Over the years，188bet sports betting is definitely the dominant player in the Hong Kong market。

Hong Kong aviation market structure，is 188bet sports betting、Hong Kong Airlines, two airlines, are in a dominant position in competition，Multiple airlines dispersedly penetrated。As of the end of last year，Cathay Pacific owns passenger aircraft、A total of 196 cargo planes，Navigable to 203 cities in 52 countries and regions around the world。

The picture shows the market share of each airline in the 188bet sports betting aviation market in 2017。As of 2017, more than 100 airlines have launched capacity in the 188bet sports betting market，The China Thai Airways Group’s capacity share is as high as 49.8%，Far ahead of other companies，188bet sports betting Airlines’ capacity share in second place is only 6.1%.

Actually，Back when mainland China airlines first opened international routes，188bet sports betting has long been famous: it has won the Best Airline multiple times、Best airline flying Pacific routes、Best International First Class、International Airline Catering Service Gold Award and many other awards。

In the past 70 years of business competition，188bet sports betting has only suffered losses 4 times。The first two were the economic crises that broke out in 1997 and 2008，The last two times were in 2016 and 2017。

2.Five major issues and the “darkest moment”

188bet sports betting’s business difficulties，From a comprehensive analysis，Mainly five major issues。

First of all, the growth rate of transportation 188bet sports betting investment and transportation volume has slowed down.

2008-2017， 188bet sports betting’s cumulative capacity investment shows an upward trend， Except for declines in 2009 and 2013，Other annual capacity investment maintains positive growth。In 2017, transportation capacity investment only increased by 2.8%， Compared to 2014 and 2015, the capacity growth rate has dropped significantly:

The picture shows the 188bet sports betting’s capacity investment and growth in the past 10 years

188bet sports betting had a strong ability to acquire passengers before 2016，The number of passengers transported is growing rapidly；However, the passenger business failed to recover in 2016 and 2017，The growth rate of passenger volume has not exceeded 2% for two consecutive years:

The picture shows the number of passengers carried by 188bet sports betting in the past 10 years and its year-on-year growth rate。The blue column represents the number of passengers (millions of passengers)，The red line represents the growth rate of passenger volume。

Second, passenger revenue declined and freight 188bet sports betting revived.

There is a significant difference in the revenue contribution of 188bet sports betting’s passenger and cargo business in 2017，Passenger revenue decreased by 0.8%，Freight revenue increased by 19.1%。

Passenger transport business， Passenger revenue in 2017 was 664.HK>403_word_end<.8 billion，0 less than in 2016.8%，Yield rate decreased by 3.3%；Passenger load factor reached 84.4%，Down by 0.1 percentage point；In freight business，Ranking by freight ton kilometers，188bet sports betting has become the fourth largest operator in the world，Second only to FedEx、Emirates and UPS。Its freight yield increased by 11 in 2017.3%，Load factor increased by 3.4% to 67.8%。

Third, the reduction in revenue from high-class cabins exacerbates the decline in 188bet sports betting transport quality.

188bet sports betting’s high cabin (including first class and business class) revenue has continued to decline since 2015，The decline in premium cabin revenue and economy class revenue continues to bottom out in 2016，High cabin income decreased by 6.6%、Economy class revenue dropped by 9.2%。Both premium class and economy class revenue recovered in 2017，3% increase respectively、2.6%， But the growth rate is slow，Still not as fast as the growth rate in 2014 and before:

The picture shows the growth rate of high-class revenue and economy class revenue of 188bet sports betting in the past 10 years

This downward trend，Objectively attributed to the rise of international hubs from the Chinese mainland market and the rapid expansion of low-cost airlines in Asia，But more importantly, 188bet sports betting’s ability to acquire high-quality passengers has declined。

On the one hand，Mainland China Aviation Market，Air China、China Southern Airlines、China Eastern Airlines、HNA and other groups are accelerating their international layout，The total amount and speed of direct shipping capacity are increasing，Mainland airlines divert passengers from 188bet sports betting，Passengers from mainland China to and from international destinations，No need to transfer to Hong Kong。

On the other hand，Full-service airlines in neighboring Asian countries and regions are accelerating the expansion of their sixth freedom rights business，Thereby reducing 188bet sports betting’s revenue。Although these full-service airlines are in the long-haul market、Wide-body aircraft operation、Brand service experience、Competition in the transit market，There is a certain gap with 188bet sports betting，But in Asia and Australia、Competitiveness in the North American transit market has improved。

Fourth，The rapid expansion of European shipping capacity has intensified 188bet sports betting’s operating risks。

In recent years， The aviation market demand between Hong Kong and Europe has not increased significantly，In an environment where other airline competitors have not reduced their capacity，188bet sports betting has overdosed in recent years、Increasing European shipping capacity too quickly，Making the overall market oversupplied，188bet sports betting operating cost pressure surges，Business risks continue to increase。

