CX announces HK$2.3 billion profit for 2018

[never ready]

Embattled Cathay Pacific Airways has said it expects to announce a net profit of HK$2.3 billion (US$295 million) for 2018 – a huge turnaround from its HK$1.25 billion loss the previous year.

So, this is why they wanted the vote to be passed before they announced this news.

[Apple Tree Yard]

Yes, now you know why the company was desperately trying to hurry and get the vote through. I completely expected that from the management, but I can't understand why the AOA GC wanted to play along with that (oh, wait...). We were just about sold down the river for pennies. Now, the management have to deal with not only an energized pilot group, industry leading sickness and resignation rates, but now they also have to deal with healthy profits and the obvious expectations of their pilots because of it. CC and the TB are our friend, and it will take some serious improvements to my contract to convince me to drop those actions. It's time to restore our value to what we know we are worth. POS 18....? Will soon be consigned to the dustbin of history (along with the CK video attempting to sell it :=). Every pilot in this airline will now simply tell management, "stop the crap", and give us a proper contract. The longer our management pretend to themselves that nothing has changed, the more it will change.

[plainpilot11]

Like how about EVERYTHING backdated for 4 years!

[SaulGoodman]

HKD2.3B is not exactly a lot considering most of the world is having record profits and given CX’s fleetsize... If you couldn’t make a profit last year you should just quit and do something else.

[Asturias56]

HK$ 2.3 Bn on a Market cap of HK$ 51.3 Bn = 4.48% return - not earthshaking really...... given the risks of the airline business.......

[gulliBell]

CX share price opened at $HK12.06 this morning. After lunch it went to $HK13.16.

When was the Profit Alert (https://www.cathaypacific.com/dam/cx/about-us/investor-relations/announcements/en/20190220_CX_Profit_Alert_Announcement_en.pdf) released to the market, during the lunch break, or after trading closed today?

I'm still holding mine at $21/share....a long way to go for me to break even :ugh:

[Progress Wanchai]

The group operates 200 aircraft and in a year when aviation is booming, made just enough money to buy 1 more.

The only positive outcome I see from this announcement is that the shareholders finally vote to overthrow the current management structure. Or the AOA TU’s grow the balls to hold a vote of no confidence in the leadership.
I fail to see how this anemic “profit” otherwise assists the long suffering pilot groups. If anyone here is investing into this circus please pm me. I’ve a bridge that’s for sale.

[Asturias56]

Jeez RAT - calm down man.... it's only a job

They can't pull out your fingernails or shoot your kids............................

[Tea time]

Just bear in mind that this profit was achieved despite the fuel hedging debacle . Imagine how much money would have been made without being dragged down by fuel prices

[cxorcist]

Just bear in mind that this profit was achieved despite the fuel hedging debacle . Imagine how much money would have been made without being dragged down by fuel prices

Yes, CX is well north of $3 Billion US (24 billion HKD) on fuel hedging losses. That means that if CX has just done nothing except pay spot prices for fuel, we would actually have a MUCH healthier balance sheet. No one to blame but Swire elites, and they want US to pay for THEIR mistakes??? No thanks, pass!!!

[Staggers]

Anybody remember the profit share formula?

[plainpilot11]

Anybody remember the profit share formula?

(Days worked in 2018) divided by actual scheduled work days, times a percentage of the company’s choosing.

Take that number and multiply it times 0.

That will give you your profit share.

[Freehills]

Just bear in mind that this profit was achieved despite the fuel hedging debacle . Imagine how much money would have been made without being dragged down by fuel prices

Think it is the other way round - this profit was made because the fuel hedging nightmare is finally over. All management had to do was - nothing.

[shortly2]

Actually if all those so called Managers had only ever taken long drunken lunches and never come to work at all, we would be rolling in dosh.

[controlledrest]

HK$ 2.3 Bn on a Market cap of HK$ 51.3 Bn = 4.48% return - not earthshaking really...... given the risks of the airline business.......

For an airline thats a good return on capital. Airlines aren't great investments compared other businesses.

We will never know how much profit is really there - with transfer pricing Swire move the money around to fill their pockets, avoid the taxman and screw over the little people. The biggest transfer pricing example is the so called fuel hedge.

