$60 Million USD !! Blunder

[yosemitisam1]

As we are trying to tighten our belts to safe a hundred kilos of fuel here and there, someone blows $60 Million USD in an anti-trust law suit.
Hope he made $61 Million USD before he got caught.

Quote:
https://iconnect.cathaypacific.com/f5-w-687474703a2f2f696e74726163782e636174686179706163696669632e63 6f6d$$/cx/intracx/cda/images/common/spacer.gif
Important message from the Chief Executive https://iconnect.cathaypacific.com/f5-w-687474703a2f2f696e74726163782e636174686179706163696669632e63 6f6d$$/cx/intracx/cda/images/common/spacer.gifDear Colleagues,

By now you will have heard that Cathay Pacific entered into a plea agreement with the United States Department of Justice (DOJ) in connection with its investigation into the air cargo services of a number of carriers. According to the DOJ, certain of our air cargo practices - and those of other air cargo carriers operating out of Hong Kong - were in conflict with US law.

We have always endeavoured to comply fully with all Hong Kong laws and those of every jurisdiction in which we operate. Unfortunately, some of our actions relating to shipments from Hong Kong to the United States were in conflict with United States antitrust laws - something we very much regret.

We cooperated fully with the DOJ in its investigation into air cargo activities and concluded that entering into the plea agreement was the best resolution. We will pay a fine of US$60 million, which will be taken into account in our 2008 interim results for the six months ending on 30th June 2008 :*

[slapfaan]

Looks like there will be a few management changes in the next few days!!!:ok:

[Faldo]

Can't wait to see how they'll explain away the large cash settlement that they have to pay to settle any future impending lawsuits. Some a little closer to home.

[Fuzzy Math]

Here's to your bonus Tony et al.

[Apple Tree Yard]

..ok, so let me get this straight: I (and most of my colleagues), work our behinds off to do the very best we can to ensure the most efficient operation. In most of the past few years, this effort has seen our management reward themselves with obscene bonuses, at the same time telling us that the profit 'didn't trigger the profit sharing formula'. Now, several of these management 'geniuses' thought they would be clever and have ended up violating the law to the tune of SIXTY MILLION DOLLARS. In simple english, these 'geniuses' have caused all of us to probably lose any hope of profit sharing. I DO NOT WANT TO HEAR A WORD FROM TT OR ANY OTHER MANAGER ABOUT THE 'PRICE OF FUEL' OR 'YIELDS ARE UNDER PRESSURE'. TT, I am sure we will be seeing a notice within days of the termination of the managers responsible. I am also sure that that list will stop at a respectable level 'well' below your office...

[Fenwicksgirl]

Lets not foget the possible onslaught of new NTC's.
"Flight crew only allowed to carry their briefcase on trips", "no bottles of water for flight crew" and no more NUTS!!"
The pilot body should unite to help out the company in this new crisis, afterall they would do the same for us!! :ugh::ugh::ugh:

[iflylow]

Airlines pay $504M to settle price-fixing scam

By LARA JAKES JORDAN
WASHINGTON (AP) — Four international airlines have agreed to pay $504 million in fines to settle charges they conspired to fleece consumers by driving up cargo shipping prices.
The Justice Department called the case one of the largest antitrust settlements in U.S. history.
Associate Attorney General Kevin O'Connor called the scam an "international price-fixing cartel" that cost consumers hundreds of millions of dollars between 2001 and 2006. In some instances, for example, fuel surcharges rose by 1,000 percent.
One of the four airlines — Air France-KLM — has agreed to pay $350 million of the total settlement. The other carriers are Cathay Pacific Airways, Martinair Holland and SAS Cargo Group
"American consumers and taxpayers pour billions of dollars each year into the pockets of these lawbreakers," said FBI Assistant Director Joe Persichini. "Let there be no mistake that people in corporations that take consumers and taxpayers in this way are thieves."
Authorities said executives from each of the airlines met repeatedly in the United States, Europe and Asia to cook up a price-fixing scheme that raised cargo rates, fuel surcharges and security costs for businesses and, ultimately, consumers. The cartel focused on goods shipped to and from the United States, including electronics, clothing, produce and medicines, O'Connor said.
The settlement agreement, filed Thursday in U.S. District Court in Washington, still requires a judge's approval.
Thursday's announcement marked the latest in a series of cargo shipping settlements over the last two years. Earlier, British Airways, Korean Air, Qantas and Japan Airlines filed similar agreements as part of the investigation.
In all, airlines have agreed to pay $1.2 billion in fines — what O'Connor called "the highest total amount of fines ever imposed in a criminal antitrust investigation."
The investigation is continuing.





