Bueno Hombre,
Exactly.
In this 21st century bonus driven culture where the rewards are greater than the risks by an order of magnitude, these rapid and extreme cycles of boom and bust will only continue. Particularly as company and government leaders have succeeded in normalizing a culture of capitalizing profits and socializing losses.
Over the past 20 years how many times have we been denied profit sharing in exceptional profits because clever bean counters had got a bet/purchase/sale right but "operational profit" has been low? It'll be the same again this year. CX's shareholding of Air China will return a sizable dividend but this will find its way into the "group profit" column, while the fuel hedging fiasco will be part of "operational profit".
What rubbish. How can a futures bet on fuel price be operational yet a futures bet on a stock price be not?
But according to AT "it's different this time".
She's partially correct. It is different.
Low oil prices,
World GDP growth.
IATA estimates of continuing record airline profits.
Virtually free finance.
CX FOP's budget that per capita is the lowest it's ever been, working to a rostering "agreement" that she wrote herself.
If it's so different this time why are they making the same noises they've always made. (I can't believe they've even rolled out the line about currency movements)
She's also right that CX needs to make structural changes.
And it's an easy solution.
Remove the bonus culture. Remove the nepotism structure of senior management being promoted from within instead of head hunting the best people worldwide. Until the directors get on board with structural reforms and remove the management that has led this company so ineptly, then don't expect the staff to do more than their contracted requirement. Why is it that only extra effort at management level gets rewarded? It takes a certain type of arrogance to lead an organization into this mess, then not only claim they know the answers, but they'll be the best people to lead us out of it. But who's shocked? It's the same ruling class, educated in the same schools, who 100 years ago stopped ordering men to walk towards machine guns and decided a light jog would perhaps work.
We'll see by the appointment of the next CEO and the 2016 bonus column if Cathay is truly serious about making structural changes, or are just using the age old adage of never letting a crisis go to waste. Particularly if it's self inflicted. That way it can be claimed to be all part of the grand plan.