Cathay Pacific ‘to axe 6,000 staff and Dragon brand’ in bid to stay afloat

[Numero Crunchero]

Just a few random thoughts....


After 9/11 and the GFC everyone thought things would be terrible for years - in both those cases it took a few years(3-4) to get back to 100% flying but it got back to 90% flying rather quickly(less than one year). I still expect, maybe too optimistically, that we will be back to 90% flying by end of 2021 which means it will have been almost 2 years!


Basing people when 99% of your flying is to/from HK is inefficient and costs money. We force it to happen (In JCR now) because Hong Kong costs were far greater than bases - this is no longer the case. Up to base rate I am cheaper in HK - over about 70 hours I am cheaper. Factoring and credit for sims, leave and ground duties are very roughly 10hrs per month or so for long haul pilots and 15+hrs for say Adl/Mel/Syd based 3 man ops. On top of that HOTAC costs are higher for based crew as Hong Kong based events cost money. For HK based pilots it costs less as clearly no HOTAC. The saving of HOTAC for based crew on bases washes out with the saving for HOTAC for Hong Kong crew in Hong Kong.

So 84 credit hours on COS08 long haul equates to about 74-75hours flying COS18. And 84hours 3man flying equates to roughly 70hours on COS18. Pure short haul would be roughly around 65hours on COS18 vs 84hours COS18. So if you want to compare costs use those block hour figures from COS18 vs 84credit hours.


Three man ops to EUR cost more on COS08 because of credit hour factoring etc. Under COS18 it will be cheaper (only a little)


It is cheaper to work COS18 pilots way over min guarantee. My hourly rate past 47hours is about 2/3rds my hourly rate average for first 47hrs(on HKPA). So it is ultimately in CX's interests to work us all as hard as possible on COS18 NOT keep us below base rate. The more hours I fly - the cheaper my average hourly rate gets.


If all the based manning is retained with no attempt to adjust current 'legacy' based terms, then flying will go to HK based crew first up to base rate(39-50hours depending on fleet), then based crew from 0 to 84credit hours - then COS18 for the rest. That is the cheapest cost solution.



I have no crystal ball - but i do know that JCR was not set up to fly people on different contracts - it would not have efficiently handled COS08//COS18 scheduling in HK. So I very much doubt we will have massive differences between based contracts and HK. Why have bases if they cost the same or more? (I mean this from a CX perspective not the legacy position we find ourselves in)


LIFO vs seniority - look at KA - look at 49ers court transcripts- then tell yourself seniority (LIFO) will save you! Whether it is in the contract or not it is only an impediment.


First world laws will protect bases - just like AMS and CDG - just like FWA (Oz) took on/admonished Qantas after it needlessly grounded the airline in 2011


Sickness rate will plummet - partially (maybe 10%) due to fear of loss of job and 90% because of productivity pay


Our paycuts will not save the airline - in the short term they save maybe 10% of the cash burn(and add maybe one month to our survival), and in the long term our profitability will be about 1% higher thanks to COS18


We had 5% attrition and were still growing until 2015. CX then reduced growth drastically for next 4 years. As of end of 2019 we had greater training capacity (numbers and training footprint) than before the TB. So CX can handle up to 10% growth in the short term given reduced attrition (no jobs out there) and up to 10% attrition and no growth with no impact on operations remaining static. In fact - COS18 + JRC could give another huge percentage bump in short term surge capacity (5, 10, 15$%???) which is cheaper than recruitment anyway.