Damned by the Financial Times

[Trafalgar]

Well, more congrats to CX. Managed to make the headline article in the weekend Financial Times paper. Basically, their financial editor concludes that we are crap. Suggest that the recent announcement was long on jargon and short on any financial plan. Also, that it was time to take a broom and sweep away the Swire management, starting with the CEO. Of course, what does the FT know...?:ugh:

[Icarus2001]

It is a truism of business that the management team that gets a business into a mess cannot and will not be the one that unravels the mess. Wrong mindset.

[Yonosoy Marinero]

Well, color me shocked....
:hmm:

This is so evident that the FT probably let the intern write this one.

It's all in the hands of the shareholders now. As Icarus said, those idiots behind the wheel are the ones who drove us into the ditch in the first place. They won't be the ones to put us back on the road.

[Freehills]

Cathay Pacific: go pilot fish The Hong Kong airline has been slow to respond to competition on price and standards

Shareholders in Cathay Pacific may not agree. The Hong Kong airline’s shares are at a level usually associated with financial crises. Some woes are beyond Cathay’s control. China-based rivals are piling on capacity, adding direct routes to cities that would once have required a Hong Kong stopover. The territory’s government scrapped fuel surcharges and imposed extra airport costs to finance a runway. US airlines, whose domestic routes are now reliably profitable after heavy consolidation, are taking a renewed interest in Asia. But Cathay has been slow to respond. Flyers say its service has fallen behind standards set by Middle Eastern airlines. Losses on its badly timed fuel hedges have limited its ability to compete on price. So too have costs higher than rivals like Singapore Airlines, JAL or Qantas. A long-awaited review this week was longer on jargon than financial targets. The shares, which over five years have lagged behind even legacy European airlines, fell 3 per cent. New blood at the top would inject urgency into Cathay’s restructuring. The current chief executive was promoted internally. No non-executives are independent of big investors Swire Pacific and Air China. British Airways once changed its culture by hiring former Cathay boss Rod Eddington. He cut costs and axed Concorde, leaving the airline solidly profitable. A similar hire could help Cathay conform with Stevenson’s maxim that life is often about playing a poor hand well.

[Captain Dart]

Yeah, just what CX needs, Red Oddington to come back and make yet more cuts. In my opinion, his tenure at CX in the nineties marked the start of the decline of this airline that once led the world in quality, service and long-haul operations. He also ran Ansett, which not long after ceased to exist. Grounding Concorde, while possibly financially necessary, would not be something I would be proud of.

But he could bring back his 'Commitment Days'.

[Starbear]

Trafalgar:
Not really , I would suggest confirmed by the Financial Times. They have said nothing different from all that you guys have said here and elsewhere.

Pilots by and large are a cynical, sceptical and questioning group and that is generally a good thing. The "Strategy on a Page " is nothing more than pure unmitigated "guff". Seriously try and decipher any section (or God forbid "pillar") into plain English or Chinese and I suspect most will struggle or even fail. Take the now infamous "digitally focussed" Really? WTF? Do they mean IT or online. If so, don't I recall much trumpeting of CX leading the away with cutting edge IT (whilst still failing to have fully intregated internet through Cathay City even now)? Although to be fair they are very very fond of trumpet blowing.

Back to the main point, AT in the Friday Flyer stated that the review of FOP will take approximately 6 months. 6 months just to discover what needs fixing before any actual action. What have they been doing for the past 12 months when the clues must have already been there for all to see.

I have seen this before in other companies where they employ consultants etc to come up with super guaranteed fixes for everything. But first you must have a list of buzz words and phrases and ensure all buy into them. Therein lies the problem because most people at the coal face recognise the busll**** that it is and refuse to comply and so are seen to spoil the party.

[GMEDX]

Hopefully digitally focused means that they are finally going to pull their finger out but somehow I doubt it.

[Flex88]

Come on gang, what the hell are ya talking about re "Shareholders in Cathay Pacific" ?
There are 2..... And make no mistake - they Hand Pick the top managers❗️
The 360 "Top Managers" that just met - Google "The Peter Principle" it explains..
Nuff said...

