[IanFromHKG]

KSHaggag – 16/08/2015 17:51 BST : IanfromHKG ..do you have the Revenue Management contact of CX in HKG

Sorry, no – but if you tell me why you want it I might be able to find a contact as I have several friends in Swire

[KSHaggag]

Thanks Tomyam42.

Thanks Ian from HKG !

Actually it s just for Tomyam42 s issue .I feel one ought to clarify to CX that they are losing revenue in MNL given the bizarre pricing policy reflected on the fares ,putting CX largely at a disadvantage vs QR for example .I don t think CX is too happy to lose Business Class revenue ..
Thank you .

[IanFromHKG]

I think that might be to do with the destination rather than the origin. Flights from MNL to Europe are very cheap – in fact I am thinking of booking one myself, since they are so much cheaper than flights originating from HKG! – and I don’t want to mess that up!!

[KSHaggag]

I respect your point but I am astonished at the extortionate fares Tomyam42 came across.

[AMcWhirter]

Garuda is now being urged by the Indonesian govt to cancel its fleet expansion plans.

A govt mininister claims that Garuda’s European flights operate with only a 30 per cent load factor.

http://www.thejakartapost.com/news/2015/08/13/rizal-ramli-urges-garuda-cancel-airbus-a350-purchase-plan.html

[KSHaggag]

Thank you Alex for the news yet they are indeed bad .

[KSHaggag]

I cannot hold my breath and not comment harshly on such a decision that I describe as irrational !
Garuda should not have expanded into Europe now ;that was a bad decision ,however they should have grown their regional network first then looked at Europe .On the axis to London and Amsterdam they are competing with well established carriers ,however in Asia the traffic is higher and they ought to offer a better coverage .
Go strengthen your network where you can be unique first .
I hVe always had the feeling that a lot of decisions taken by the Indonesian carrier were not the right ones and here we are ….are they planning to shrink again and become regional ? Domestic ?
They upgraded their image so why such bad management of things now ?!!!it is infuriating to see such a good product ,starting to prove to the world it is world class being jeopardized by bad politics ….
They need a fleet to fly more to Australia ,Far East and South East Asia as well as Abu Dhabi …

[TominScotland]

You may be right, KSHaggag, about focusing on regional markets but the competition is crazy!! I am currently in Vietnam and the ‘pop-ups’ on my system are constantly offering me flights to Singapore (for example) for as little as $2!!! Australia from Hanoi on Air Asia shows from about US$130. I am not sure how a full-service airline can compete effectively in what is a cut-throat and very price sensitive market like this.

[GenerationY]

Hello all,

As a young Indonesian national who had lived around ASEAN and (currently) EU, I cannot help but to comment on this thread. If you know the politic in Indonesia, although it is getting much better, some ministers are still clowns. The same goes to the maritime minister that said Garuda should cancel the a350. He, also had stick his nose in the way the current Jakarta governor’s (the best one jakarta has ever had) works. The president and miniser of economic and commerce had called out to him to stop being what Singaporean says ‘Kiashu’ which is a person who like to involve him/herself in others business without any knowledge of what happening. So my advice, ignore him and the news.

Secondly, I cannot help but to notice that most of you here refer to ASEAN (TG, MH, GA, SQ, VN) carriers as Asian. In my observation, the distinction in term of business model is about to change drastically given that ASEAN Is about to implement ASEAN Economic Community ala EEA and ASEAN open skies by year end. Such policies will mean any ASEAN carriers have the right to fly to any point in ASEAN countries. As you can imagine, competition is about to get fierce as national carriers will not have the same protection from their national government as they currently do. Therefore, for ASEAN carriers ME3 are not their top worries.

In the next decade of ASEAN open skies and AEC, I think there will be mergers. We will see a giant airlines companies concentrated in the region being formed. The weak will be swallowed by the strong or the handsome will marry the beauty/the handsome. Who is going to marry who? No one knows, but some speculate SQ and GA will. The logic, Indonesia is 4th most populous nations on earth and set to be world’s 7th economic power by 2030.

For SQ, Indonesia is their “domestic market.” SQ has been pushing in Indonesia strongly with co-brand credit card with BCA, where the Indonesia’s wealthiest usually do their banking. Furthermore, Indonesians still rely mostly on SQ for long haul. But, Indonesian has started to switched back to GA, something that SQ worries. A decade ago, GA was not a threat to SQ. now, it is one of the biggest threat, marrying GA would mean SQ will secure Indonesia and able to tap to ASEAN biggest market. Therefore, assuring their existence.