We already know they treat their employees like this. Are you really surprised that they could do this to their customers as well?

[viking avenger]

60 million US$ divided by 18000 staff is 3333.33 us$ or 26,000 HKD

There will be a collection desk set up on the street in CX City.
All staff will be "asked" to help out the company in these financially difficult times.

[slapfaan]

I am sure we will be seeing a notice within days of the termination of the managers responsible

Oh well..what is 60 mil USD between friends!! This scam has been going on since 2001, and Tony-the-liar claims that the company didn't know that it was doing anything wrong!! Yeah right..:)

With pissed off customers,low level fly-pasts and now THIS..cathay must be very popular in the US right now..

Wouldn't be surprised at all if the US DoT puts CX on their watchlist of foreign carriers..way to go!!!:D

Guess " The MISmanagement" here on pprune won't be saying cheers to his/her bonus this time..:=

[N1 Vibes]

I have to say I agree with the sentiments regarding CX and other airlines behaviour here. But, couldn't help thinking of kettles and pots when I read this:

Let there be no mistake that people in corporations that take consumers and taxpayers in this way are thieves

From the FBI, a US government agency that whipped up anti-anything sentiment, to scare the americam politicos whitless, that sent '000's to war in Iraq, on some shady information. The cost of which to the american people in dollars has just passed $0.5trillion, let alone the human cost........taking taxpayers in this way is murder.

Sorry, just had to get that off my chest.

N1 Vibes

[iflylow]

From the FBI, a US government agency that whipped up anti-anything sentiment, to scare the americam politicos whitless, that sent '000's to war in Iraq, on some shady information. The cost of which to the american people in dollars has just passed $0.5trillion, let alone the human cost........taking taxpayers in this way is murder.That was the CIA. The FBI is mainly domestic. The U.S. definitely has serious issues, but customers and employees would be lucky here in HK to have the protections that they do in the U.S.

[zulapels]

US$60 Mil. fine compaired with nearly US$ 1 Bil. profit last year..+ profits since 2001

Still a great deal for Tony and the boys...

[XFR8]

Well.. I hope some of you are beginning to get the picture.
Years of no pay rises and in the case of pre B scale, industrial sized chunks taken out of COS.
Illegal firing of employees on a mass scale.
Alleged Corporate mis-governance on an internationally criminal scale.

Nothing has changed at Swire.

So next time you are asked to extend, work on a day off, save fuel........ Look after number one. Fly safe, fly healthy. Your family, health and moral fibre are worth more than pandering to a bunch of exploitive, incompetent, greedy mis-managers.:ok:

[hekokimushi]

June 26, 08
fined summary
CX: US$ 60Million
SAS: US$ 52Million
Martinair: US$42Million
AirFrance-KLM: US$ 350million
===============================
504 million

Jan - April 08
JAL: US$ 110Million
QF: US$ 61Million
=============
171 million

Last year
BA: US$ 300Million
Korean Air: US$ 300Million
==============
600 million

only that totals to US$1275Million, and im sure this is ongoing.
did they just change their law to make money??
to help out their economy to be less dragging for the world??

[Viper2]

For some reason no American carriers in this list.

They either know the law very well or the investigators looked the other way. Strange story. :hmm:

[ALPHA FLOOR]

I was once told on an AL that Vol 2 is not to be taken litterally, it should be interpreted to suit the situation..... That being the case I would suggest that CX/Swire's legal team interpreted like their asses and TT as the ring leader should take it on the chin just as I would have to explain proceeding past the nearest suitable...............

