Fuel Surcharge response letter

[Team America]

PC response to the Fuel Surcharge letter from the AOA.

Any thoughts?

Some figures to ponder. (please correct me if I have made any calc errors)

HKG-TPE 777-300 384 pax x USD15 (fuel surcharge) = USD$5760

Trip fuel 9000kg = 3042 US Gallons x USD 2.00 = USD$6084


How is this a "surcharge" it covers nearly the total fuel cost, according to PC we need to charge the staff to keep making a modest profit. :yuk:

[Arcla]

blah blah fuel prices blah blah due to oil prices blah blah no profit......................
What absolute crap....I wonder if he even took the time to read the letter before he signed it?:confused:

[2 cents]

What a joke.

And for that example, don't forget CX charges the surcharge for freight also.

I think I would rather had no reply to the AOA's letter. Does he think we are that stupid?

"subsidize staff's personal travel". Are you kidding???? I think the ridiculous price we pay for seats that would otherwise be EMPTY more than covers any expense to CX.

CX generates massive profits off staff travel and they are the only Airline I know of that is now charging their own staff the fuel surcharge. But then again, times are pretty tough right now, aren't they?

[Mr. Bloggs]

Think about that the next time you answer the phone or acknowledge on Crew Direct or any other aspect of helping this lot out.

But then again, most do it.

[VR-HFX]

We all seem to forget that PC was appointed Dep CEO (Cocktail Parties) and the vacuous types he met on duty has led him to believe that he was blessed with the clever gene.
Every single one of our local commanders would eat his lunch in the intellect stakes.... not to mention as a human being.
A classic example of someone who is well out of his depth but thinks he walks on water...so it doesn't matter.
Time to re-name the Peter Principle me thinks.

[Night Watch]

This is a bull :mad: response from a complete :mad: head.....

Did he even read the very well written letter from the AOA? As far as i can tell he didn't address any of the points!

No wonder flight attendants are pouring unopened bottles of wine down the sink after a flight and flight crew have lost all enthusiasm for saving the company money (and we all know we can.... change of level/cost index etc)

I give up.....

[spannersatcx]

No wonder flight attendants are pouring unopened bottles of wine down the sink after a flight

I hope not, they're supposed to put it down the toilet!:eek:

[Night Watch]

spannersatcx

Have you not noticed how much worse the red/brown stain underneath the aircraft looks..... they just don't care!

[Giuseppe Giovanni]

Ah yes...

P.C. The man who's ego is that big that he's above the title of CEO. Instead he's believes that the phrase 'Officer' is un-becoming to a man of his stature and importance and so only allows his title to be published as Chief Executive.

Mix this in with the standard 10 plus pictures that you always seem to see of the man in CX World and various other articles in Intra CX of Phil doing greatness and you begin to wonder how mislead the man actually is.

Does he actually think that people care and is he running a Company or running for President??

[Mr. Bloggs]

Pol Pot comes to mind

[Numero Crunchero]

OK, if I was CE(O) I would have the following surcharges.

Fuel surcharge...cause it is so goddamned expensive and no other industry has fuel costs.

Maintenance surcharge...cause it is so goddamned expensive and no other industry has maintenance costs.

Pilot/cabin crew/ground staff surcharge...cause it is so goddamned expensive and no other industry has staff costs.

Route operating costs surcharge....cause it is so goddamned expensive and no other industry has operating costs.

Inflight catering....cause it is so goddamned expensive and no other industry has service costs.

Advertising surcharge....cause it is so goddamned expensive and no other industry has advertising costs.

With all these surcharges I would be happy to announce that I would no longer charge anything for staff travel...ID00!!! But of course you would have to pay these surcharges...so cost of HKG-SYD-HKG(in EY) would be about $6,000HKD!

On a less sarcastic note, it costs about $25US for an Oz return flight in additional fuel burn. In flt meal....hmmm...not much. It costs around $125US in FUEL SURCHARGE on the return trip...so not counting ID90component, the fuel surcharge has already paid for fuel, the meal and any taxes! The rest (which includes the ID90 payment and the airport taxes) is profit.

Which non number cruncher decided that I pay 100% of parts of the cost of doing business and ID90 for the rest? Airport taxes and fuel are just components of the cost of running an airline as are staff/maintenance/route operating expenses.

About 2 years ago they made it illegal in oz to separate the various costs of ticket prices...wish that would happen in HKG! DT said a few years back that 3% of all pax are staff....seats that would have been empty, subject to payload...huge profit source!

