London, San Francisco and New York:

http://www.scmp.com/news/hong-kong/econ ... eat-cathay

Let the discussions begin!

Hong Kong Airlines will need to up there game. Particularly their Inflight service in Business and Economy class.
I have flown on both airlines out of Hong Kong, the Cathay service is far superior.
But again its always good have fair competition.

Ugly51 wrote:

Hong Kong Airlines will need to up there game. Particularly their Inflight service in Business and Economy class.
I have flown on both airlines out of Hong Kong, the Cathay service is far superior.
But again its always good have fair competition.

No Doubt. That said, if they can undercut CX's price point considerably due to lower operating costs and tighter pitch, they might be able to gain considerable market share, especially considering that all routes will be flown with the very efficient A350.

It states in the article that they have 21 A350s on order. Wonder if they will be opening any additional intercontinental routes over the coming months. Targeting other large hubs that are currently underserved could work. Some examples i can think of include Munich, Dallas or even Manchester.


Cheers,
intothinair

intothinair wrote:

Ugly51 wrote:

Hong Kong Airlines will need to up there game. Particularly their Inflight service in Business and Economy class.
I have flown on both airlines out of Hong Kong, the Cathay service is far superior.
But again its always good have fair competition.

No Doubt. That said, if they can undercut CX's price point considerably due to lower operating costs and tighter pitch, they might be able to gain considerable market share, especially considering that all routes will be flown with the very efficient A350.

It states in the article that they have 21 A350s on order. Wonder if they will be opening any additional intercontinental routes over the coming months. Targeting other large hubs that are currently underserved could work. Some examples i can think of include Munich, Dallas or even Manchester.


Cheers,
intothinair

CX serve Manchester 5x a week and will soon go up to daily.

TheGeordielad wrote:

intothinair wrote:

Ugly51 wrote:

Hong Kong Airlines will need to up there game. Particularly their Inflight service in Business and Economy class.
I have flown on both airlines out of Hong Kong, the Cathay service is far superior.
But again its always good have fair competition.

No Doubt. That said, if they can undercut CX's price point considerably due to lower operating costs and tighter pitch, they might be able to gain considerable market share, especially considering that all routes will be flown with the very efficient A350.

It states in the article that they have 21 A350s on order. Wonder if they will be opening any additional intercontinental routes over the coming months. Targeting other large hubs that are currently underserved could work. Some examples i can think of include Munich, Dallas or even Manchester.


Cheers,
intothinair

CX serve Manchester 5x a week and will soon go up to daily.

Not exactly a lot, considering close historic ties between HK and UK. London i beleive has around 60+ direct flights from HK compared to 5 a week (soon 7 a week) to Manchester.

Which LON and NYC gateway?

...I'm guessing LGW and JFK?

HK tried London before and failed miserably. With no connection feed and strong competition, this will be a tough fight for yield.

They are considered a charter airline, and not a business one, so getting yield will be difficult on such long segments.

Virgin has struggled on the route with a stronger brand.

intothinair wrote:

That said, if they can undercut CX's price point considerably due to lower operating costs and tighter pitch, they might be able to gain considerable market share, especially considering that all routes will be flown with the very efficient A350.

Would love to know where thi fallacy of HKA having lower costs comes from. They have never been profitable, each year being supported by the parent groups cash.

They don't publish financial results.

The parents group keeps making the papers as banks have stopped dealing with them over concerns of their ownership and control.

LAX772LR wrote:

Which LON and NYC gateway?

...I'm guessing LGW and JFK?

Hong Kong Airlines is owned by Hainan Airlines which is technically owned by the Chinese govt. Every single Chinese Airline flying from Tier 1 Chinese cities has attained slots to LHR. Here's hoping Hong Kong Airlines can get the same. Pretty sure for NY it will be JFK as well.

TheGeordielad wrote:

CX serve Manchester 5x a week and will soon go up to daily.

There are clues that CX wish to go above daily on HKG-MAN (e.g. renumbering the flight using non-consecutive numbers).

intothinair wrote:

Hainan Airlines which is technically owned by the Chinese govt.

Huh? How could it be "technically owned by the Chinese government?"