[Farman Biplane]

I haven’t checked IntraCX but I am sure that they have conveniently forgotten to promulgate a profit share formula as they did for a profit result many years ago. Of course it is always “formulated” when they already have a good idea of what the likely results are.
Don’t want to inspire too much good faith from the workforce because that doesn’t have a $ value accountable by our accountagers.
Perhaps NumeroCrunchero can forecast some likely numbers, or has he gone to ground after Prop18?

[Cavallier]

Makes a mockery of the Jellyfish's statement " but to be honest it is all we can afford " in his pre TA vote video.

The Cav

[Frogman1484]

Let's see how they spin this profit! By the way, the profit is the same amount that Qantas has reported. Joyce says he is happy with the way the company adapted to the challenging times. I bet we will be told times are tough...competition, we poor, bleak future etc etc

[unitedabx]

Let's remember this is a NET profit, so all the fines and penalties have already been deducted. It is a trunround from last year which the markets will like. The management can say what they like, the figures tell a different story to the one they were pushing 3 weeks ago. Of course their response will be "thanks to the efforts of all staff EXCLUDING pilots, a profit was made". Dream on 9th floor, your bluff has been called and you lost.

[Freehills]

Uhm, no, QF reported 523m USD profit in 6 months - so about 4 times as much for the whole year

[Asturias56]

For an airline thats a good return on capital. Airlines aren't great investments compared other businesses.

We will never know how much profit is really there - with transfer pricing Swire move the money around to fill their pockets, avoid the taxman and screw over the little people. The biggest transfer pricing example is the so called fuel hedge.
that applies to all airlines

to my mind the important thing is , as you say, AIRLINES AREN'T GREAT INVESTMENTS - so expecting them to be open handed and generous to their staff is a fantasy - it is a business that requires an unremitting focus on cost control and cost reduction if they want to survive - see Ryanair........

[Frogman1484]

https://www.abc.net.au/news/2019-02-21/qantas-wesfarmers-nine-results-wrap/10832110

you right...$498 million AUD for 6 months. So double.

[unitedabx]

My ISM neighbour has told me HKD10,000 per employee profit share EXCLUDING CX pilots due labour unrest issues.

[Kitsune]

ISM living in Moscow Comrade? Don’t think so...��

[cxorcist]

Considering that the Swires have robbed many billions of USD from CX in the last several years via fuel hedges, making any profit at all is pretty good. Make no mistake, this theft has been from shareholders and employees. It has been a huge fraud, and the Hong Kong Stock Exchange ought to be investigating.

[controlledrest]

that applies to all airlines

to my mind the important thing is , as you say, AIRLINES AREN'T GREAT INVESTMENTS - so expecting them to be open handed and generous to their staff is a fantasy - it is a business that requires an unremitting focus on cost control and cost reduction if they want to survive - see Ryanair........


Costs need to be controlled and any moron with a spreadsheet can cut each line item, which is what CX do, generations of mis-manager after mis-manager. More importantly than cost cutting is yield management. It doesn't matter what your costs are provided you can charge enough to provide a desirable yield. The CX product has been cut and cut and cut, so it is no longer any better than HKA, so the customer isn't prepared to pay a premium to travel with CX. Our product is worse than other premium carriers, so again customers choose not to fly CX. With our leave and staff travel 'privileges' being so poor over the last four years I have travelled with 5 other carriers (from the budget to premium). It is shocking how far behind CX is in ticketing, seats, food, IFE and service. Have you looked at our loads around the network? Pax are ditching CX in droves. If we are to survive we need to focus on yield and manage costs, not just cost cutting.

[Asturias56]

I'd be interested to know which airlines can charge a premium for service these days?

Sure BA etc get away with murder on trans-Atlantic but that's because they have Heathrow sewn up

I honestly am struggling to think of any that fit the bill..... the rest of the world proves that passengers overwhelmingly choose by price and price alone

[mngmt mole]

......not my problem. I know what my services are worth. Its up to management to fit that into the budget. Many other airlines seem to manage that. The ones that dont will slowly strangle due lack of pilots. Or alternatively, you can go the Lion Air route where your inexperienced and incompetent aircrew write off an airplane every 6 months....

