Show me the money

[controlledrest]

I have seen no evidence whatsoever of the company being in financial trouble, therefore I see no need for any concessions.

The fuel hedge will pass, then margins will improve.

The pressure on airfares from HKA will pass, sooner or later they will have to raise their fares to provide a return on investment.

The office staff redundancies were over due. Too many people pushing paper in circles not achieving anything. An incredibly poorly managed company with inept staff following dumb policies.


This is what I want to know:


Who was the fuel hedge with?

Did any company associated with Swire make money on the fuel hedge?

Is it true that the Swire owned company HAECO charges CX three times what they charge other carriers for a turn around, and HAS charges $1800 for a bus trip to the airport?

If it wasn't for the fuel hedge, cargo price fixing fines and transfer pricing, what would the CX profit/loss be?

Did the managers in the chain of command who approved the fuel hedge and the illegal cargo price fixing receive performance bonuses? How much? Why?

[Sea Eggs]

It's all smoke and mirror. Typical Honky management style. Give them nothing, boyz and gals. The company is not going to sink.

[Some How I'm Tired]

Dan has got it right. All we hear about is the amount of money that CX is losing.

But then they go and purchase 40% of an associated airline!! Spending money like drunken sailors.

Honestly, these people are so full of S*#T it's not funny. It's the expectation management style that always comes out during negotiations. I can't wait until the announcement that HPE has failed because the Union wouldn't submit to all of their demands. It's all the pilot's fault!

New contract anyone?!

[Trafalgar]

In all my years in CX, I have never gone wrong by assuming the truth is exactly the opposite of what management is telling me. And i'm not kidding.

[Flex88]

Haeco, Haesl, Cathay Catering, HAS, etc. ALL simply a legal method to suck cash out of a very profitable company. At the end of every year - no profit to trigger profit sharing. BS. Profit sharing from all those companies go to Directors, GM's and up. Just not the people who make it happen..

Fuel Hedge may very well be one of the above.... you decide:*

[betpump5]

Rod,

Seems like you flew with Sam Ting Wong?

I guess I was wrong in thinking who the real STW is.

[Trafalgar]

What a great post CR. Many other items we could add to that list. You make a great point: why does the AOA not properly educate new joiners about the history of this company? We need a properly written precise of the history, particularly since the early 90's, clearly and concisely laying out all the deception, intimidation, threats, attacks and fiascos. This management is not fit for purpose, and is still in place undermining and devaluing the careers of those here now, and those to come. Without a proper understanding of what happened over the past 25 years, the new generation begins to accept the current dysfunction as 'normal'. Once that becomes the accepted narrative, all is truly lost. AOA, get someone to draw up a document that clearly lays out the past, and how egregious our managements actions have been. We can't allow ignorance to replace witness and testimony to history. Everyone in this company needs to know the truth, and the nature of the 'beast'.

[kiwicx]

CR looks like you have flown with Adelaide GS's son. Sounds exactly like the conversation i had with him, absolutely no clue apart from the the company is the best. Apple hasn't fallen far from the tree

[Freehills]

I think rising competition is an issue. But it is more a issue for the airlines than the crews. Especially if the trend of paying decently for a few extra crew continues (China contracts)

The ultimate end game will be like the US. Consolidation to a few companies, that control the market well enough to pay reasonably and make a profit.

[Scoreboard]

Give the poor chap a break....his Dad can't remember any of that list happening so how would you expect his son to know?

cause he snorted too much?

[BlunderBus]

PLease explain to me how, that in the historical years, when fuel was at $80 and way above..the airline managed to make billions in profits? Yet now by simple comparison to other airlines paying less for their fuel we managed a paltry income?.
Surely such comparisons are irrelevant. Imagine fuel at $85/barrel for the last 10 years straight...you're telling me every year would have incurred a loss?...BS.
I've seen spot fuel at $150+ and still we were in the black and handsomely.

[BlunderBus]

One simple question..let's be transparent about the fuel hedging.
Who was on the other end of the swap? Let's hear it.
I was wondering if any company diverted funds when the staff have a contractual profit sharing formula..wouldn't that be fraud?

[flyhardmo]

It's only fraud if you get caught.

[Progress Wanchai]

One simple question..let's be transparent about the fuel hedging.
Who was on the other end of the swap? Let's hear it.
I was wondering if any company diverted funds when the staff have a contractual profit sharing formula..wouldn't that be fraud?


The staff profit sharing is spare change compared to the real laundering.

This place is a modern day Enron. A minor share holder with total management control awarding contracts and diverting money to companies that management own 100 percent of. Good work if you can get it. Ken Lay would be proud.

They don't even try to hide the scam. Senior CX management are paid bonuses based upon Swire's profits, not Cathay's.

[Average Fool]

Would any of us expect anything other than shady dealings?

It's all these people know.

[Trafalgar]

Eventually we all end as dust, and so will the Swires. The difference will come in the accounting afterwards. The meek shall inherit... There is a time and place for everything to be accounted for. They may think they are accomplishing one of the great business cons of all time. If only they knew. Yes, this place is malignant, corrupt and a corporate misery. Just be glad you do an honourable job and represent an honourable profession. Be glad you are not one of the non-pilot management, for there surely is evidence of all that is horrible within the realm of humanity.

[BusyB]

Think the pilot management are just as bad.

[Flex88]

The staff profit sharing is spare change compared to the real laundering.

This place is a modern day Enron. A minor share holder with total management control awarding contracts and diverting money to companies that management own 100 percent of. Good work if you can get it. Ken Lay would be proud.

They don't even try to hide the scam. Senior CX management are paid bonuses based upon Swire's profits, not Cathay's.