Granted, I'm not well versed in the topic, but I thought the only governmental stake in HU was through the Shenhua Corporation, and that's like 5% or so.

Even if Haikou Airport still has a stake in HU, then that barely doubles the government ownership percentage.

I flew HK Airlines to HKG - AKL and back a couple of months ago and the service in economy was not too dissimilar to what I've experienced on Cathay yet considerably cheaper. Certainly not worth the extra price just to fly Cathay. I'm looking forward to seeing what they can offer to UK.

Well, any airline can get LHR slots if they're willing to pay enough to the other airlines who already control them.

Otherwise new entrant airlines get priority for slot requests for the very small number of unallocated slots, or ones returned to the slot coordinators.Getting slots this way is a chancy business, there may be no slots available anywhere near the time it makes commercial sense to operate the flight.

LAX772LR wrote:

intothinair wrote:

Hainan Airlines which is technically owned by the Chinese govt.

Huh? How could it be "technically owned by the Chinese government?"

Granted, I'm not well versed in the topic, but I thought the only governmental stake in HU was through the Shenhua Corporation, and that's like 5% or so.

Even if Haikou Airport still has a stake in HU, then that barely doubles the government ownership percentage.

I stand corrected. i should have said that they own only a stake of the airline, 8.25% to be exact:


http://www.afr.com/news/chinas-hna-grou ... 531-gp7ykd

intothinair wrote:

I stand corrected. i should have said that they own only a stake of the airline, 8.25% to be exact:

http://www.afr.com/news/chinas-hna-grou ... 531-gp7ykd

The ownership and control of the HNA group is under investigation. https://www.nytimes.com/2017/08/24/busi ... osure.html

There are rumours the related company PAC is being investigated also for sanction busting with North Korea.

HK's profits are from leases on aircraft back to HNA and tour revenues from HNA.

Their hard product is great, but their soft product is still very poor and their IT systems are rubbish. No way are they a so called four star carrier.

This is to be expected. No surprise here. From the time it ordered 20+ A350, we all know it's going long haul.

It focuses more on connection traffic from China though, while CX is more balanced on O&D, connection from SE Asia/Taiwan, Australia and China.

Personally, I am not interested in flying HX on Economy. Other airlines undercut CX's prices on many routes already. HX offers one more option, but not a more competitive one from pricing perspective. For example, its Economy Class price on LAX is not that attractive compare to AA's. However, if it offers good Business Class price on long haul, I will gladly try it. For example, typically I can get Business Class on HKG-YYZ at about USD3500 (on either AA or UA). If HX can offer that price (or lower) with non-stop service, then we are talking.

Timing and frequency of flight is important too. In the market HX is entering now (LAX, NYC, LON, etc.), CX is offering multiple daily flights, which is more attractive for connecting pax, high yield business pax and even people who don't mind to pay a little more to maximize the use of their vacations.

CX will definitely feel the heat, but it's not too bad yet. It may cause CX to accelerate putting in 3-4-3 seating on its 77W, to lower its per-seat price for long haul though.

Wonder if they would ever launch GVA services against CX in ZRH.
HKG is a target market from GVA anyway.

Given the constant chatter about CX and SEA, I wonder if HX should beat them to the punch at that route. Their parent company, HU, is already well-established in SEA, and HX could get feed in SEA from AS to support the flight.

I'll believe it when I see it. There's no way CX has any major issues with them as they stand now.

I wouldn't be surprised they would inaugurate service to SEA...if CX doesn't do it first.

Competing on HKG-LON is suicidal now with CX 5 daily, BA 2 daily and VS daily. In addition the same can be said about NYC-HKG and to an extent SFO-HKG.

I would rather see them focus on niche markets such as HKG-IAD, HKG-SJC, HKG-IAH and HKG-LAS nonstop where no one currently flies and there is decent P2P demand along with transfer traffic potential to be tapped into.

717atOGG wrote:

Given the constant chatter about CX and SEA, I wonder if HX should beat them to the punch at that route. Their parent company, HU, is already well-established in SEA, and HX could get feed in SEA from AS to support the flight.