AFL

[Mr. Bloggs]

When you see his face on the weekly update, it shows a picture of a very smiley person. Now when he lost 60 million US dollars, it looks like someone just ran over his dog.:{:ooh:

Is the sombre look for the Employees, Swire Management or the US Government or is he just sad he got caught? :} We all should feel sorry for him.:rolleyes:

They should post the same picture when he talks about the rise in fuel prices, starts the propaganda on 13th month or profit share not being paid.:ok:

I guess some people just eat it up and believe.:yuk:

[JoeShmoe]

When did Turnbull and Chen "leave" the company?

Any chance they were in this scheme?

[Busbert]

I think if you look back a few weeks at the management change announcements:

Rupert Hogg - Director Cargo
Rupert Hogg is currently Managing Director of James Finlay Ltd. A wholly owned subsidiary of John Swire & Sons Ltd, James Finlay has extensive tea and horticultural interests in the UK, East Africa, Sri Lanka and Mainland China. Mr Hogg joined John Swire & Sons in 1986. He worked with Cathay Pacific from 1988 to 1997 in various marketing, commercial and revenue management roles in Hong Kong, Korea, Thailand and India. Mr Hogg will succeed Mr Ron Mathison, who will join James Finlay Ltd as Managing Director.

Well done Ron, go off and make the tea.

[aviatorguy]

While I'm not familiar with the various companies, is this a case of where accountability starts with a promotion????

[SMOC]

Any cockup in management results in a promotion :ugh:

[sirhcttarp]

Recent change in policy in flying planes slower at cathay saves roughly 700kg of fuel per flight averaged across all fleets and flights. If cathay had 200 flights a day saving an average of 700kg of fuel per flight, over the course of a year, for jet fuel averaging 4USD / gallon, it will save USD60 million.

Cathay gets fined USD60 million for behaving like a monopolist.

These two pieces of news came out within a month of each other.

Coincidence?

[Fenwicksgirl]

Cant wait for management explaining why the workers are not going to get their 13th month!!!
"Apparantly we umm have to ummm due to an apparant umm oversight in the umm law, which we umm always fully intend to umm comply with here in Hong Kong (under normal circumstances), we unfortunately umm conflicted with umm basic common law practices overseas, which of course we had no knowledge of (we thought price fixing was ok), US regulators have forced us to ummm cancel your "discretionary" 13th month bonus this year, we want to pay you all for your hard work but ummmm they wont let us!!(management bonuses remain unaffected)"

[MasMamak]

Heard from a KAL guy stopping over in the sandpit........Korean Air was fined US$300million and all was quiet over that front. Maybe the Koreans have greater loss tolerance, losing lives and shiny jets in crashes seem like small deal so what's US$300m?;)

[rick.shaw]

Fenwicks girl. Before a round of expectation management begins, 13th month is sacrosanct to CX employees - especially ground staff and cabin crew. CX know that there would be a huge backlash if 13th month is not paid out unless there are exceptional circumstances (eg SARS). Despite the primary issue of fuel prices, loads continue to be solid and the airline, thankfully, is in good shape to weather the storm.

[Sqwak7700]

Round of bonuses for all the management. I'm sure they consider 60 mil a small price to pay for doing business they way that they did.

I would like to see how much money they made from this whole fiasco. Tally up how many tons where sold and at what price above which they should have been sold, and 60 mil is just pennies on the dollar. :hmm:

[bungacengkeh]

Yesterday, 09:13 #26 (http://www.pprune.org/forums/4210850-post26.html) (permalink (http://www.pprune.org/forums/fragrant-harbour/332817-60-million-usd-blunder-2.html#post4210850)) MasMamak (http://www.pprune.org/forums/members/masmamak.html)

Join Date: Jan 2008
Location: UAE
Age: 39
Posts: 15


Only US$60million?
Heard from a KAL guy stopping over in the sandpit........Korean Air was fined US$300million and all was quiet over that front. Maybe the Koreans have greater loss tolerance, losing lives and shiny jets in crashes seem like small deal so what's US$300m?;)
http://www.pprune.org/forums/images/statusicon/user_offline.gif http://www.pprune.org/forums/images/buttons/report.gif (http://www.pprune.org/forums/report.php?p=4210850)

All true; BA was also slapped with fines to that tune. So it looks like every airline is playing dirty, those who can hide and avoid publicity escapes scrutiny.

