The Venetian Republic and the British Empire built their economies on ocean trade. Dwindling naval power heralded their decline and fall.
It's a thought that should provoke a shiver of recognition in Hong Kong and Singapore, given the way their airborne fleets of Cathay Pacific and Singapore Airlines are falling victim to a new Great Power struggle.
The two carriers have long been tied up with the destinies of Asia's great trading cities. When the Boeing 747 shrank the world in the 1970s, it was Cathay and Singapore Airlines that connected the wealthy population centers of Europe, North America and Japan with Asia's emerging economies.
That helped transform their home territories from backwaters surrounded by a wilderness of poverty into global hubs of banking and commerce.
Those times are gone, and the new world order is looking markedly less friendly – both to the entrepot cities, and the airlines that link them to the world.
From pioneers to prey
Singapore Airlines and Cathay Pacific were pioneers of long-haul travel. In their heyday, both lost little sleep worrying about their rivals in China and the Persian Gulf.
Nowadays, they can't afford not to: China Southern, China Eastern, Air China Emirates and Qatar Airways all exceed them in capacity terms, and Etihad is rapidly catching up.
That's left the two cities' airlines exposed. Long-haul international aviation is a cut-throat business, and its best practitioners historically have had either state support or an easily dominated domestic market at their backs.
Cathay Pacific and Singapore Airlines have never had the latter, and it's a hotly contested debate whether they benefit from the former – especially when compared with their aggressive new state-owned competitors.
Disadvantage of geography
Crushed between the tectonic plates of the Chinese and Gulf carriers, the cities' airlines are also geographically disadvantaged.
Two-thirds of humanity lives within an eight-hour flight of Emirates' base in Dubai, making it particularly well-placed to link global travelers.
Qantas' 2012 deal with the Gulf carrier, which saw it give up connections via Singapore to serve a wider array of European destinations through the Gulf, is a warning that geography is destiny for airlines.
While the carriers try to fight a rearguard action against this – see Singapore Airliness flights to Houston via the English city of Manchester, or the nonstop polar trips to Newark it plans to restart next year – they are working from a position of weakness.
With ultra-long-haul jets such as the Boeing 787 and Airbus A350 opening up unheard-of routes such as direct Perth-London flights, and Chinese airlines hitting their stride, the old roles connecting Asia to Europe and North America are disappearing.
Where they still have an advantage – using the hub-and-spoke model to fill more seats on planes, thus improving profitability – the Gulf carriers' geographic advantage means Emirates and Qatar can do it better.
The short-term solution is likely to be local.
Local heroes?
Cathay Pacific may hand more routes to its regional affiliate Cathay Dragon, while Singapore Airlines has gone in a similar direction, doubling passenger capacity at its regional SilkAir unit in the seven years through 2016 while the measure stood still at its core long-haul business, and adding low-cost brands in the form of Tiger Airways and Scoot.
That's a high-stakes strategy, though, because regional routes are where budget carriers come into their own. Ryanair, EasyJet and Wizz Air now constitute three of Europe's top five airlines by market capitalization.
Tony Fernandes is working to repeat the trick in Cathay pacific and Singapore Airlines' backyard with AirAsia. In a race to the bottom, do the marquee airlines of Hong Kong or Singapore really want to be the winner?
Qantas - Qantas Frequent Flyer
18 Jun 2015
Total posts 57
These two cities are amazing destinations in and of themselves which could not be matched by the Gulf, so I think the appeal of a stopover in SG or HK is always going to be greater and these cities have business travellers of their own who will still fly their home carriers.
05 Oct 2017
Total posts 520
It's true that SIN and HK are great destinations in and of themselves but it's also even more significant that they are great launching pads for trips to fascinating neighboring countries like Malaysia and Indonesia, mainland China, Macau, Taiwan and Vietnam. A large number of travellers stopover in these cities with the aim of holidaying in the latter mentioned countries. Whereas in the Middle East, Dubai, Abu Dhabi and Qatar are your destinations. No one holidays in Saudi Arabia, Oman is unpopular, very few venture to Iran, while Iraq, Afghanistan, Yemen and Syria are off-limits due to war. Israel can't be reached from any middle eastern country except Jordan. So your options in the middle East are limited to staying in the country you landed in and then continuing to Europe, whereas in SIN and HK, a short bus, train or ferry ride brings you to large neighboring countries, within 2-3 hours flying time you can reach almost anywhere in East Asia (i.e. Thailand, Vietnam, Cambodia, Myanmar and Indonesia from SIN and any major east coast Chinese city, Vietnam, the Philippines, Taiwan, South Korea and southern Japan from Hong Kong).