[joblow]

I have to agree with Capt Dart . Eddington's tenure was the beginning of the downward spiral at Cathay .
You cannot cut the quality of your product and expect no push back from the passengers who are paying good money for their tickets and have choices as to where they spend it .
This goes even further , if you treat your frontline staff with contempt, cut their pay and benefits. Then you have to be naive ( and I am being very polite with my choice of words here ) not to realise that the service standards will slip .
It's gotten so bad that the "couldn't care less attitude " from frontline staff has permeated every aspect of our business. The passengers and especially our premium ones are voting with their feet, moving to the Mid East carriers . If you have ever travelled on one of these airlines you would know that their product is so much better than ours that they aren't coming back any time soon .
Our food is for the most part inedible, it used to be amazing, our first class product ,when we have one , is questionably worth the price differential .
What this airline desperately needs is a CEO who understands that a happy workforce equates to a great service product . The only way to achieve that is to invest in your product and the workforce .

[Freehills]

It isn't even clear what sort of airline they want to run. "A life well travelled" can apply to an LCC as well as a first class airline.

Plus - great service product and profits don't go together. Most profitable airlines in the world (Delta/ AA/ Ryanair/ SW) specialise in delivering product people are willing to pay for, rather than the product they aspire to

[ron burgandy]

I really believe they're so far on the back of the curve now, there's no recovery.
The only way forward I see is to turn up to work, do a good job so you feel professionally happy, forget about everything outside of the flight deck related to CX, collect the pay each month, make sure you spend it on the things that are most important to you, and put your welfare far ahead of the company's.

[Avius]

This sums up what needs changing before anything else.

Fast forward to about 6:00 of the video:

Jack Welch on Why You Want the Muscle of a Big Company but the Soul o? (http://www.slideshare.net/LinkedInPulse/jack-welch-linkedininfluencerinterview)

[Cafe City]

More likely https://www.youtube.com/watch?v=r2wPmi6WEJ8

[McNugget]

Spot on J-blow.
Have a look at the '4 pillars', there is no mention of 'happy' employees. Just lots of jargon relating to reviews, systems and programmes.

It's so simple isn't it? Develop a happy and proud workforce and everything else will fall into place. Of course the opposite is true as well. Get your workforce offside, nobody cares anymore and it all begins to crumble away- as we are currently seeing.
The workforce is the key-but the senior management just view us as a cost item that needs to be pared down constantly. So until management see us as the solution and not the problem, this downward spiral will continue.
Very well put.

It was a glaring omission, and it's been picked up on by all front line staff I've encountered. It really would be the single, most effective measure, and would pay for itself in spades.

Ron B,

Regarding the drag curve, I'm not so sure. A happy workforce would absolutely reverse the declining opinion of CX, and bring premium numbers back in droves.

American Airlines was a basket case, and granted, it went bankrupt - however, during the merger post-bankruptcy, Horton (CEO) gave every pilot and flight attendant HUGE pay rises. He stated it was because the reputation of both carriers is utterly horrific, the product and service is a woeful result of death by a thousand cuts (sound familiar?) and he needs all hands on deck to get through the merger. And it worked. Their product and service has improved 10-fold and they were the worlds most profitable airline in 2015.

CX top brass could get us all in side, and the results would be spectacular. By and large, you have a well-trained, professional, motivated team up front. But, apathy reigns. It's a deeply unhappy group. How any people manager thinks that's how to extract the most value from that manpower is beyond me.

Aft of the flight deck door, you have leaders that have seen the good days.
They would love to have them back, but they aren't given the tools to, and they no longer have a reason to care. These are the customer facing employees. I believe the fancy term for that is a "touch point".
Well, that touch point is now a handshake with an electric shock prank toy.

We hear plenty of stick for cabin crew here, but I personally think that they've done a remarkable job to hold on to any semblance of service quality for this long.

Inspire them, and watch what happens. By inspire, I mean treat them properly and give them a few basic tools to enhance their offerings. They WANT to offer premium service. That's why they joined.

Invest in the people, and you'll hardly even need to invest in hard product to reverse the trend.

Apologies to the other employee groups who I make no mention of. I'm sure they have similar points of view. I just don't get to see their perspectives while on the job.

This is so easy. It would take time, but it's easy. Unlike deciphering that nonsense email.

Time to wake up, rather than time to win.

[Yonosoy Marinero]

collect the pay each month, make sure you spend it on the things that are most important to you,

It would be wiser to put it on a solid saving plan rather than spending it...

This airline is either headed for oblivion and the corporate chop shop, or someone will wake up and hire a restructuring specialist to put it back on track, and these guys usually come equipped with a rather blunt payroll-cutting axe.

Either way, the idiots who are sinking this airline are taking our job stability with it.

[AtoBsafely]

"Invest in the people"

Yes! Unfortunately we have 350 accountants in charge, and no leader in sight.