[Asturias56]

Oh dear... you are in for a shock - haven't heard that sort of attitude in 30 years.... I think maybe you don't realize what is happening everywhere else

It's not up to management - its the consumers who will stiff you my friend. They go to the lowest cost airline every time and if that's Lion Air so be it

How many airlines go bust every year? Lots - and a lot of them are the "fuller service "ones

Your services are worth exactly what someone is willing to pay for them - and if that's less than you think you should be paid either quit or retrain...... fast..........

[cxorcist]

Oh dear... you are in for a shock - haven't heard that sort of attitude in 30 years.... I think maybe you don't realize what is happening everywhere else

It's not up to management - its the consumers who will stiff you my friend. They go to the lowest cost airline every time and if that's Lion Air so be it

How many airlines go bust every year? Lots - and a lot of them are the "fuller service "ones

Your services are worth exactly what someone is willing to pay for them - and if that's less than you think you should be paid either quit or retrain...... fast..........

Yeah MM, the third world is taking over. People are willing to sacrifice safety for a cheap, dodgy ride atop the shanty town bus. Maybe they can put their chickens and pigs in the aisles too, for a small charge of course. Yours and my professional pilot services are no long needed because these cheap pilot ticket purchasers say so. Their lives aren’t worth very much anyways, right? Everybody should be a regional pilot on food stamps and government housing assistance, because the third world says so. Dark days ahead. China is the world’s moral compass, and Indonesians determine the value of a pilot. F me!!!

[FUANNA]

Yeah MM, the third world is taking over. People are willing to sacrifice safety for a cheap, dodgy ride atop the shanty town bus. Maybe they can put their chickens and pigs in the aisles too, for a small charge of course. Yours and my professional pilot services are no long needed because these cheap pilot ticket purchasers say so. Their lives aren’t worth very much anyways, right? Everybody should be a regional pilot on food stamps and government housing assistance, because the third world says so. Dark days ahead. China is the world’s moral compass, and Indonesians determine the value of a pilot. F me!!!


Welcome to ' Globalisation ' , a world where someone will always do it for less, and a tiny group of ' elite ' is having a blast.

Time to stop this nonsense, right here, at your very own employer. CX.

[Asturias56]

regretfully you are correct in almost every detail....................

When 50 million Indonesians or 200 million Chinese join the middle-class they all want to fly places - they don't give a stuff about "image" or history or your pay packet and historical benifit packages

Same in Europe when a bunch of 20 year olds go out they used to go to maybe London - now they want to fly to Riga. All they care about is PRICE

Reading this forum a lot of people at CX seem to stuck in a time warp - the management are no doubt a bunch of chiseling b****** but that's about par for the course these days everywhere in every industry. One thing I am sure of this that they understand the customers a lot better than the posters above do. They are (probably desperately) trying to avoid becoming an Alitalia, Gulf Air, Monarch or a TWA .

I'm sorry but that's the real world and that is what you are up against - you don't like it (and I don't like it for the record) but there is absolutely nothing you can do - the economic and social forces are far far bigger than a few Directors at CX :(

[cxorcist]

“They are (probably desperately) trying to avoid becoming an Alitalia, Gulf Air, Monarch or a TWA .”

So those airlines’ struggles were due to excessive pilot packages? This notion that all airlines are created equal and success is derived only from cranking down on staff is so farcical that it’s hardly worth mentioning.

[mngmt mole]

It's the attitudes displayed above that results in certain airlines becoming career ghettos. You only have to look at the very profitable US airlines for the example we should all be insisting on. Southwest Airlines seems to have no problem catering to the "cost conscious" traveler, and at the same time paying first world pay and associated benefits, a proper rostering system, health care and most important of all, positive management/employee relations (oh, and massive profits....). The difference is a management that values its employees, treats them properly and respects their contribution to the overall growth and prosperity of the airline. If you want to compare yourself to the bottom feeders...have at it. You'll undoubtedly succeed in reaching those lofty heights.