Virgin Australia - Velocity Rewards
01 Aug 2012
Total posts 1
The answer for Asian based airlines like CX and SQ is further consolidation across the Asia Pacific region. Replicating the European model where IAG , AF/KLM and Luftansa group have consolidated airlines into one parent company is an obvious solution. Cathay should consider a merger or acquisition of Malaysian or other close partner. There are too many LCC players and legacy carriers in Asia and there must be consolidation similar to Europe and the USA in order for them to become profitable again. It's time to swallow national pride and start deeper relationships beyond a joint venture.
31 Mar 2016
Total posts 621
@tscruby:
20 May 2015
Total posts 581
HK and Singapore are both high-yield premium destinations. What both airlines need to do is focus on this. High-volume low-yield traffic should be let go of.
31 Mar 2016
Total posts 621
@StudiodeKadent:
But demand fm this segment is precisely where the mkt is growing fastest in recent yrs and projected to continue in the future especially relative to the premium segment.
13 Nov 2015
Total posts 49
StudiodeKadent: Good analysis. I personally would stick with a carrier such as CX even with a stop as long as the quality is retained. I like the CX crews, the service and reliability. But the odds in this age are indeed stacked against them with Beijing's hand playing a big part in this in favour of the Communist Big Three. It's a sad thing. Nothing lasts forever, nothing ever has in human terms. I wish CX well as I do SQ and even QF as they have no guarantees of holding out against the coming point-to-point revolution. The A350ULR will buy SQ some time and I think QF will have to act quickly on which aircraft they want for their point-to-point future.
24 Sep 2017
Total posts 7
Don’t buy it. Armchair analysis.
03 Sep 2017
Total posts 49
I like SG & HK for connection because of the wider infrastructure aspect of these 2 cities. Because they have great public transport servicing the airport to the city centre, I find myself planning longer hours of stopover (less than 24 hours) just to do things. Plus with the no visa required entry, it's free and easy to enter the country just for that brief stopover.
Qantas - Qantas Frequent Flyer
21 Jan 2017
Total posts 50
Cathay will just become part of Air china
Qantas - Qantas Frequent Flyer
11 Oct 2014
Total posts 692
We're way past that point - Air China and Cathay already own reciprocal parts of each other .. and have done so for quite a while.
The question is : is Air China simply 'leveraging' off Cathay, in terms of learning the customer service world, does it see Cathay as a huge money-maker .. or is all this just a prelude to a full takeover by Air China? Or is Cathay simply an 'annoyance' to be tolerated for a while, in the grand, greater China plan?
Air New Zealand - Airpoints
21 Jan 2016
Total posts 195
An interesting comment. CX and SQ will need to think outside the square and look what the EY/EH and other large carriers are not providing. I think the SQ is in the better position to do so, by shifting more regional services to Silk Air based on 'seats to suit price' model and Scoot as LCC for regional and international short haul, similar to Norwegian business model.
With SQ investment in the A350 (16 delivered and 51 on order) it seems that SQ is looking at more 'point 2 point' travel, looking for new routes that nobody is currently flying to like SIN/CBR/WLG 'Capital Connection' service, which SQ is planning to upgrade aircraft type to A350 in 2018 and use the A380 for its 'spook and hub' long haul trunk services and invest into airlines like VA and long term partnerships like with NZ, to secure its in country product distribution. Looking at SQ aircraft purchases, SQ seems to going to one aircraft type route/service rationalisation, similar to what NZ has been doing.
With regards to CX, it is surround by main land China carriers, so there is not much room to do much. There has been alot of speculation for a while, that Air China might buy it and keep as a separate premium brand. It will be interesting to see what happens to CX.
03 Sep 2017
Total posts 49
While CX is still being highly regarded, and doing better in reputation wise, comparing to the other Mainland China, your'd find that whatever merging that's going to happen, they will most probably/definitely keep the usage of its good name and reputation. It's a surer way of keeping the loyal customer. Why chop off a good limb?
20 Jan 2017
Total posts 45
Give me a stopover in Singapore or Hong Kong any day of he week over a Gulf hub.
25 Feb 2013
Total posts 62
Aren't people talking about the demise of the ME3 with similar gusto? Sometimes even the same journalists!
Point-to-point is exciting, but I would actually prefer a few hours intermission in a transit-friendly airport like SIN than 17hrs+ on a tin can in the sky in Y (or for that matter, transiting through a non-transit-friendly airport like DXB).
21 Apr 2017
Total posts 47
11 Dec 2015
Total posts 85
"Two-thirds of humanity lives within an eight-hour flight of Emirates' base in Dubai, making it particularly well-placed to link global travelers."
20 May 2015
Total posts 581
"I hear this quote often, however it's worth remembering that 40% of the world's population live in just three countries - China, India and Indonesia, and they'll all quite a bit less than 8 hours flight from Singapore."