That would be interesting since AS already has a codeshare agreement with CX.

raylee67 wrote:

CX will definitely feel the heat, but it's not too bad yet. It may cause CX to accelerate putting in 3-4-3 seating on its 77W, to lower its per-seat price for long haul though.

...and alienate loyal customers who fly CX for the very reason that their planes do not look like sardine cans! I like CX,have always chosen them when traveling to HKG or elsewhere in South China, but if (when?) they go 10-abreast I will give HX a try.

behramjee wrote:

Competing on HKG-LON is suicidal now with CX 5 daily, BA 2 daily and VS daily. In addition the same can be said about NYC-HKG and to an extent SFO-HKG.

I would rather see them focus on niche markets such as HKG-IAD, HKG-SJC, HKG-IAH and HKG-LAS nonstop where no one currently flies and there is decent P2P demand along with transfer traffic potential to be tapped into.

I read rumors in another thread that VS will end HKG and codeshare on their flight to London instead once it starts flying the route. If that's true and since Virgin Australia is also pretty close with them (HNA group holds some shares of VA), I can see the route might actually work for them.

You can see the current strategy for Hong Kong Airlines long haul is basically entering CX market and offer much lower price (YVR, AKL, LAX), so honestly I'm not surprised to see these 3.

behramjee wrote:

Competing on HKG-LON is suicidal now with CX 5 daily, BA 2 daily and VS daily. In addition the same can be said about NYC-HKG and to an extent SFO-HKG.
.

Actually, I see it as the opposite.

They are going after many of the the top O&D markets from HKG - Australia, YVR & LAX and now talking about JFK, SFO and LON.

There is a clearly big demand to these markets, and HX should clearly be able to earn a share of the traffic pie.

workhorse wrote:

raylee67 wrote:

CX will definitely feel the heat, but it's not too bad yet. It may cause CX to accelerate putting in 3-4-3 seating on its 77W, to lower its per-seat price for long haul though.

...and alienate loyal customers who fly CX for the very reason that their planes do not look like sardine cans!

And who are those "loyal" customers then going to run to, as CX will then just be matching EVERYONE else with that configuration other than DL?

mercure1 wrote:

There is a clearly big demand to these markets, and HX should clearly be able to earn a share of the traffic pie.

That was never in question. The issue is, at what COST would it get that share?

CX/BA/etc aren't just going to sit there and welcome them with open arms. Does it really do HX any good to enter the largest markets, only to be bled dry on bottom-barrel fares due to fierce competition?

Or enter secondary markets as first-mover, where it could have some pricing leverage, while building both experience and name recognition for longhaul operations. I guess we shall see.

patrickw421 wrote:

I read rumors in another thread that VS will end HKG and codeshare on their flight to London

Why do people make posts like this, but then not state WHERE they got it from?

I mean, who started the "rumor"... the bag-lady who lives in the airport parking lot?

behramjee wrote:

Competing on HKG-LON is suicidal now with CX 5 daily, BA 2 daily and VS daily. In addition the same can be said about NYC-HKG and to an extent SFO-HKG.

I would rather see them focus on niche markets such as HKG-IAD, HKG-SJC, HKG-IAH and HKG-LAS nonstop where no one currently flies and there is decent P2P demand along with transfer traffic potential to be tapped into.

I agree. LON especially is a strong oneworld route and not for the faint hearted long haul novice. Besides, where would they get the slots if they wanted to serve the likes of LHR? Maybe they could go for STN that said...

workhorse wrote:

raylee67 wrote:

CX will definitely feel the heat, but it's not too bad yet. It may cause CX to accelerate putting in 3-4-3 seating on its 77W, to lower its per-seat price for long haul though.

...and alienate loyal customers who fly CX for the very reason that their planes do not look like sardine cans! I like CX,have always chosen them when traveling to HKG or elsewhere in South China, but if (when?) they go 10-abreast I will give HX a try.

A good point. HK Airlines' 9-across A359s can provide strong competition to CX where they fly their 10-across B77Ws.

LAX772LR wrote:

CX/BA/etc aren't just going to sit there and welcome them with open arms. Does it really do HX any good to enter the largest markets, only to be bled dry on bottom-barrel fares due to fierce competition?