While for GA, despite of the transformation, for them to win the long haul market would still take a while. Patience and lots of marketing are required. But even if they win the Indonesian market back, They know that SQ has a vast network to the world from SIN and require no back tracking for almost 90% of Indonesian to all corners of the world except Australia and NZ. Therefore, travelling to the world would make sense for most Indonesians via Changi than via Soekarno-Hatta. Lastly, most of Indonesian richest reside in Singapore and fly with SQ, marrying SQ will mean those will also be ‘coming home’ to GA and GA will not need to worry when the 90% of the Indonesian realised traveling to the world via SIN made much more sense.

By combining the two, both SQ and GA, will make sure that they secure the Singaporean and Indonesian market (most developed and biggest economic in ASEAN). But of course it is still a speculation.

While for East Asian carriers (china, S Korea, Japan, Taiwan) in general, ME3 would be irrelevant. Given that flying to EU (where ME3 is concerned) all ME3 hubs require backtracking.

Furthermore, Asia should not be compared to EU as Asia is much bigger. Intra Asia travel is on the rise and almost all (if not all) part of Intra Asia (and ANZ) travels do not go as far as ME3 hubs. Given the rise of China, India and ASEAN, Business travel for Asian businesses in the future will mostly be between China, S. Korea, Japan, India and ASEAN (perhaps Australia and ANZ) which all do not go via ME3 hubs. This is the reason why Asia’s carriers said regional and medium markets are the profitable ones.

All in all, although the ME3 currently play a part in ASEAN airlines’ financial health, they do not pose a big threat for the future of the ASEAN carriers. Therefore, I wouldn’t say ASEAN (and Asian) carriers are in distress by ME3. They are in distress by big 4 local LoCo (Air Asia, Lion Group, JetStar, Tiger group) and their neighbouring national carriers.

Personally, as I reside in NL, I always fly with SQ to ASEAN and KL for Intra Europe and USA. I really wish if SQ and GA marry they switch to SkyTeam as SkyTeam is more generous, more innovative and more organised than Star. (Wishful thinking).

Cheers. 🙂

[paulkaz]

Terima kasih GenerationY. Very interesting post.

[KSHaggag]

Hi GenerationY ,

Thank you for your analysis .As a matter of fact ,i could not give myself the right to blame politics in Indonesia as I am a foreigner but I knew things were that messy and that they are playing more on politics rather than on business consideration …Pity !
Well.., as I was reading your post and suggestion of SQ marrying GA ,I was thinking of the Alliance issue .Skyteam members are indeed more sealed together than STAR but let me highlight that as much as SQ is a FANTASTIC airline that I love and admire ,as much as they keep their distance and do not cooperate well with their so called partners ,let alone ” spouses ” …
GA needs to expand regionally and in Down Under as that is where the money spinning will take place .They are positioning themselves as a Premium carrier so forget about Air Asia and LCCs .They want to be here to compete with SQ,CX,TG,MH,KE,JL,NH,OZ ,etc for the rich pickings that SQ for example is enjoying in Indonesia .SQ in Indonesia is doing like KLM in UK with a powerful transfer hub outside their home for the Indonesians and the UK nationals ( SIN and AMS vs CGK and LHR respectively ) ,however as you said ,the Indonesian market is huuuuuuuuuuuuuuuuge and there is still potential for quality carriers to dig into the market and secure their lucrative business .
Cheers back !!

[AMcWhirter]

GenerationY –

Garuda still has a lot to learn when it comes to informing passengers about flight alterations and so on.

http://www.businesstraveller.com/discussion/topic/Garuda-Indonesia-B777-300ER

[KSHaggag]

I do agree with you ,Alex !

Given the politics that master the situation there ,I would imagine that doing business the right way is indeed challenging for GA .It is indeed great already that they have managed to prove that they can be a World Class Airline in the inflight service arena and to some extent on the ground .

[JohnHarper]

Further to a point made earlier about SQ pricing, we’ve just priced a trip to BKK for February. Flying in C for two the fare came in on every airline we priced within a couple of hundred of £3500. Just to see what happened we priced SQ and it came in at £7900!

This was for an LHR departure.

[KSHaggag]

You might have fallen on busy flights with SQ !! Maybe also their winter market fares in UK have not yet been loaded ..

[Author]

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