KA Narrowbody order

[goneferrying]

http://iis.aastocks.com/20170821/002897368-0.PDF

[cxorcist]

I suppose CX will be ordering the PW GTFs on those since CX can't seem to be bothered to pay attention to the rest of the industry and the trouble operators have had with those.

[Krone]

So there's 31Billion available for this order , but so far , the DPA are being told there's nothing in the pot for salary increases next April. Another year of Zero percent . Thats two on the trot. A big hit . Go figure guys.

Oh , and I laughed out loud when I saw this news. Ffs, were they ever going to order anything else?

Good to hear KA are going to now increase frequencies on current china routes . and compete with HKE . Well done.

[goathead]

Well then its a matter of urgency that the DPA enters contract compliance ASAP isn't it , crying poor 24/7 is just smoke and mirrors.This company is not cash poor. Add in the recent acquisition of AHK , this current regime of deadpan psychopants and their continuous run of henny penny the sky is falling dribble has to of run its course surely right?

[Liam Gallagher]

Reading the manifestos of those standing for the GC, I can see one candidate has gulped the Koolaid and refers to "the company's precarious financial position". I wonder how he reconciles that view with this substantial Airbus order, AHK purchase and the fact that a fairly savvy investor has just taken a 9% stake in Cathay.

He will get re-elected, but he will do so without my vote.

[drfaust]

I have no doubt that should the DPA not be able to reach an agreement with the company a vote will be held. And if and when that vote occurs, the membership will decide their own fate.

[goathead]

Unbelievable
And these are the candidates running for our GC . We are all screwed.
Add in the current GC and their HPE dribble its pure comedy, beyond belief.

[Shep69]

Well then,

It DOES look like we have boatloads of cash.

The supposedly 'broke' family in the valley claiming adversity just bought a couple of mansions on the hill. No telling how the new place will turn out, but it's pretty hard to lament how poor you are when you just got a few new shiny places and a couple of new cars.

No problem :)

[GTC58]

Well then,

It DOES look like we have boatloads of cash.

The supposedly 'broke' family in the valley claiming adversity just bought a couple of mansions on the hill. No telling how the new place will turn out, but it's pretty hard to lament how poor you are when you just got a few new shiny places and a couple of new cars.

No problem :)

CX and Dragon don't have boat loads of cash, rather the opposite. These airframes will be either leased or financed.

[Trafalgar]

GTC58: if you believe that, then...a) i feel sorry for you, and b) you will get the career you deserve. CX has a mountain of cash, they just don't want you to have any of it. Once you figure out that distinction, it all becomes clear. (just a hint: I don't see any of the managers taking a pay or bonus cut. As a matter of fact, they awarded themselves raises...might be worth pondering)

[Liam Gallagher]

GTC58,

People don't lend airlines money or lease them aircraft unless they are sure they will get their money back or the lease payments made. Unlike pilots, these people are not stupid and do their homework and read the fineprint.

The lenders will have seen that 84% of all Cathay Shares are held by 3 Companys, Swire Pacific (worth $HK113bn) Kingboard Chemicals (worth $HK34bn) and Air China (which is backed by the Chinese Government). These 3 shareholders have deep pockets and they are not going to let Cathay fail and they will not passively watch their investment disappear.

[GTC58]

GTC58,

People don't lend airlines money or lease them aircraft unless they are sure they will get their money back or the lease payments made. Unlike pilots, these people are not stupid and do their homework and read the fineprint.

The lenders will have seen that 84% of all Cathay Shares are held by 3 Companys, Swire Pacific (worth $HK113bn) Kingboard Chemicals (worth $HK34bn) and Air China (which is backed by the Chinese Government). These 3 shareholders have deep pockets and they are not going to let Cathay fail and they will not passively watch their investment disappear.

Actually Swire owns one of these aircraft leasing companies. I merely pointed out that CX will not buy these airframes cash as one of the posters implied.

[Trafalgar]

No. What you said was "CX and Dragon don't have boatloads of cash". Incorrect. They have mountains of cash....but again, just not for you (or me).

[GTC58]

No. What you said was "CX and Dragon don't have boatloads of cash". Incorrect. They have mountains of cash....but again, just not for you (or me).

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.

[Shep69]

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.