[Strewth]

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[Strewth]

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[flyingkiwi]

Rob Fyfe the leader that appeared in an air nz safety video in only body paint. now thats leadership.

[Shep69]

Very well put.

It was a glaring omission, and it's been picked up on by all front line staff I've encountered. It really would be the single, most effective measure, and would pay for itself in spades.

Ron B,

Regarding the drag curve, I'm not so sure. A happy workforce would absolutely reverse the declining opinion of CX, and bring premium numbers back in droves.

American Airlines was a basket case, and granted, it went bankrupt - however, during the merger post-bankruptcy, Horton (CEO) gave every pilot and flight attendant HUGE pay rises. He stated it was because the reputation of both carriers is utterly horrific, the product and service is a woeful result of death by a thousand cuts (sound familiar?) and he needs all hands on deck to get through the merger. And it worked. Their product and service has improved 10-fold and they were the worlds most profitable airline in 2015.

CX top brass could get us all in side, and the results would be spectacular. By and large, you have a well-trained, professional, motivated team up front. But, apathy reigns. It's a deeply unhappy group. How any people manager thinks that's how to extract the most value from that manpower is beyond me.

Aft of the flight deck door, you have leaders that have seen the good days.
They would love to have them back, but they aren't given the tools to, and they no longer have a reason to care. These are the customer facing employees. I believe the fancy term for that is a "touch point".
Well, that touch point is now a handshake with an electric shock prank toy.

We hear plenty of stick for cabin crew here, but I personally think that they've done a remarkable job to hold on to any semblance of service quality for this long.

Inspire them, and watch what happens. By inspire, I mean treat them properly and give them a few basic tools to enhance their offerings. They WANT to offer premium service. That's why they joined.

Invest in the people, and you'll hardly even need to invest in hard product to reverse the trend.

Apologies to the other employee groups who I make no mention of. I'm sure they have similar points of view. I just don't get to see their perspectives while on the job.

This is so easy. It would take time, but it's easy. Unlike deciphering that nonsense email.

Time to wake up, rather than time to win.

This is spot on, but also what I was preaching over a year and a half ago. Not much has changed. Nor has there been much willingness to change or really even listen much.

[arse]

Those Rob Fyfe videos should be compulsory viewing for EVERY Cathay employee. ESPECIALLY MANAGEMENT!

When he started, he was known as "Fyfe the Knife", but eventually being customer and employee focused, turned the airline around and was respected but most.

[Arfur Dent]

Name me ONE Senior Manager that you think is a Leader you would follow into battle………

[Arfur Dent]

Now from the "Good old days"??
Peter Sutch
Mike Hardy
Stuart John
Hal Dyball
Paddy Anderson
Keith Thompson (take a glass with you!)
etc etc

[GTC58]

Let's face it, the only solution to safe CX is to shrink the airline back to a healthy size and focus on our core premium business. Improve the product significantly, increase yield. Of course that means less aircraft are needed, some analysts would say a fleet below 100 aircraft. I think it is prudent for pilots with a seniority number in the bottom 20% to work on plan B, because whats coming in the next 2-3 years is unavoidable.

[Gnadenburg]

What about the guy about about to join Dragon, who'll be a Captain in 12 months, a training captain in 18 months and flying former CX wide bodies over current CX routes a few years after that? That's if the group survives intact of course.

I shake my head. That was avoidable!

[Freehills]

Yeah, but the merger with KA was a takeover goddammit and no way can we talk to those guys about anything except a staple to the bottom of the CX seniority list because takeover not merger and CX management would never take advantage of that they probably don't even know what a whipsaw is because takeover not merger

[Gnadenburg]

Reads 5 by 5 to the KA guys.

We're used to unintelligible and incessant white noise. :ooh:

[Strewth]

CX flighties save the day (http://www.traveller.com.au/flight-test-cathay-pacific-economy-melbourne-to-hong-kong-gtv52m)

[Yonosoy Marinero]

Here's another one (http://asia.nikkei.com/Business/Companies/Cathay-Pacific-a-fallen-star-of-the-air)

Just in case anyone had doubts as to what the financial community thinks of CX these days...

[cxorcist]

The sad part is that this financial crisis is/was entirely avoidable. Hong Kong is still one of the most profitable airline markets in the world. Just ask any other airline who flies here, which are most of them. So it's not that their wasn't money to be made, but rather that CX is so poorly managed that they have literally screwed themselves out of good fortunes, not that their bonuses would reflect this reality.