13th month.....are we getting it?

[luvmuhud]

So.........who reckons we're getting 13th month?

I need to know....I'm a Cathay Second Officer, and by definition am therefore exceedingly poor. I've been saving 10% of my salary for the past 6 months in order to give the kids a couple of Chrissie presents each - so far, I've got HK$58.20. I NEED 13th MONTH!!!!!!!!!!!!!!!!!!

[ACMS]

That is the 6 million dollar question.

Fawlty towers are probably trying to work out how thay can NOT pay the full 13th month as we type this.:=

With fuel prices going south and loads factors still ABOUT the 70% mark we should make a fair profit.

So my guess is:--- Yes full 13th month.

Unless the market really does drop to nothing.

[Frogman1484]

ummm not sure ...I recon a capped amount...lets say 10 days salary or $60.24 which ever is higher!!!:{

[LapSap]

13th month? How quaint. What sort of rationale is there for this sort of thing? Please don't tell me its guaranteed in your contract.

[Shot Nancy]

It is guaranteed in my contract.

[Betsy]

I've been saving 10% of my salary for the past 6 months in order to give the kids a couple of Chrissie presents each - so far, I've got HK$58.20.

Perhaps you need to look at how your money is spent (or wasted). CX management should be able to tell you how.

[AD POSSE AD ESSE]

Contact the CARGO department in this regard..

They are experts:ouch:

[so_tired]

when we didn't get it during sars, they gave us 3 months notice because they know most of us pay tax with it.

so, i reckon we'll get it.

zzzzzzzzzzzzzzzzzzzzzzzzzz

:zzz:

[ACMS]

This just in from OUR AOA:

Revenue – the financial tsunami



In the Friday Telex of 17 Oct, it is reported that revenue fell 10.8% below budget for the first full week in October. For the sake of the exercise, let’s assume that revenue remains 10.8% behind budget for the remainder of the year. According to a previous Friday Telex, we were 3.6% ahead of the budget for the first 9 months of the year. So a shortfall from budget of 10.8% for the last 3months of the year, and not our ‘peak’ revenue months at that, would result in us being about 0.9% ahead of budget at year end. Hardly a figure to crow about, but not so bad if you consider that revenue for 2007, our record profit year, was only 2.0% ahead of budget!



Profit = Revenue – Costs!



Based on the latest figures, revenue will come in slightly above budgeted level for the year. Costs, on the other hand have fallen dramatically over the last few weeks. Crude oil prices are less than 50% of their peak values in summer. But more dramatic has been the fall in jet fuel prices. The margin for jet fuel above crude oil prices has decreased from around $40/barrel to just over $20/barrel. Additionally, as reported last week, fuel surcharges have fallen by up to $10,000US per ULR pattern, but fuel costs have fallen by over $70,000US per ULR pattern. So the surcharge is absorbing an ever increasing percentage of fuel costs.



At the operating level, the Company basically broke even in the first half of 2008 – that is revenue and costs were equal. Fuel recently peaked at about 50% of our costs – so the recent fall in fuel prices, over 40%, implies that our operating costs will fall by 20%. As this will only affect the last 3 months of the year it will reduce total annual costs by around 5%. On top of this it must be remembered that whilst Company communiqués incessantly declared that fuel surcharges rose too slowly and did not fully cover the fuel increases, the same slow CAD approval process will result in fuel surcharges absorbing an ever increasing percentage of total fuel costs as fuel prices fall!



So whilst the recent revenue drop of around 10% is cause for alarm, the more than 20% drop in operating costs, for the last quarter, should more than counter that revenue loss.


So there you go.....................

Expect a FULL 13th month I'd say.:ok:

[N1 Vibes]

so tired,

I suggest that you return to your cloud and dream on. This was the same year that those of us on contract with CX, were offered the amazing 12 month contract, instead of the 3 year contract at renewal. Of course you get to your 5% bonus quicker, but try getting credit....

Brgd's

N1 Vibes - Not Wearing My Rose Tinted Glasses(!)

[SMOC]

No 13th Month, you heard it here first, been told to sort out tax loan if required!

[ACMS]

rubbish mate..............so who told ya that? The fleet office? They wouldn't know anything...........

[Numero Crunchero]

I will be very surprised if we were/are not profitable in the 2nd half. I don't think it will be a huge profit, depends on the tidal wave financial crisis or tsunami or whatever the disaster word du jour is.
Back in the late 90s, the last time 13th month was not paid, we were not notified until early December I think. So if you are relying on 13th month for tax, have a contingency plan!
By the way, we were paid half of 13th month in 2003 after SARS - the same year when earlier we 'volunteered' our 3 weeks leave without pay. AIrbus and Classic CNs had to wait about 12-24months to actually take the leave as we were undermanned...so I wouldn't expect to see layoffs this time.