[Trafalgar]

Oh, so you must be just as equal a financial genius by claiming the opposite? I've been here longer than I care to admit, and the one PLAIN AS DAY fact that is clear in my head after all that time is that whatever CX tells you, you can safely assume the opposite. They have been salting away billions for the past 40 years. Due to an incomprehensible but short-term incompetent cock-up with fuel/currency/freight buildings, they are now suddenly claiming poor. The reality is sadly predictable: they are following the adage of 'never let a crisis go to waste', so of course they are happy to manipulate 'easily fearful and led' employees (not you of course :rolleyes:) into believing the sky is falling. Once they start firing managers, and cutting their pay and benefits substantially, then maybe i'll sit up and take notice. Until then, seen it all before, and it's getting tedious to keep having to witness it. They are liars extraordinaire. From that realisation flows all understanding.

[azhkman]

I suppose it depends how you define cash: https://www.cathaypacific.com/content/dam/cx/about-us/investor-relations/interim-annual-reports/en/CX16_Final_en.pdf

In Current Assets, it shows just over HK$20b on the balance sheet (p.86 of 120, note 18). Just under HK$10b which would be classified as 'cash'. Likely, they'll have to finance at least in part, this aircraft purchase. There's no shame in that, many airlines do, and it is one of the better assets that earn a return once deployed.

I don't see an airline that is in dire straights from the financials, but I do see one that has made a significant blunder. Assuming the hedging losses are over, and provided additional blunder(s) are not made, one could state that they would be profitable come 2018/19.

Separately, given the holders of CX (the big names, not the small cheeses), I don't think anyone would hesitate to finance aircraft for them. Worst case, CX folds and they transfer the assets to Air China HK Limited (A HK registered company).

[Gnadenburg]

Oh , and I laughed out loud when I saw this news. Ffs, were they ever going to order anything else?


Yes me too. It was like the competition to give a new name to Dragonair House. Which was won by those who suggested Cathay Dragon House as if it was going to be named any differently.

There was no way Dragonair had the ability to transfer to Boeing. The airline is driven by a Airbus-cadet ethos. All training shortcomings, including structural and ab initio, are mitigated by Airbus technology. Perhaps the board also realised the hard, cold facts that KA has one of the industries most costly command training programs that delivers what to some management, is a satisfyingly high failure rate. A Boeing switch-over could have been a disaster.

[Gnadenburg]

BTW can we keep it to a KA thread? Or keep the AOA relevant to the discussion? I mean WTF are you guys doing as your regional op's being white-anted by KA?

Don't mid-seniority CX F/O's see their commands taxiing past in KA colours? The "it's a take-over, not a merger" rant must seem awfully distant?

[Freehills]

Oh, so you must be just as equal a financial genius by claiming the opposite? I've been here longer than I care to admit, and the one PLAIN AS DAY fact that is clear in my head after all that time is that whatever CX tells you, you can safely assume the opposite. They have been salting away billions for the past 40 years. Due to an incomprehensible but short-term incompetent cock-up with fuel/currency/freight buildings, they are now suddenly claiming poor. The reality is sadly predictable: they are following the adage of 'never let a crisis go to waste', so of course they are happy to manipulate 'easily fearful and led' employees (not you of course :rolleyes:) into believing the sky is falling. Once they start firing managers, and cutting their pay and benefits substantially, then maybe i'll sit up and take notice. Until then, seen it all before, and it's getting tedious to keep having to witness it. They are liars extraordinaire. From that realisation flows all understanding.

Um. They did just fire 200 or so managers.

[Trafalgar]

I think you know exactly whom i'm referring to when I say 'managers'. A few local paper pushers, of who we employed far too many to satisfy the 'iron rice bowl' concept is not what i'm on about. When I see a AT, RH or someone on the exec level get the boot (and Ivan doesn't count...as he was 'promoted') then i'll take notice. And as I said more pointedly, when THEY take a pay and benefit cut then maybe the discussion can start. I swear, the number of us on this forum that seem to want to support our management as they drive the airline and our careers into the ground is stupefying. :ugh:

[landrecovery]

When they say managers, try to find anyone in CX/KA without manager in their title.
Assistant manager, deputy manager and so on.
They sacked a bunch of secretaries 🤓 Anyone who makes bad decisions were kept as they could blame others 😃

[Strewth]

The Airbus Aircraft are intended to be operated mainly by Cathay Dragon.


And not in the main.

The aggregate consideration payable for the Airbus Aircraft, reflecting arm’s length negotiations between the parties, will be lower than the catalogue price.

127 million dollars a jet, list price, come in spinner, demo or factory fresh, free tank of gas, what'd ya reckon, give us a number big guy.

Shareholders and potential investors are advised to exercise caution in dealing in shares of Cathay Pacific.

Though they have to say it, shows a certain level of self awareness and from the horses mouth no less.

[Freehills]

One director did leave the group entirely. DC.

