001 12:25 pm

RE: Is CX Going To Establish A Low Cost Airline?

Fri Apr 19, 2002 12:02 pm

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
 
The Coachman
Posts: 1192
Joined: Sun Apr 29, 2001 9:57 pm

RE: Is CX Going To Establish A Low Cost Airline?

Fri Apr 19, 2002 12:19 pm

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
 
bluewhite
Posts: 313
Joined: Sun Jul 22, 2001 12:25 pm

RE: Coachman

Fri Apr 19, 2002 12:36 pm

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
 
The Coachman
Posts: 1192
Joined: Sun Apr 29, 2001 9:57 pm

RE: Is CX Going To Establish A Low Cost Airline?

Fri Apr 19, 2002 12:46 pm

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
 
jesseycy
Posts: 322
Joined: Fri Aug 03, 2001 2:15 pm

RE: Is CX Going To Establish A Low Cost Airline?

Fri Apr 19, 2002 6:42 pm

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....

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