Or enter secondary markets as first-mover, where it could have some pricing leverage while building both experience and name recognition for longhaul operations. I guess we shall see.

Then go ask Virgin Atlantic why it first launched New York, then Miami, then Los Angeles etc.

Going after the big routes is logical for HX, particularity today when CX is increasingly vulnerable.

Keep in mind HX is not some random or small unknown entity. They already have a rather dense network, are the 2nd largest airline at HKG after CX/KA, have a customer base and affiliation with fellow HNA carriers via Fortune Wings FF program, plus have partnerships many foreign airlines. In other words, ever increasing scale of economy to help make longhaul work.

Ugly51 wrote:

Hong Kong Airlines will need to up there game. Particularly their Inflight service in Business and Economy class.
I have flown on both airlines out of Hong Kong, the Cathay service is far superior.
But again its always good have fair competition.

Hahaha, HX and fair competition in the same sentence!

TheLion wrote:

workhorse wrote:

raylee67 wrote:

CX will definitely feel the heat, but it's not too bad yet. It may cause CX to accelerate putting in 3-4-3 seating on its 77W, to lower its per-seat price for long haul though.

...and alienate loyal customers who fly CX for the very reason that their planes do not look like sardine cans! I like CX,have always chosen them when traveling to HKG or elsewhere in South China, but if (when?) they go 10-abreast I will give HX a try.

A good point. HK Airlines' 9-across A359s can provide strong competition to CX where they fly their 10-across B77Ws.

CX will be operating the A359 to SFO by October this year and already fly the A359 to the London area and the A359 will be in Newark next year.

LAXintl wrote:

Then go ask Virgin Atlantic why it first launched New York, then Miami, then Los Angeles etc.

From a secondary airport, which partially shielded them from the full brunt of competition, despite their protestation.

Not exactly a glaring refutation of my point....

When you add in the Virgin Australia routes ex HKG (which is basically HX using Australian capacity due to the maxed out bilateral), they are really going after CX.

I wonder if HK Airlines will fly to LGW or LHR.

Otherwise, SFO and LAX will become even busier from HKG. I think CX flies three daily to SFO, and UA and SQ both serve SFO seven weekly. Now HK Airlines will be the fourth airline on the route.

I think CX flies four weekly from HKG to LAX, while AA flies seven weekly. HK Airlines has also annouced LAX quite a while back.

CX is doing pretty badly financial right now, but I'm sure they'll be fine and survive. This won't kill them.

According to last year's report, HX said that they will open flights to the following destination in the following years:
2016: OOL CNS AKL
2017: YVR LON NYC
2018: SFO LAX
2019: CDG MEL SYD
2020: MXP ORD CHC

Additionally, the route map being presented also include two dots for MRU, SVO and HNL although they aren't connected to HKG

workhorse wrote:

raylee67 wrote:

CX will definitely feel the heat, but it's not too bad yet. It may cause CX to accelerate putting in 3-4-3 seating on its 77W, to lower its per-seat price for long haul though.

...and alienate loyal customers who fly CX for the very reason that their planes do not look like sardine cans! I like CX,have always chosen them when traveling to HKG or elsewhere in South China, but if (when?) they go 10-abreast I will give HX a try.

This is not an "if" question. It's confirmed.
http://www.scmp.com/news/hong-kong/econ ... 10-abreast

For bargain hunting Economy Class passengers (who would be the primary target if HX decides to compete with price), they don't really care if the 77W is configured 3-4-3 or 3-3-3. Regulation aside, if an airline decides to introduce all standing space and only charge $200 for a trans-Pacific flight, those bargain hunting passengers will immediately go to that airline and stand for 15 hrs. I have known too many people who have told me how tight the Air Canada seat is on HKG-YVR and when I ask them if they would fly CX next time, they immediately said AC is cheaper.

Many occasional flyers who may be willing to pay a bit more for 3-3-3 rather than 3-4-3 unfortunately do not even have the knowledge that some airlines are flying with 3-3-3 and the others are flying 3-4-3. The problem is both are called "Economy Class", and that's the only thing they see when they buy the tickets.