[BlunderBus]

If you want the answer lean back and read the plaque on the back of the cockpit door...This aircraft is owned by:
windemere 5 company via.. mitsui bank via...the amazing flying wheel company of bermuda via..CPA finance via ..CPA...via various interested partries!!
Imagine the bite out of the cherry each of those could take.

[Trafalgar]

Imagine the offshore funds that are being scythed off for members of the Swire family and a few favoured executive. All the better to reduce profit sharing (i've forgotten, what was that....?) and pay and benefits for the mill workers....

[Flex88]

Anybody realise that @ 4 Billion US....... very close to the total amount of losses
due the magnificent Fuel Hedge gamble.

32 freakin aircraft worth.......:rolleyes:

[mngmt mole]

I know airlines that have less aircraft than that. Eventually observers of the industry will look back at what point this airline failed, and destroyed it's future. The day the bean counters decided that their least valuable asset were their employees. 1993. After that, it's been a sad and inexorable decline towards oblivion. Not far to go now :mad:

[Gnadenburg]

Still trying to keep this a KA thread so let's try this?

A321 Neo Crew Contract Compostion. C Scale Training Captain, MPL Cadet Second Officer doing First Officer Duties. Six Cabin Crew, junior, on most recent contracts, perhaps one or two mainland based crew on half again. Eng support is lean. The cost base transition is the fastest at KA.

The 321 numbers suggest KA's continued expansion in a number of areas. Creating new markets? Or more deliberate expansion over CX's regional network?

Are junior to mid-seniority CX F/O's suffering a legacy stupidity? I'd be resigning and joining KA.

[swh]

Why would a CX FO jump to KA to fly the NEO which will be some time away yet due to the backlog (Airbus has a backlog of 5545 A320 series at the moment, yes not a typo over five thousand aircraft).

By the time the NEOs arrive those CX FO who have just upgraded will be going through command courses.

The NEO will be years away.

Nice wind up.

[Gnadenburg]

It wasn't a NEO specific command. I'm just saying look at that cost base, look at current circumstances and how tempting will it be to transfer as much of CX over to that cost base?

I'm not interested in winding anyone up but I am flabbergasted at the mindset and expectations of junior to middle seniority CX pilots given the present circumstances. Your command opportunity may never exist.

A year or two ago KA had a 0% pass rate on command. This year they are budgeting for a 75% pass rate which is interesting in itself.

For the CX pilots not to have seen this coming at the take over of KA was foolish. It's probably too late to do anything now, even the QF/J* option of transferring across wouldn't gain traction due the toxic industrial circumstances.

[cxorcist]

Does KA have a lower cost base than CX? How so? KA expats have a better contract than CX and their cadets make more money. So wtf are you talking about?

[AtoBsafely]

It's the efficiency of their operations through the mainland!

;)

[Gnadenburg]

Does KA have a lower cost base than CX? How so? KA expats have a better contract than CX and their cadets make more money. So wtf are you talking about?

Not unexpectably you've missed the logic. The cost base transfer is far quicker at KA.

Virtually all of our command promotion is on the C scale. Our F/O's are mostly on C scale and our Second Officers have to be cheaper because they operate as First Officers. Cabin crew. What do you think a mainlander makes?

What don't you get?

[Threethirty]

BlunderBus has been saying this for a long time

[drfaust]

Has anyone considered that maybe it was just long overdue to replace the KA Narrowbody fleet with something more modern?

These things should be coming in now, not in 2020, because the airlines we compete with in that segment all already have brand spanking new planes and operate on totally different efficiencies. You know who I am talking about here.

Regardless it is good news for us line drivers that the quality of our equipment is going to markedly improve over the next several years.

[Freehills]

Has anyone considered that maybe it was just long overdue to replace the KA Narrowbody fleet with something more modern?

These things should be coming in now, not in 2020, because the airlines we compete with in that segment all already have brand spanking new planes and operate on totally different efficiencies. You know who I am talking about here.

Regardless it is good news for us line drivers that the quality of our equipment is going to markedly improve over the next several years.

172 seats vs 230 seats in the same aircraft...

[cxorcist]

Not unexpectably you've missed the logic. The cost base transfer is far quicker at KA.

Virtually all of our command promotion is on the C scale. Our F/O's are mostly on C scale and our Second Officers have to be cheaper because they operate as First Officers. Cabin crew. What do you think a mainlander makes?

What don't you get?

Here's what I don't get... You actually think that crew costs are primary in determining which flying goes to KA. Forget branding, flying rights, the market at destination, etc.; the only thing that matters is crew costs. Wow, that's thick!