Its always darkest just before the dawn!

[Kitsune]

Not counting the loss on the share buyback........:rolleyes:

[Yeager]

Management in this company - The Worlds most Admired Airline - that is - has no shame whatsoever.
No we will NOT get 13th month. We will get 1 month or 15.000Hkr whichever is the lower.

Now have an icecream and enjoy the taste. :D

[ACMS]

Platts IATA Jet fuel price updated just now:

At $91 barrel, down 6% on 1 week ago, down 28.3% on 1 month ago and down 11.0% on 1 year ago. that will mean 5 or 6 months of cheaper fuel over the year. ie the second half of the year. So with a break even profit in the first half ( forgetting the fine ) and cheaper fuel in the second.........
Xmas and Chinese New Year ( the second half is always better ) are coming and people will still travel.

Still think the FULL 13th month wont get paid?

I think it will as we will turn a small profit around 1 to 2 billion. Maybe more.

Don't believe these people that tell you otherwise, THEY WOULDN'T HAVE A CLUE.:=

[FlexibleResponse]

In a "normal" year the Company will pay 13th month salary. Most years are normal and this salary payment is an expectation of all staff.

The local staff in particular are very expectant each and every year for receipt of this 13th month salary. If for some reason it did not happen, then the local staff would be extremely upset.

The Company does not want to upset this very important element of their staff structure and also degrade the Company's status and standing in the Hong Kong community.

Precedent and Hong Kong Court rulings basically ensure that the 13th month salary is paid, except in the most extraordinary circumstances.

[SMOC]

CX can't afford to pay 13th month they have to buy British Airways :eek:

LONDON (Reuters) - Shares in British Airways (BAY.L: Quote, Profile, Research, Stock Buzz) closed up 4.3 percent on Wednesday on market talk that Cathay Pacific (0293.HK: Quote, Profile, Research, Stock Buzz) was planning a takeover bid, traders said.

[Liam Gallagher]

Does anyone recall NR writing a few years back about the rationale behind 13th month. I seem to recall it was in response to the based guys, particularly the Freighter guys, questioning why they didn't get it. He argued that different countries have different market norms for paying annual salary. Some it's 52x 1 week salaries, others 26x fortnightly, others 12xmonthly. For HK it was 13 monthly salaries for the year and he therefore thought it was inappropriate to apply what was one country's norm to another Counrty which had a separate payment culture (particularly when it cost him money :)) Somehow don't think we will hear this argument this year!!

Researching a post for another thread got me reading my contract. My Clause 8.5 says..."In any year when profitability is marginal or negative, as determined by the company, the Annual Discretionary Bonus may be reduced or, in extreme circumstances, not paid."

Are these extreme circumstances...? SARs.. 911.. they struck me as extreme. We are in a cyclical industry, and now in the down cycle... is that extreme?...

PS Notice how I didn't mention the $US60m fine... Tony would be so proud:rolleyes:

[TruBlu351]

Holy Crap.........it's all doom and gloom out there! They're just trying to soften everyone up for the bombshell!

Check out the URL title on the pic!! "Tony Serious" lol

At least use a different photo each week.....that shirt has to be quite off by now! 6 months without being washed :}

https://iconnect.cathaypacific.com/f5-w-687474703a2f2f696e74726163782e636174686179706163696669632e63 6f6d$$/ix/dailynews/peoples/tony_serious.jpg

[edit] Doh, link won't work from secure website.

[TruBlu351]

I'm a Cathay Second Officer, and by definition am therefore exceedingly poor.

Mate, looks like it's canned Roast Spam this year :ok: Saw some on special in Park-n-Rob! I'm going for a part time job down there stacking shelves at night :}

[Kitsune]

Will you still "be very surprised not to be profitable in the second half".......:cool:

[4 driver]

it'll be capped at 10, 20 or 30K....pick your number.
This keeps the ground staff and Cabin Crew happy. They don't care much about us.
This is what CX has done in the past with profit share, and basically that is what 13th month is.
Discretion means whatever they want.

[viking avenger]

Capped in 1999, asian financial crisis

Not Paid in 2001 after 911 and the pilots had been misbehaving most of the year

paid half in 2003 after sars.

2008 at the companies discretion which may be amended from time to time.

[ACMS]

Let me see:

Fuel now 11.0% cheaper than last year

Still 6 months of the financial year to run at that price.