To compete with HX, CX will need to
(1) lower its per-seat cost in Economy (which makes 3-4-3 inevitable) so it can match HX's price on Economy, and
(2) improve its Premium Economy (now that class really sucks compare to Premium Economy of airlines such as EVA Air or even Air Canada) to move Economy passengers who are willing to pay more up to Premium Economy
(3) keep constantly refreshing its long haul Business Class, which it has been doing

behramjee wrote:

Competing on HKG-LON is suicidal now with CX 5 daily, BA 2 daily and VS daily. In addition the same can be said about NYC-HKG and to an extent SFO-HKG.

Don't forget, CX are actually 6 daily to London. They have 5 flights into LHR and 1 flight into LGW.

raylee67 wrote:

This is not an "if" question. It's confirmed.
http://www.scmp.com/news/hong-kong/econ ... 10-abreast

I know that, but it's not too late for CX to change their mind. This announcement has been made almost a year ago, since then, leadership has changed... I know they are reading this forum, so here's the message for them: once there's nothing left distinguishing you from the low-costers, people will rather fly with them than with you.

raylee67 wrote:

For bargain hunting Economy Class passengers (who would be the primary target if HX decides to compete with price), they don't really care if the 77W is configured 3-4-3 or 3-3-3. Regulation aside, if an airline decides to introduce all standing space and only charge $200 for a trans-Pacific flight, those bargain hunting passengers will immediately go to that airline and stand for 15 hrs. I have known too many people who have told me how tight the Air Canada seat is on HKG-YVR and when I ask them if they would fly CX next time, they immediately said AC is cheaper.

Yes, unfortunately, I know quite a bit of such people as well. But why compete for them at all? Leave them to the LCCs, fly smaller planes (e.g. A350-900) with better comfort and charge slightly higher prices (let's say, 20-30% more). It will work!

raylee67 wrote:

Many occasional flyers who may be willing to pay a bit more for 3-3-3 rather than 3-4-3 unfortunately do not even have the knowledge that some airlines are flying with 3-3-3 and the others are flying 3-4-3. The problem is both are called "Economy Class", and that's the only thing they see when they buy the tickets.

Yes, and this is why we, - the people who know and who care, - must talk about it as much as possible, giving the airlines who go 3-4-3 in the 777 and 3-3-3 in the 787 as much bad press as possible, so that hopefully some day they feel the consequences with their wallet.

raylee67 wrote:

To compete with HX, CX will need to
(1) lower its per-seat cost in Economy (which makes 3-4-3 inevitable) so it can match HX's price on Economy, and
(2) improve its Premium Economy (now that class really sucks compare to Premium Economy of airlines such as EVA Air or even Air Canada) to move Economy passengers who are willing to pay more up to Premium Economy
(3) keep constantly refreshing its long haul Business Class, which it has been doing

I don't want premium economy. I want normal economy, you know, the one that used to be the standard about 10 years ago. If a can't get it with CX, then my next HKG-SFO run will be with HX. And if, for some reason, I don't like them, I will go one-stop with JL or KE. And will tell all people around me to do the same.

intothinair wrote:

It states in the article that they have 21 A350s on order. Wonder if they will be opening any additional intercontinental routes over the coming months. Targeting other large hubs that are currently underserved could work. Some examples i can think of include Munich, Dallas or even Manchester.

Hong Kong Airlines has also additional A330s incoming. All together it has like 30 additional widebody aircraft incoming.

Quite the expansion.

What is CX outlook with JVs to EU and North America? They seem to have lots of room to grow in their partnerships.

airzona11 wrote:

What is CX outlook with JVs to EU and North America? They seem to have lots of room to grow in their partnerships.

They certainly won't be entering an ATI JV with the US. Hong Kong does not have open-skies with the US.

For partnerships personally, I see something playing out with Air China one way or the other long term with CA having a growing 30% stage in CX.

workhorse wrote:

with better comfort and charge slightly higher prices (let's say, 20-30% more). It will work!