By your own admission, it's merely a faster transference to the cadet scheme, and KA cadets actually make more than CX. So for a temporary cost savings, all the flying is heading to KA. I seriously doubt it. Even CX managers aren't that dumb. Wait, maybe they are, but let's hope not.

CX/KA can barely crew the flying they have, much less be picky and choosy about who flies what. Maybe KA sees more growth than CX going forward. That seems possible, but I don't think we will witness a full withdrawal of CX from regional flying anytime soon in favor of KA. It just can't happen quickly, even if they wanted it to.

Also, let's take the worst case scenario, save a total collapse of the airline in which the lights are turned off. CX gets drastically smaller, all the 77Ws on lease go back, freighters are spun off, and most of the A330s get transferred to KA; leaving CX as a bare bones long haul carrier. The cost basis actually goes up! The cadets making the least money get made redundant and the expats are left over. How does that help?

Sorry Gnad, I just don't see your logic. Maybe you should stick to pilot math...

[Gnadenburg]

The only time I've seen the Screaming Skull affectionately quoted was here on pprune with the mood supporting his purported " It's a take-over, not a merger. KA pilots to the bottom of our seniority list ". This was a squandered opportunity for both pilot groups. I think the CX pilots are already paying for this and the KA guys are just a few years off due demographics and the dominant contract.

To make my point in previous posts clearer, 10 years after the take-over of KA is this what you expected? I don't know, as cxorcist point out, I'm not good at math, but would you have been happy with 100 commands at KA, some or many the result of expansion over your scope clause protected routes?

OK, let's move forward another 5-10 years if the Group survives ? Will CX pilots be happy with what they are seeing? As I said a year or two ago, KA's training system will change, not so creatively, but heads will roll ( as they should ) if the pass rate doesn't improve drastically. KA is now being geared up for continuous training and expansion and its potential cost base is a significant factor as is its ability to change.

I'm all right Jack, pull up the ladder, if you're a senior CX captain. But junior, mid-range CX pilots should be worried. And in the window I've asked you to consider, there are hundreds of pilots not even in the Group who will probably do their commands at KA over current CX routes - yeah right, straight to the bottom of CX seniority list!

[a370]

All this makes me laugh. The CX guys so hate their lives . Their conpany. And now KA.

But Why be bitter n twisted?

To add to their fury, all KA crew will be piling into the CX sardine briefing office come Oct 17. A cosy place , im feeling the love.

Ka recently dropped its command requirements to startat 3000 hours. It was 5000 min.

KA now upgrades junior C scalers to training ranks.

Experienced Captains over 50 becomming exhaused due to the bumbly SOs they have to work with. Good at the books and wearing Raybans.

A321 Neo can do long routes.

My guess is that the HLK , J etc decrepid airframes will be replaced by A321 Neo . Not an expansion. A 330s will be reduced.

And Why? Look out of the KaCafe guys, theres a new boy in town n he's mean lean n hungry.

Oh and 15 A350's helps ;) LOL.

[Flex88]

Finally, KA crew will get to experience a HUD in the cockpit. Will totally help in flying to all those "non-autoland" ports they operate into where "mist" is a big problem.....
;)

[swh]

What HUD ? The NEO does not have one.

There is no order either, all that has been signed is a non binding MOU.

Talk about taking the pi$$ with the DPA, hook line and sinker.

[Flex88]

What HUD ? The NEO does not have one.

There is no order either, all that has been signed is a non binding MOU.

Talk about taking the pi$$ with the DPA, hook line and sinker.

Neo order "will" have HUD's included - 100% guaranteed. It's a requirement by the masters to the North.. HK is independent yes but they pull all the strings.. period. :ooh:

[Terrain Terrain]

What HUD ? The NEO does not have one.

There is no order either, all that has been signed is a non binding MOU.

Talk about taking the pi$$ with the DPA, hook line and sinker.

http://www.hkexnews.hk/listedco/listconews/sehk/2017/0913/LTN20170913604.pdf

You were saying?

Why would a CX FO jump to KA to fly the NEO which will be some time away yet due to the backlog (Airbus has a backlog of 5545 A320 series at the moment, yes not a typo over five thousand aircraft).

By the time the NEOs arrive those CX FO who have just upgraded will be going through command courses.

The NEO will be years away. Nice wind up.

Yes, that's right. That's precisely how it works. Just like a fish and chip shop. Walk in, place an order and move to the back of the line. Eejit.

No wonder we get caned by management. So many buffoons that fail to grasp the most simple of our industry's standard practices.