[mr did]

I'm sorry but that's the real world and that is what you are up against - you don't like it (and I don't like it for the record) but there is absolutely nothing you can do - the economic and social forces are far far bigger than a few Directors at CX

Pilots quoting economic theory.... priceless

Perhaps you could give us one that explains shortages of highly skilled labour caused by high attrition, being fixed by offering considerably worse employment conditions? "Idiotic Airline Executive short term bonus theory!?

[mngmt mole]

...well, some pilots actually possess degrees in economics. Why don't you try addressing the facts I raised pertaining to SW airlines? (oh, I get it...that example doesn't fit your narrow-minded prejudice against pilots. got it).

[CX ex]

It's the attitudes displayed above that results in certain airlines becoming career ghettos. You only have to look at the very profitable US airlines for the example we should all be insisting on. Southwest Airlines seems to have no problem catering to the "cost conscious" traveler, and at the same time paying first world pay and associated benefits, a proper rostering system, health care and most important of all, positive management/employee relations (oh, and massive profits....). The difference is a management that values its employees, treats them properly and respects their contribution to the overall growth and prosperity of the airline. If you want to compare yourself to the bottom feeders...have at it. You'll undoubtedly succeed in reaching those lofty heights.

While you're certainly correct that airlines can indeed thrive while paying livable wages, it needs to be said why. Delta, United, American, Southwest etc.. do not pay what they pay because they WANT to, they pay that because they HAVE to.

Why do they HAVE to? Because the pilots (and other employee groups) are extremely organized and maintain their leverage. Something that has taken many years and in some cases some hard lessons. They have hard fought contracts that protect agains management threats and strategies as well as potential management threats.

Never forget why management and "leadership" is there. To make money. Only two ways to do it. Make more, or spend less. Strong labor unions ensure one of those options is more or less off the table.

[mr did]

Mole: the facetious comment is directed at Asturias56. It's why I quoted his post and not yours..

[mngmt mole]

....ah, noted. Apologies, would help if I read the comment more carefully... :rolleyes:

[lucille]

Sad truth is Asturias is not far off the mark. I’m pretty sure that were your positions to be advertised next week, there would be a very long queue of crew lining up to fill them and each would be happy to accept half your present T’s&C’s. By way of example, just look to HKE and it’s ilk and tell me I’m wrong.

Is it right? No. Is it ethical? Of course Not. No one of my era recommends this as a career choice for the young. This is a big change from say 20 years ago.

Here is the harsh reality of the dumbing down of a profession by technology. Modern aircraft and ATC systems go a long way to making them shall we say... “crash resistant”. It is this metric which emboldens your freshly minted MBA wielding Managers.

[Oasis]

Sad truth is Asturias is not far off the mark. I’m pretty sure that were your positions to be advertised next week, there would be a very long queue of crew lining up to fill them and each would be happy to accept half your present T’s&C’s. By way of example, just look to HKE and it’s ilk and tell me I’m wrong.

Is it right? No. Is it ethical? Of course Not. No one of my era recommends this as a career choice for the young. This is a big change from say 20 years ago.

Here is the harsh reality of the dumbing down of a profession by technology. Modern aircraft and ATC systems go a long way to making them shall we say... “crash resistant”. It is this metric which emboldens your freshly minted MBA wielding Managers.

The harsh reality is, as cx is finding out now, that you get what you pay for.
They may come for the shiny jets and endorsements, and they will leave just as quickly for proper remuneration and/or a western standard lifestyle.
They pay enough for the single guy with nothing to lose, but it will not be enough long-term for a young family.
Is that right? Is that ethical? I don't know, but it is what the market will bear..

[Babbalito]

While you're certainly correct that airlines can indeed thrive while paying livable wages, it needs to be said why. Delta, United, American, Southwest etc.. do not pay what they pay because they WANT to, they pay that because they HAVE to.

Why do they HAVE to? Because the pilots (and other employee groups) are extremely organized and maintain their leverage. Something that has taken many years and in some cases some hard lessons. They have hard fought contracts that protect agains management threats and strategies as well as potential management threats.

Never forget why management and "leadership" is there. To make money. Only two ways to do it. Make more, or spend less. Strong labor unions ensure one of those options is more or less off the table.

:ok:
Wot he said.