03 Sep 2017
Total posts 49
Is India and China transit/stopover a better preferred choice compared to SIN and HKG?
Qantas - Qantas Frequent Flyer
11 Oct 2014
Total posts 692
Perhaps, it's time for SQ to examine the idea of a merger / takeover of MAS? In other words, re-combine to re-form MSA (as it was originally known).
Two separate and very different cultures would probably not see this as viable. However, the benefits would be growth for a reasonably successful current SQ .. and provision of stability, exceptional management, guidance and financial investment in a meandering MAS.
17 Sep 2015
Total posts 388
Like others, I vastly prefer SIN Changi as a stopover rather than any of the three major, horrid Middle Eastern airports.
31 Mar 2016
Total posts 621
So many supporters of SQ and CX show up here as usual.
03 Sep 2017
Total posts 49
FLX1,
31 Mar 2016
Total posts 621
@KinHo:
03 Sep 2017
Total posts 49
Let's pull this discussion back inline to this article's main mentioned, where China and Persian Gulf airports/airlines are being said to be a threat to SQ and CX.
And to go with the cost aspect of it, let's get some indication of tax, fees & surcharge for some of these airports.
Here are some figures for a SYD-LHR-SYD flight with a less than 24 hours transit,
SQ $330.52
EK $345.32
CX $387.26
MH $329.32
Here are some figures for SYD-LHR-xxx-SYD (where xxx is the respective hub airport stopover) with a few days stopover, (extra airport tax +)
SQ $26.20 + $330.52 = $356.72
EK $29.10 + $345.32 = $374.42
CX $19.50 + $387.26 = $406.76
MH $23.40 + $329.32 = $352.72
China Southern $515.66
Air China $616.46
China Eastern $764.26
While it looks like the Mainland China airports do not have an extra airport tax charge when doing a longer stopover, their total tax, fees and surcharge is way higher than that of the other 4 airports, even when the extra stopover charge is included. In this aspect, it is not cheaper to transit via Mainland China airport hubs?
And if you are not leaving the airport and have to purchase food and beverage in the airport, I find that all airport prices are about the same.
As for KLIA2 which is where the LCC airlines are, you are correct that the tax, fees and surcharge are significantly lower. However if you were to fly into KLIA and transfer to an LCC at KLIA2, you will still have to pay for the same tax and fees of KLIA, and on top of that the KLIA2 airport tax.
However if you do a flight like MEL-PEK-MEL via KLIA2 with AirAsia, there are 3 airport tax components, which I couldn't get much of their detailed breakdown,
Airport tax $91.00 (this seems to be the MEL-PEK)
Airport tax $19.00 (this seems to be the PEK-KUL)
Airport tax $26.00 (This seems to be the KUL-MEL)
Non-premium pax would (and always) be choosing to pay for the price and get the service as per expectation. I have flown AirAsia many times, and when I do choose to, I do not put high expectation on them, and with that approach I always feel good and have no complaints, both ground service and in-flight.
Horses for courses.
In conclusion, basing it on these "stagnant" costs that's part of any airfare, altho HK has a high cost of living, it doesn't seem to be quite reflected in its tax, fees & surcharge.
I am certain that we all plan our travels accordingly, and depanding on its purpose (business or pleasure) and how we can fit in best to what we can afford, both with time and money. And if a transit city is attractive enough and we can afford the time, and it doesn't cost too much extra to do a stopover, then it is certainly part and parcel of consideration when booking with which airline and going via where. Let's face it, the airline will usually determines the city of stopover.
So if it's a choice between SIN and HKG, for me it'll probably be a question between spicy South East Asian culinary fare or the HK Cantonese fare (my favourite Roast Goose is everywhere in HK).
As for the matter of Changi T4 link to the main 3 terminals ... extracted from David Flynn's article in June 20, 2017
"Photos:inside Singapore Changi Airport's new T4 terminal"
However, T4 won't be connected to its siblings by the elevated Skytrain light rail system – there'll be an upscale shuttle bus instead.
An automated rail link was considered, Poh said, but ruled out due to both the distance required and the presence of "some existing infrastructure and services."
“We weighed the options between a Skytrain and shuttle bus and concluded that the shuttle bus is a much better, effective means of transport to connect Terminal 4 and other terminals.”
I am waiting to see how well the upgrading and renovation and all the works been happening to MEL airport, and it's final outcome. Hope there will be no low ceiling and remote bay disembarking where after a long flight, we have to walk down the stairs in the weather elements of the day, and cramp into a bus while inhaling all the aircraft fuel and exhaust.
Give me Changi anytime, even if it's just the old T1.
And if T1 can be moved to Tullamarine's T2, it will be a big improvement to the current state of MEL.
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