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Cathay Pacific & Swire - Under Pressure...

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  1. #181

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    Quote Originally Posted by shri:
    Many have also switched because their companies have insisted on them doing so.

    Cathay is in a very tough situation.
    The more interesting question is who ordered those companies not to fly their staff on CX? Beijing, of course. Long-term, Beijing may come to regret their decision to take down CX, as that will hurt HK overall. As a financial centre, HK requires a home carrier with a good network of routes to connect to the rest of the world in order to facilitate business, cultural or academic exchanges. Take that away, and HK becomes very much a backwater. Is that what Beijing wants?

    Air China, as a shareholder of CX, could easily takeover CX from Swire in theory, but as a SOE, do they have management expertise to operate a carrier according to market principles and customer service? I am a little doubtful. Air China got to where they are not because of their able management or business acumen, but simply because it was designated a national carrier and showered with preferential treatment from Beijing. They operate to political demands of Beijing far more than even CX. So we may end up with routes to god forsaken places where it makes little sense commerically, but must do so because of Beijing orders, like Ashgabat or Kinshasa. While major routes to traditional hubs like London, New York, Vancouver or Sydney is under-served or cancelled out right beause of political dispute Beijing has with those countries.

    Besides, HK would be reduced to a mere regional airport where travelers have to transit to Shanghai, Beijing or Guangzhou to fly to Toronto or Paris. Yes, those major mainland airports are reaching capacity limits, but you must remember they see HK as a rival competitor and would rather see HK fail than let them take up the extra demand they cannot meet.

    So all in all, Bejing's move to take down CX would only harm HK overall. Unless that is what Beijing want all along, take a rebellious HK down a peg and reduce them to a mere backwater. Beijing can do so, but that would further damage their international reputation. It will send a signal that Beijing cannot govern a thriving city with basic freedoms and instead drove it to the ground. Taiwan sure will see that as a cautionary tale.
    Mefisto likes this.

  2. #182

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    Quote Originally Posted by Coolboy:
    It will send a signal that Beijing cannot govern a thriving city with basic freedoms and instead drove it to the ground. Taiwan and the Chinese middle classes sure will see that as a cautionary tale.
    Corrected it for you

  3. #183

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    Quote Originally Posted by East_coast:
    Corrected it for you
    The Chinese middle class should not feel so complacent, HK is the only place in China where their capital can be moved relatively easily, if Beijing makes it hard for them to travel there, their interest may be hurt...

  4. #184

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    Quote Originally Posted by Coolboy:
    The more interesting question is who ordered those companies not to fly their staff on CX? Beijing, of course.
    More likely it is the cost control measures enforced by bosses looking at business revenue drop 20% this quarter.... and.... then to drop further 25% next quarter

    My team administrator just got orders to reduce travel costs by 20%... by hook or by crook.... and airline tickets are the easiest cherry to pick
    Last edited by LifeInHK; 15-09-2019 at 09:41 AM. Reason: typo
    East_coast likes this.

  5. #185
    Quote Originally Posted by Coolboy:
    The more interesting question is who ordered those companies not to fly their staff on CX? Beijing, of course. Long-term, Beijing may come to regret their decision to take down CX, as that will hurt HK overall. As a financial centre, HK requires a home carrier with a good network of routes to connect to the rest of the world in order to facilitate business, cultural or academic exchanges. Take that away, and HK becomes very much a backwater. Is that what Beijing wants?

    Air China, as a shareholder of CX, could easily takeover CX from Swire in theory, but as a SOE, do they have management expertise to operate a carrier according to market principles and customer service? I am a little doubtful. Air China got to where they are not because of their able management or business acumen, but simply because it was designated a national carrier and showered with preferential treatment from Beijing. They operate to political demands of Beijing far more than even CX. So we may end up with routes to god forsaken places where it makes little sense commerically, but must do so because of Beijing orders, like Ashgabat or Kinshasa. While major routes to traditional hubs like London, New York, Vancouver or Sydney is under-served or cancelled out right beause of political dispute Beijing has with those countries.

    Besides, HK would be reduced to a mere regional airport where travelers have to transit to Shanghai, Beijing or Guangzhou to fly to Toronto or Paris. Yes, those major mainland airports are reaching capacity limits, but you must remember they see HK as a rival competitor and would rather see HK fail than let them take up the extra demand they cannot meet.

    So all in all, Bejing's move to take down CX would only harm HK overall. Unless that is what Beijing want all along, take a rebellious HK down a peg and reduce them to a mere backwater. Beijing can do so, but that would further damage their international reputation. It will send a signal that Beijing cannot govern a thriving city with basic freedoms and instead drove it to the ground. Taiwan sure will see that as a cautionary tale.
    What Beijing wants is for Shenzhen to take over the region, it's not like it's a secret.

  6. #186

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    Quote Originally Posted by William06:
    What Beijing wants is for Shenzhen to take over the region, it's not like it's a secret.
    Shenzhen cannot replace HK because of capital control. It is a growing hi-tech hub, but even so, it does rely on HK to raise a lot of capital from investors.

  7. #187

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    Quote Originally Posted by LifeInHK:
    More likely it is the cost control measures enforced by bosses looking at business revenue drop 20% this quarter.... and.... then to drop further 25% next quarter

    My team administrator just got orders to reduce travel costs by 20%... by hook or by crook.... and airline tickets are the easiest cherry to pick
    Either way, Beijing cannot escape some responsibility for the business downturn caused by the protests and the current plight of CX. Had the current political governing model been more reflective and representative of HK people, the extradition bill would never have been made. CX would not find itself in this position. And so on. It's a chain of causation that ultimately leads back to Lam, the HK government and Beijing.
    Gatts likes this.

  8. #188

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    Quote Originally Posted by Coolboy:
    Air China got to where they are not because of their able management or business acumen, but simply because it was designated a national carrier and showered with preferential treatment from Beijing.
    Doesn't that sound very much like CX according to what we hear from the forumers (prior to the recent crisis), a bloated high cost airline where the management doesn't understand much about running a premier airline ... surviving only because HK SAR govt is protecting its status as the SAR's only airline ?
    shri, East_coast and Fiona in HKG like this.

  9. #189

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    Quote Originally Posted by freeier:
    Doesn't that sound very much like CX according to what we hear from the forumers (prior to the recent crisis), a bloated high cost airline where the management doesn't understand much about running a premier airline ... surviving only because HK SAR govt is protecting its status as the SAR's only airline ?
    True, but it's a matter of degree. CX is still nominally a commerical company accountable, at least partially, to shareholders. Not so Air China. They are a SOE without even needing to pretend to adhere to market principles.

  10. #190

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    No need to fly business class if you can get the "poor man's" business class of three seats- my strategy for flying home to visit family, it's been working so far (well, one time I only got two seats but made it work).

    Morrison likes this.

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