Based on what?
History tells a completely opposite story.

workhorse wrote:

I don't want premium economy. I want normal economy

No airline cares what you "want"... they care what you'll PAY FOR.

raylee67 wrote:

This is to be expected. No surprise here. From the time it ordered 20+ A350, we all know it's going long haul.

A large part of their business is leasing frames to HNA group airlines in mainland china, the HKG subsidiary can get around the CNAC limitations. One cannot assume any order they make will remain with the airline. Mainland china is a closed market without a lot of competition, they may make more money by placing them with other HNA group airlines. HKG is very competitive with high costs stemming from high land prices.

raylee67 wrote:

CX will definitely feel the heat, but it's not too bad yet. It may cause CX to accelerate putting in 3-4-3 seating on its 77W, to lower its per-seat price for long haul though.

I am not sure the long haul aircraft will be 10 across, I thought it will be regional aircraft, like the ones that have 7 across in business.

Guys... I'm worried about all of this CX and HX expansion. HKG is already operating at near capacity with only 2 runways. If all these destinations come online, it will only make HKG's abysmal ATC delays even worse....

theasianguy wrote:

Guys... I'm worried about all of this CX and HX expansion. HKG is already operating at near capacity with only 2 runways. If all these destinations come online, it will only make HKG's abysmal ATC delays even worse....

What they will do is trade loss making regional slots for the long haul flights. As you said the airport is near capacity.

ATC in HKG is not all that bad. Most of the restrictions come from Chinese airspace restrictions both on arrival and departure.

Chinese ATC will often dump numerous arrivals from
the north and west at the same time and leaves it up to HKG to work out how to arrange the arrival sequence.

In the opposite direction Chinese ATC would never allow HKG to send as much traffic as it likes into their airspace, the wait can be hours. Current NOTAMs has flow control into China at 150+ minutes, but that does not apply to Chinese carriers.

HKG is fair, unlike other airports in the region that give advantage to the home carriers. Local HKG carriers don't get special ATC treatment. The only thing ATC will allow is for two aircraft to swap in the sequence.

I head another carrier being asked to hold for 2 hrs entoute before even reaching HKG airspace due to flow control.

I pity anyone flying to Beijing over the next two months - the national conference is on, and this causes chaos for aviation in the lead up.

I once sat for 90 minutes in shenzhen for the prime minister of Romania to be VIPd through the airport tarmac onto his Tarom relic jet.

To be honest, i am a little bit surprised why HK Airlines didnt go for 10 abreast in economy, similar to Air Caraibes. Could have been easily done, and 90% of consumers dont care or notice anyways. What HK Airlines must do is undercut CX on rock bottom Y fares, and 10 abreast would help them considerably, similar to the way CX is going 10 abreast on the 777s. I wouldnt care about 1.5 inch less width, but i would care for a 100 dollar cheaper flight. I have seen Air Caraibes video reports and that 16.5 inch width doesnt look too shabby. Bring it on HK Airlines!

BestWestern wrote:

I pity anyone flying to Beijing over the next two months - the national conference is on, and this causes chaos for aviation in the lead up.

I once sat for 90 minutes in shenzhen for the prime minister of Romania to be VIPd through the airport tarmac onto his Tarom relic jet.

A 90 minute delay is essentially on time when it comes to ex-China delays. PVG and PEK both routinely see delays of 5+ hours.

MoonC wrote:

Wonder if they would ever launch GVA services against CX in ZRH.
HKG is a target market from GVA anyway.

In an aeroTelegraph interview publisihed on 30.06.2017 ( in German only ), Mr Bria Tsoi, Manager D/CH/Eastern Europe says they are looking at expansion and additional destinations in Europe and particularly D and CH. For Switzerland, GVA would be the obvious additional destination, although I can't help thinking that they'd rather increase their ZRH capacity. According to anna.aero fligures, GVA had 43000 indirect passengers in 2016, so if DUB with 40000 passengers ( same source ) can get 4 direct flights, GVA should also stand a chance of seeing CX around in the near future. Don't know about Hongkong Airways, I really think CX would stand a better chance of turning such a route into a success. Does anybody know if GVA airport authorities negotiate with CX or Hong Kong Airlines ?