[Kitsune]

Bloomberg.com: Europe (http://www.bloomberg.com/apps/news?pid=20601085&sid=a2RSIRpvoPCg&refer=europe)

Does Hong Kong have an extradition facility with the USA? The UK does, and has allowed nationals to be taken to court for this sort of thing in the USA....... suppose taking little Tarquin and Jocasta skiing in Aspen may well be out this year :D:D:D:D:D

[BandH]

Swire criminals up to their usual tricks!!

[rjmore]

Well, like one of my old coaches used to say, "If you ain't cheatin', you ain't tryin'".

[Kitsune]

U.S. v. Cathay Pacific Airways Limited (http://www.usdoj.gov/atr/cases/cathay.htm)

US$60,000,000 is just the start of it.......... :eek:

[ALPHA FLOOR]

Can see the press release already. All DT's and PC's fault. TT squeaky clean.

AFL

[Virtual Reality]

And this is what they do to recover the losses:ugh:

Travel Alert - Acceptance of amenity kits in First and Business classes from August 1st 2008 (10 Jul 2008)

The additional burden placed on the Company by the fuel crisis is requiring all departments to review where more effective cost management can be achieved.

In staff travel, one area which has been identified is that of amenity kits and pyjamas currently offered in our First and Business class cabins.

These items are costly to produce and distribute and we know that many travellers retain items from kits acquired on previous travels. We are therefore asking our staff, retirees and their nominees to assist us in cost control measures by either re-cycling the items you already have or simply not accepting the kits from the above date.

We carry spare toothbrushes, eye masks etc onboard and the cabin crew will be happy, on a request basis, to provide these to you. In addition to being a useful cost management element, if adopted widely a reduction in the numbers of kits used will also have an environmental impact.

So that there will be no distinction between our ID passengers and full fare customers, the cabin crew will continue to offer the amenities to each passenger seated in First or Business classes. However, from August 1st and until further notice we ask that our staff, retirees and their nominees - whether on Duty or Leisure - to politely decline the offer of the kits and pyjamas as appropriate.

We appreciate your assistance with this initiative and would ask you to ensure that your travel nominees are also aware of the new arrangements.

Bob XXX
PM O & ES
10 July 2008

What does it mean by 'politely decline'? Could we or could not we?:bored:

[Gone Down]

You have got to be kidding me! What a joke.

[Kitsune]

'Politely decline' means if you accept one you'll get dobbed in......:cool:

[Loopdeloop]

Anyone remember the last time we had this wonderful cost saving initiative? Six months later the company was selling the leftover kits for $20(HK) a pop, I think.

[Peebee and Jay]

I will decline the amenity kit if they reduce the ticket price by HK$20. :D

"Money or the box?"

"Well let me think... mmm, I'll have both Bob!"

[Harbour Dweller]

I will decline the amenity kit if they reduce the ticket price by HK$20.

I'll second that :ok:

[ALPHA FLOOR]

Followed by please politly decline a meal.

If my colonial masters set the example (that means no Champagne, Balik Salmon and Whisky for our prince as he stretches out in first on his way back from shamford in his first class sleeper suit) I too shall then "tow the line".

Further more, its a principle at stake, since I have not been thanked for the countless hundreds of kgs of fuel I have saved for you by pestering ATC for directs and going above and beyond being professional, untill I receive notification that the $10 for said amenity kits has been deducted from my exorbatant FOC ticket - I SHALL BE POLITLY REQUESTING one, even if it is for my Amah.

Good night
AFL

[sirhcttarp]

Please post your estimates everyone!

I'm sure the public already knows by word of mouth that cathay is telling staff to decline the amenity kits and so when a full fare pax flies next to someone who says no "POLITELY" to an amenity kit, it's gonna be bloody obvious.