The above - Swires would call this "Capitalism with Asian Values"

[Howtosayit]

PLease explain to me how, that in the historical years, when fuel was at $80 and way above..the airline managed to make billions in profits? Yet now by simple comparison to other airlines paying less for their fuel we managed a paltry income?.
Surely such comparisons are irrelevant. Imagine fuel at $85/barrel for the last 10 years straight...you're telling me every year would have incurred a loss?...BS.
I've seen spot fuel at $150+ and still we were in the black and handsomely.

The Key is the fuel surcharge. Back in 2013 ~ 2014 CX charged more than 10% of ticket price for fuel surcharge. That's a whooping $1000 dollar each way for long hauls.

Hence the revenue and yield drop last year as all fuel surcharge were cancelled.

[Howtosayit]

Haeco, Haesl, Cathay Catering, HAS, etc. ALL simply a legal method to suck cash out of a very profitable company. At the end of every year - no profit to trigger profit sharing. BS. Profit sharing from all those companies go to Directors, GM's and up. Just not the people who make it happen..

Fuel Hedge may very well be one of the above.... you decide:*

Though I'd agree CX's situation is not as dire as it claims, this is far from the truth. CX reports their P/L as a whole Cathay Pacific group which includes HAECO, Catheting, vogue etc. The money made by these associates have been included in the final results.

If you look at its core business (I.e. Flying) the loss is even greater. Of coz mostly because of the fuel hedging .

[Sam Ting Wong]

Gents,

a balance sheet is always manipulated, at any company in any given year. This is not a problem, firstly because analysts can see thru it, secondly because it actually might make good sense from a companies point of view to shift profit/loss into the previous or next year ( tax, finance, fool employees etc). In the end it is a zero sum game however,over a few years these manipulations equalize each other.

It is not possible however to "secretely" turn losses into profits elsewhere, not legally at least. Imagine all the hundreds of people who look in detail at the balance sheets of Cathay Pacific. Do you think they can be fooled that easily? CX is a public company, there are rules, plus all the shareholders like Air China, a very long list of people who have to be deceived, professional and trained accountants, journalists, insiders, etc.

To claim the hedging loss is a scam is clearly in conspiracy theory territory. Sadly, it was just a foolish bet, and we all have to pay for it now. Think of it as a family with the man of the house suffering from a betting addiction. No toys for the kids this christmas..

Is management trying to deflect public interest from the hedging disaster? You bet.

But what is the point of this discussion in the end? Does it really matter if the loss is due to hedging or due to competion/ currency movements/ cargo weakness etc?

The only argument I could find is:

we know hedging will be gone at some point. Bur mind you, fuel could be up in price by 2018 again, there could be another crisis we don't expect right know, middle east war, you name it.

The golden rule in a cyclical business like aviation is and always will be:

Make hay while the sun shines.

I hope you remember this next time the company is in the mood to offer a payrise.

[Progress Wanchai]

Though I'd agree CX's situation is not as dire as it claims, this is far from the truth. CX reports their P/L as a whole Cathay Pacific group which includes HAECO, Catheting, vogue etc. The money made by these associates have been included in the final results.

If you look at its core business (I.e. Flying) the loss is even greater. Of coz mostly because of the fuel hedging .


Wrong.

CX no longer ownes any HAECO shares. It's now majority Swire owned. Another entity through which Swire management shuffle other people's money into Swire hands.

The "core business" (i.e. Flying) lost 3.5B on the back of an 8B hedge, making 4.5B if the bean counters hadn't got involved. A healthy return of about 4 percent which is better than average over the past 20 years.

Look at the numbers, not the spin.

[Trafalgar]

Please, everybody stop listening to the manipulative drivel being spewed out by our management. Simply put, if they had an ounce of common sense in their hedging strategy, they would have made BILLIONS in profit the past two years. As far as things pertains to the employees (you know, the people that actually make an airline business possible), strip out any effect of hedging. Whatever the resulting number is, THAT is the one you relate to how you reward your employees. Not a single one of us should suffer for the epic foolishness of a few unaccountable, arrogant and stupid managers who squandered billions. CX/Swire has many times that in reserve, and they can treat their employees accordingly.

[Howtosayit]

Wrong.

CX no longer ownes any HAECO shares. It's now majority Swire owned. Another entity through which Swire management shuffle other people's money into Swire hands.

The "core business" (i.e. Flying) lost 3.5B on the back of an 8B hedge, making 4.5B if the bean counters hadn't got involved. A healthy return of about 4 percent which is better than average over the past 20 years.

Look at the numbers, not the spin.

I stand corrected. HAECO is not one of them. However it's not making big money either. HAECO's 2016 profit is merely $38 million HKD.

[Howtosayit]

Please, everybody stop listening to the manipulative drivel being spewed out by our management. Simply put, if they had an ounce of common sense in their hedging strategy, they would have made BILLIONS in profit the past two years. As far as things pertains to the employees (you know, the people that actually make an airline business possible), strip out any effect of hedging. Whatever the resulting number is, THAT is the one you relate to how you reward your employees. Not a single one of us should suffer for the epic foolishness of a few unaccountable, arrogant and stupid managers who squandered billions. CX/Swire has many times that in reserve, and they can treat their employees accordingly.

Absolutely 100% agree with you.
Was disappointed not seeing the union posting any strong counter to the company's spin. The company attributes the drop of revenue and yield to strong competition etc, which is total BS.

The drop was mainly due to the cancellation of fuel surcharge, which effects should be offset by a falling fuel price. Yet I saw no one mentioning it or even understanding it! Dafuq?!