From 2015 to 2017, the average annual compound growth rate of 188bet sports betting’s European market capacity is as high as 10%，And the North American market、The average annual compound growth rate of the Southwest Pacific and South African markets is only 2.7% and 2.9%：

188bet sports betting’s operations in the Southwest Pacific and South Africa over the past 10 years、Transportation capacity investment in European and American markets。

Although 188bet sports betting has replaced Airbus A350 on the route from Hong Kong to Dusseldorf，And newly opened a round trip from Hong Kong to London Gateswick、Tel Aviv、Seasonal multiple routes to European cities such as Barcelona，But the European market still has excess capacity，188bet sports betting has to find new markets to digest the new capacity。

Fifth, high fuel and labor 188bet sports betting reduce profits.

How to reduce fuel costs、Prevent loss of profits in advance，This is an issue that 188bet sports betting has been paying close attention to for many years。The practice of hedging is an innovative business move，However, improper operation will cause a series of problems。

In 2008-2014， 188bet sports betting uses hedging instruments，Successfully alleviated the cost pressure caused by excessive oil price increases four times (except 2008 and 2010)， But since 2014，Cathay Pacific has increased costs for four consecutive years due to improper fuel hedging，The annual loss of fuel hedging in 2014-2016 reached 9 respectively.HK.1 billion、84.HK.4 billion、84.HK.6 billion， As of the end of 2017, 188bet sports betting’s fuel hedging business lost 63.HKD 7.7 billion:

The picture shows 188bet sports betting’s fuel hedging profit and loss over the past 10 years。The blue column represents the profit and loss of fuel hedging。

Secondly，The increase or decrease in airline labor costs has a great impact on operating profits。188bet sports betting’s total labor costs have increased rapidly in recent years，From its 2016 annual report，Employee expenses in operating costs have climbed to the same level as fuel costs，Both account for about 21%。Therefore, the operating income has not increased significantly，Profit loss can be partly attributed to this。

In order to reduce losses，188bet sports betting has implemented a series of restructuring and change measures since the first half of 2017，Replaced some senior executives，600 layoffs，Making the proportion of labor costs in operating costs gradually smaller than fuel costs (fuel costs exclude hedging)。

As of 2017，188bet sports betting labor costs account for 20%， Fuel cost ratio is 24.8%。Although 188bet sports betting has achieved some results in reducing costs，But there is still room for these two costs to continue to decline。

3. Refuse to be a salted fish and insist on making a comeback

After the summer and autumn of 2018，188bet sports betting has proposed that it will continue to take effective measures to revitalize transportation resources，Vigorously develop the aviation market，Strictly control operating costs，Efforts to ensure business profits。

一，Continue implementation of three-year transformation plan，Including reorganizing the headquarters team structure，Appointment of new management team，Hope the business will be more streamlined、Flexible；Continue to promote the steady expansion of 188bet sports betting’s international hub，Newly opened from 188bet sports betting to Nanning、Jinan、Brussels、Copenhagen、Dublin、Washington、Cape Town、Darwin and other city routes。

二，Continue to receive advanced models，8 will be received in 2018 to be more fuel-efficient、More efficient、Airbus A350-1000 aircraft with larger passenger 188bet sports betting。

三，Innovative aviation products and passenger services，Comprehensive deployment of in-flight WIFI services on Boeing 777 and Airbus A330 flights，Reopening the renovated and upgraded 188bet sports betting International Airport lounges, etc.。

四，Carry out in-depth cooperation in international freight，Planned to cooperate with Lufthansa Group Cargo from the third quarter of 2018，Use 188bet sports betting

Air routes between 188bet sports betting and Europe directly benefit.

五，Strictly control operating costs，Planned on maintaining 188bet sports betting’s high passenger service standards，Use hedging to operate scientifically and rationally，Reduce fuel costs，By streamlining the structure、Improve efficiency，Effectively reduce labor costs，Ensure a high level of operating income overall。

Overall，Data display from January to April 2018，188bet sports betting’s oversupply situation has not improved。The growth rate of its transportation capacity is 3.1%，Significantly higher than the passenger volume growth rate of 2%。

Although 188bet sports betting has the advantage of international hub brand，But we are currently facing a severe market competition environment。Therefore，There will still be great uncertainty in the operating conditions of 188bet sports betting in 2018。

Today，The "Spirit of Hong Kong" series of inkjet aircraft has reached its third generation，But can 188bet sports betting still fly high as the spray painting of "Spirit of Hong Kong 97" shows，Still have to wait and see...

*Source of this article: WeChat public platform "188bet sports betting Aviation",（ID:interavi),Author: Hu Jin, original title:《When will 188bet sports betting regain the "Hong Kong spirit"，Flap your wings and return to normal business？》.