Xmas and Chinese new year coming

Loads still up around 75%, 50,000+ carried just the other day.

Fuel surcharge going a lot further than planned

Starting new freighter services now the price of fuel has dropped.

We will get a full 13th month.

[crewsunite]

I have heard a few guys say esp S/O, that if they do not get a FULL 13M they'll be on their way to Emirates. Esp those whom have not paid provisional tax yet!

Why should they invest in HK Gov & take loans to pay TAX if their company does not invest in their needs to pay bills etc ... Most are trying to save to build their nonexistent balance sheet & buy property once this crisis is over..

So CX stop your propaganda pay your staff to maintain some loyalty. (What is left) Or face a number of departures to the middle east.

Your balance sheet is very strong & you'll be one of the few airlines benefiting from this crisis in the long run. So play ball or we'll put this in I'll remember category!

:8

[ACMS]

The latest IATA Platts Jet Fuel price is out:

for the week ending 24th Oct 2008---

at $85/b, down 6.5% on 1 week, down 35.5% on 1 month and DOWN 18.4% on 1 year ago.

Where will they hide the money?

[luvmuhud]

Quote: "I have heard a few guys say esp S/O, that if they do not get a FULL 13M they'll be on their way to Emirates. Esp those whom have not paid provisional tax yet!

Why should they invest in HK Gov & take loans to pay TAX if their company does not invest in their needs to pay bills etc ... Most are trying to save to build their nonexistent balance sheet & buy property once this crisis is over..

So CX stop your propaganda pay your staff to maintain some loyalty. (What is left) Or face a number of departures to the middle east.

Your balance sheet is very strong & you'll be one of the few airlines benefiting from this crisis in the long run. So play ball or we'll put this in I'll remember category!"



I'd like to say I share your optimism, but I don't believe a significant number of guys will leave due to no 13th month. It'd be great if they did, but they won't.

The longer I spend in this airline job, the more people I meet who are bitter and cynical with the whole airline experience, but for some reason, are still sitting up in the middle of the night flying an airliner.....I just don't get it!!

I flew with a guy recently who, after finding out one of the crew was thinking of leaving, said "Just be careful about leaving a secure job....I was furloughed 3 times before joining Cathay". My question is....what is this guy still doing flying airliners after he has seen how insecure the job can be?????????

Every month I meet more and more pilots who don't like the job, don't like the pay, don't like the lack of professional stimulation, don't like the company etc etc etc, yet are STILL HERE!!!! What a waste of a life!!

Guys.......if you don't like the job, it's definitely not going to get any better......leave and do something you enjoy!

lmh

[Phlap1]

Yeah sit in a freaking office 9-5 doing some mindless nonsense
for even less money, where do I sign.
Hop on public transport in the peak hour in any large city
and get a good dose of how great life is in the real world.
Give me a black windsceen for 14 hours a few times a month,
and let some other sucker sit in an office all their life.

[Humber10]

I see times are so tough they are canceling management drinks (fleet parties).

Does anyone apart from management actually go to them?

[Composite Man]

Unfortunately the current fuel price has very little to do with what CX are paying for fuel at present. This is particularly so given the fact that it appears they may have hedged too much at the high end of the spectrum and are liable for the losses incured when the fuel price drops.

As usual no one in mamagement will take the blame but my guess is the staff will cover the hedging losses through non payment or reduction of 13th month.

[ACMS]

well I've maintained all along that we will get the full 13th month...........................but now I'm not so sure?

Seems they did completely f:mad: up the hedging and yep we will be the ones taking it up the a:mad: and not them.

I certainly hope they hedge the fuel at the current $85/b for the maximum number of years, I don't think it'll ever be less than this now.

Kucking Funts................

[BuzzBox]

Given the doom and gloom coming from the 9th floor over the last few months and the CEOs statement that "conserving cash will be key", I'd say the chances of them paying a 13th month are ZERO. They're so worried they cancelled the 777 Fleet Party next week!

[Composite Man]

I think we can safely assume that 13th month will be non-existant or reduced to pocket change. What will be interesting will be the dividend paid to shareholders. The usual rhetoric of "we all have to share the pain" will be spruced by management to the staff but the same should apply to the shareholders. That's part of the joy and risk of holding shares in any company.

I do, however, doubt this will be the case as in the first half the Company still paid a dividend, albeit a small one, even though they posted a loss of $663 million. What goes against the grain is that this dividend has to be borrowed or paid from the existing balance sheet, in this case $118 million. It may seem like a small amount but it ends up being around a quarter of the monthly staff wage bill. If it's good enough to pay the investors in these times, it's good enough for the staff to receive the same.

