Originally Posted by
herewego75
OK you ALLLLLLL need to calm down!
ACMS / OASIS you both remind me of a low time pilot experiencing his first engine failure! You need to take a breath and calm down!
CX will get through this bad patch, believe me. They have just made 1.7 Billion dollars in profit. That will see us through for a while. They just have saved 3 weeks salary from 27000 employees ( can't believe people fell for that ). That will also see them through for a while!
And the Freighter guys are making us lots and lots of money! I hear they might start putting Freight in the belly of the 777 and 330 = MORE MONEY.
So while all the wives and girlfriends have run back to their home countries leaving all of you behind to work and pay for their holiday - remember the fight is not between us pilots. We have to worry about what this company will do next.
I can't imagine taking SLS or Unpaid leave to help them out. I think everyone was silly to do that in my own opinion. We should of all stood together and said NO! They need pilots to fly the machines that make them money! Remember that....
As for our absolutely useless AOA. They are worst than useless. No leadership at all. A rudderless ship! I bet the 747 guys are thinking how they can better this situation for themselves! (shame because they are working hard! They cry when they don't and now they cry when they do!)
The only time when you hear from the AOA is when they are trying to sue a pilot or when they kicking someone out - because they think that they are the Law. Disgusting!
Thats my rant for the week. Remember every airline in the world is in the same boat - don't think CX is the only one - as much as they make you feel like they are.
I believe we will get through this, some of us lost money and some would of got the same time off will a full pay ;-)
Sometimes I really wonder the intelligence of the people that works for CX...
A HK$1.9 billion profit = a profit margin of 1.6%
That is such a small profit in any measure, especially for an airline the size of CX that is generating the level of revenue, of HK$106billion a year, CX should make at least 10x times the amount of profit to be even consider profitable.
Secondly, how much is actually HK$1.9 billion? That is exactly 6.5 days of CX operating expenses (under normal operating circumstance). YES, 6 and a half freaking days!!!
Just to give people some perspective here:
Let’s assume the followings:
1) With a 50%+ capacity reduction in our passenger fleet for Feb and March.
2) Assume cargo is still running 100% but with reduce belly freight, which means a 30-40% reduction in overall capacity.
3) A reduction of Passenger load factor (with the exception of Europe this week, average load factor at the moment are essentially only 30-40% load).
Consider all of the above, CX monthly average revenue will have drop from about HK$8.83billion a month to about HK$2.9billion (I took out any seasonal variation, so this revenue is actually consider high for Feb and March). That’s a 68% drop in revenue and that’s a conservative number due to the traditionally lower revenue in Feb / March but we did not consider that.
Now take CX cost into perspective:
1) 3 weeks of SLS (let’s just make it simple and say everyone took it, which is not the case). Cost reduction spread over 4 months, CX average staff cost went from around HK$1.7 billion per month, down to about HK$1.4 per month.
2) fuel cost with the reduce fuel price is only 28.4% of the airline operating cost in 2019 but with fuel hedging lost, that bring it up to about 30%. Together with 50% less passenger flight, fuel cost each month will drop from HK$2.58billon down to $1.72billion.
3) ATC charges: Normally about 17% of our operating cost, and we will see significant reduction due to reduce flying, as well as some discounting, so that will goes from HK$1.4billion down to about HK$0.7billion per month.
4) customer service cost will also be reduce from less flying to about HK$0.3billion per month.
5) maintenance cost will be hard to estimate as they might try to complete some of the maintenance while the fleet is grounded but let’s just assume we will see 50% reduction, that will bring that cost down to about HK$0.5billion per month.
6) Commission, leasing, financial charges / debt and interests repayment, other expenses, this will be a bit hard to avoid, so assuming this stay around the same, about HK$1.7billion per month.
This give a total monthly operating expense of HK$4.92billion a month.
So essentially as an airline, CX is burning around HK$2.02 billion of cash a month.
So, the so call HK$1.9 billion profit will barely cover a month of loss.
Looking at CX cash position and credit line available, that total of around $12 billion.
Essentially CX has enough cash at the current burn rate for about 5-6 months. I bet you CX will not wait another 4-5 months before making further cutting.
I reckon, CX will have until around May before they will have no choice but to make further cuts. By May, their cash position will be down to 3 months of ops, which is uncomfortably low, which means lay-off will probably be consider to reduce the burn rate.
So for those who still live in the “La La Land” and still think this is not an existential crisis for CX, they really should reconsider the situation that all the airline is facing.
(Note: All numbers are based on the 2019 annual results.)