[Sqwak7700]

Not to mention the benefit to the compnay of having crewmembers on-board to help out in case something goes wrong. US airlines realized this long ago, and crewmwmbers are always welcomed to fill empty seats.

I remember a TWA L-1011 that aborted a TO in JFK due to a stick shaker activating falsely on rotation. That aircraft ruptured tanks and set fire pretty quickly. If you see the wreckage you would be amazed that everyone got out without any serious injury. The flight had lots of crewmembers traveling which was instrumental in evacuating all the passengers safely.

I'm sure that Cathay would expect the same of us in a similar situation. It is written all over VOL2P2 and the QRH. Yet we are paying ridiculous fares. Staff travel is supposed to be just one of the industry perks that make us overlook the other ****t like working holidays and weekends, or spending lots of time away from home. Not here in CX I guess.

My previous job gave us free domestic Y class travel after serving 5 years with the company. And the domestic first class charge was less than 20 USD anywhere in the continental US. And we were considered higher than the rest of the industry. Now, don't any of you morrons tell me "that is why your company didn't make any money". Empty seats are empty seats. If it where not for the employee occupying that seat, then the aircraft would leave with that seat empty. So it doesn't cost the company ****t.

CX's view towards fuel surcharges is simple. Think about it, if they just raise their ticket price, then that is just a price hike. If they call it a fuel surcharge, then when you search online for the lowest fare, it makes CX look competitive to other airlines who might not be charging a fuel surcharge. Not until it comes time to pay do you realize that there is one hand on your shoulder and a growing discomfort in your derriere. :eek:

The real question I want answered; was the fuel surcharge accounted for in last year's profit numbers?. That is what really makes me curious. If it wasn't then we should all have gotten a healthy profit share. I want to know where those figures were posted. The profit report detailed all expenses and accounted for many things, but I didn't specifically see "Fuel Surcharge" on there. :=

That is what the Union should be seeking answers to. If they already have, or that is a non issue, then I apologize for beating a dead cat.

[stiffwing]

2 cents
FYI, Qf have been charging their valued staff a fuel levy for a number of years
A typical commuter to Syd base has a levy component of around 60% of the fare. The cost of the levy does not vary based on the sector e.g. canberra - sydney (45min sector) and perth - sydney (4 hr + sector) ...same levy. Go figure?

[Numero Crunchero]

sqwak7700
was the fuel surcharge accounted for in last year's profit numbers?.

Despite the conspiracy theorists, there is nothing untoward in how the fuel surcharge is accounted for. The total fuel bill for 1st half last year was close to $8billion, but after hedging gains and fuel surcharges the accounting cost was around $5.8billion.

Maybe a numerical example will help. Lets say for the full year turnover is $60billion with fuel surcharge of say $5billion. Lets say fuel costs were $17billion before hedging/surcharges(last year it was about 28.8% of turnover). In their accounting they will say turnover $60B, fuel $12billion($17B less $5B surcharges) take away all other costs and say profit of $5billion.
Now if we take surcharge as revenue, turnover is now $65B, take away all other costs and also take away the increased fuel cost of $17B and you end up with a profit of $5B!

So if we accounted for the surcharge as revenue our profit margin(per centage) would fall as we have $5B/$65B versus their current accounting technique of $5B/$60B.

I know there is a natural distrust of anything we don't understand but in this case that mistrust is misplaced!

[Sqwak7700]

sqwak7700
was the fuel surcharge accounted for in last year's profit numbers?.

Despite the conspiracy theorists, there is nothing untoward in how the fuel surcharge is accounted for. The total fuel bill for 1st half last year was close to $8billion, but after hedging gains and fuel surcharges the accounting cost was around $5.8billion.

Maybe a numerical example will help. Lets say for the full year turnover is $60billion with fuel surcharge of say $5billion. Lets say fuel costs were $17billion before hedging/surcharges(last year it was about 28.8% of turnover). In their accounting they will say turnover $60B, fuel $12billion($17B less $5B surcharges) take away all other costs and say profit of $5billion.
Now if we take surcharge as revenue, turnover is now $65B, take away all other costs and also take away the increased fuel cost of $17B and you end up with a profit of $5B!

So if we accounted for the surcharge as revenue our profit margin(per centage) would fall as we have $5B/$65B versus their current accounting technique of $5B/$60B.

I know there is a natural distrust of anything we don't understand but in this case that mistrust is misplaced!


Well, you certainly lived up to your name. I stand corrected, my apologies.

I'll put my conspiracy theory hat back in the closet for a while. ;)