Originally Posted by
GTC58
Really, you must be a financial genius, because the balance sheet shows a highly leveraged airline. If you read some of the analyst research reports of CX they show a very different picture then you suggest. Cash flow will be a problem in the future as you can't bleed billions of dollars in cash without consequences. My guess is that CX will need a capital injection in the not so far future if things don't change.
Some of the US airlines went down this path in the past, but had chapter 11 proceedings to wipe their balance sheet clean. Not sure if that possibility exists in Hong Kong.
Well, it appears at least in this case it has enough boatloads of cash to either buy the jets or convince someone to lend them the capital. So there has to be boatloads of capital somewhere to be gotten at when desired. And it appears to me they want to live pretty high on the hog while stiffing the help (and not in a good way). Not going to get much sympathy here.
CX always plays the no chapter 11 card, but there are lots of ways to stiff someone you don't want to pay (and maybe even keep the money accessible somewheres else). Just because a defined chapter 11 doesn't exist in conventional terms doesn't mean there isn't an equivalent vehicle which essentially does the same thing--perhaps one which has a great deal more liberal terms than a conventional US bankruptcy whose terms are actually pretty restrictive. As such I kinda scoff at those claims.
To be honest, the way money moves around, I have no idea which balance sheets might be true and correct and which ones might not be (at least in terms of what I'd consider the truth, the whole truth, and nothing but the truth). Many entities are broke on paper while also controlling (or tied in with) other entities which have bazillions. Should be interesting if someone, somewhere, someday finds a way to discover what is really going on.