[Major-Domo]

History will repeat itself. They will cap it at a level that will keep almost everyone below s/o pay levels happy. Therefore only the pilots will get zip.

[Yeager]

Im cashing in right now - on sick leave. Have it my way or my way. Or my way. I happiely carry extra fuel - 13th month or not.

[arse]

As a matter of interest: What is Cathay's monthly salary cost?

[Lowkoon]

A bit late to be trying to work that out now Tony! :}

[14MonthInterview]

wait! I was under the impression that the losses made in the interim results whilst other airlines turned large profits was partly due to the fact that cathay DIDN'T hedge as aggressively on fuel!? And because we were filling our tanks at market price during the record fuel prices. Can someone explain to me why we are now being told that we are suffering due to our fuel hedging?! Whilst the AOA has written extensively on how the company will be more profitable in the 2nd half with the current fuel prices! Am I missing something here?:confused:

[about_to_jump]

let me guess ... they hedged so much more aggressively when oil was about 140$

now would have been the time to earn their bonus payments, but they f*cked it up - again.
Any moron can run an airline when the economy is under full steam and 1st class tickets sell like warm bread ...

[dogleg]

Anything less than full 13th month is completely unacceptable.

[Apple Tree Yard]

Dogleg...if so, what are YOU prepared to do about it...?

[Numero Crunchero]

Yes I will be very surprised if we are not profitable for the year. This assumes that November and December end up pretty much as October unfolded - revenue about 5% below the target, on a weekly basis, and fuel costs about half what they were six months ago. The profit we make will depend on whether they pay 13th month. If they pay it I would say circa $1billion - if they don't pay it, profit around $1.5billion. We will find out in 5months if I'm right;-)

[ACMS]

And don't forget the BUDGET for this years already takes into account the 13th Month payment to staff.

[T101]

I think the latest memo said they were busily working on reworking the said budget though... :confused:

[Kitsune]

Uuuuuum, you were saying.........:cool:

[Numero Crunchero]

Hey kitsune,
well I must admit I am surprised. How we went from making only $400m or so from hedging when prices were rising to losing $2.8billion when prices were falling, is beyond me. Some very strange hedging practices - minimal on the way up and lots on the way down! Still, if fuel stays around current levels, CX will be making a killing from the fuel surcharges and the last quarter fuel bill should be around $5billion less so that should counterbalance the loss on the hedge book and falling revenue.

So whilst still a brave prediction, I still think we will be profitable, at the operating level anyway. Who knows, they may do with the 772s what they did with the classics - write them down to 'create' a loss.

[ALPHA FLOOR]

Was told today by a manager (dept head) that a buyer has already commited to the 772's, banks though are proving reluctant to finance them ---

This manager in question also stated that the classics are very soon to be thing of the past, much quicker than FOP's has communicated - would not like to be an F/E at present with CX zero job security.

AFL

[ALPHA FLOOR]

BandH -

I agree - todays "Standard" article puts that one to bed for this financial year.

The Standard - Hong Kong's First FREE English Newspaper (http://www.thestandard.com.hk/news_detail.asp?pp_cat=1&art_id=74023&sid=21344964&con_type=1)

AFL

[Kitsune]

Which side of the balance sheet is 10,000,000 shares at HK$15.4, (now worth HK$70,000,000 LESS than when purchased) on? Those who sold at this price were very, very lucky, does anyone know anyone who lucked in......:suspect:

[iceman50]

Why should these analysts be believed, they did not foresee the crash from the credit bubble - just more hot air and guessing. SWIRE are very good at moving money around their various companies that feed Cathay and hiding it well. Yes there is a downturn but this is just a good way of trying to screw the staff, who have worked hard to save money only to have it wasted on "illegal" cargo dealing and supposedly poor hedging. They should think back to the effect that the GFI had on not paying a profit share, fuel costs rose and other savings were at a reduced level.

[tiger321]

I think that if no 13th month/capped 13th month is paid the fuel bill will increase substantially. That is not to say that people will add huge amounts of fuel but rather not bother to do the little things - not adjust the fuel down when ZFW drops, not ask for short cuts, not step climb because of the "turbulence" etc, etc. The list can go on and on.

The difference will be very noticeable at the end of the day I would imagine.

I think it would be very bad business sense to punish the staff, who have done the little things all year (and made a huge difference), because some bad/unlucky decisions were made upstairs.

If things stay the same all through next year then fair enough - I would accept no 13th month. This year is a different story though.

[flyboy007]

Out of interest, when is it announced whether 13th Month and Profit Share will be paid?