Add in the fact that the company does not care about you while money is being made from your efforts and you will have the starting point for any negotiations.

[MainDude]

... and most important of all, positive management/employee relations (oh, and massive profits....). The difference is a management that values its employees, treats them properly and respects their contribution to the overall growth and prosperity of the airline...

Well said. That's the bottom line if the "numbers" won't budge.

[Asturias56]

You can make witty remarks about pilots pronouncing on economics but it doesn't change the facts that it's happening -in fact HAS happened to all too many people elswhere.Mole is correct - it IS possible to run an airline which is both succesful and looks after its people - but the number can be counted on maybe 2 fingers

It's not just airlines- most western industries and busineses have the same problem - wages go down in real terms, conditions are worse and the top 0.5% have 50 to 100 times more money

You can rail against it all you like but there is no way you'll change anything I'm afraid

[Flex88]

It's not just airlines- most western industries and busineses have the same problem - wages go down in real terms, conditions are worse and the top 0.5% have 50 to 100 times more money
You can rail against it all you like but there is no way you'll change anything I'm afraid

Asturias, it's exactly your particular style of "apathy" that has led to "western industries and airlines" and their conditions going down in real terms..
Are you on the GC? Just wondering because you sound similarly as apathetic as the AOA "leaders" who recommended POS18 and equally so all the AOA members who voted to accept that garbage.
"Apathy" is the Cancer that's been rotting the HKAOA membership for some 25 years now and I'm afraid it's now at Stage 4..

[MACH.88]

What are the chances CX would ever do something like this...?

Delta to Pay Over $1 Billion in Profit Sharing to Its Employees (http://aviationtribune.com/airlines/north-america/delta-to-pay-over-1-billion-in-profit-sharing-to-its-employees/)

MACH.88
😎

[cannot]

Well let’s look at the 2 different options
1 ) I work for delta I get about 5.5 weeks of profit share , I’m on a G day, Delta Crewing phone . I would only have 2 questions where and when do you want me .

2) I work for Cathay they shafted me out of 13th cheque . I’m on a G day , crew control phone ,answer machine picks up because I’m not stupid enough to answer the phone in the first place . usual story if you don’t do it the flight will be cancelled I only have 1 question why haven’t you cancelled it already because I ain’t doing it

Treat your staff well they will do everything they can to reciprocate . Treat them like sh-t and they will do everything to get even . Very short sighted policy , but no one at Cathay cares any more

[mrdeux]

Well, QF announced a $A67 million bonus to staff, but then placed conditions upon it which means it's unlikely to ever be paid to anyone.....except management.

[dragon man]

Well, QF announced a $A67 million bonus to staff, but then placed conditions upon it which means it's unlikely to ever be paid to anyone.....except management.

In Qantas it’s easy, do you want to assign it? That’s means double dollars, so yes I’ll do it, otherwise cancel it and don’t worry about the $948 net bonus.

[Freehills]

Well let’s look at the 2 different options
1 ) I work for delta I get about 5.5 weeks of profit share , I’m on a G day, Delta Crewing phone . I would only have 2 questions where and when do you want me .

2) I work for Cathay they shafted me out of 13th cheque . I’m on a G day , crew control phone ,answer machine picks up because I’m not stupid enough to answer the phone in the first place . usual story if you don’t do it the flight will be cancelled I only have 1 question why haven’t you cancelled it already because I ain’t doing it

Treat your staff well they will do everything they can to reciprocate . Treat them like sh-t and they will do everything to get even . Very short sighted policy , but no one at Cathay cares any more

i think in delta you will find the work rules/ reserve coverage is such that a call out on a G day would either never happen, or be a sign that the rapture has just happened...

[cxorcist]

i think in delta you will find the work rules/ reserve coverage is such that a call out on a G day would either never happen, or be a sign that the rapture has just happened...

Delta doesn’t have G days or, therefore, G day callouts. What they do have is a robust and user friendly trip trade and open time system. When crews get short, they incentivize pilots to pick up open time by offering time and a half. Simple and logical, unlike the broken musical chairs that CX plays where everybody affected by disruption gets screwed.

[unitedabx]

Delta doesn’t have G days or, therefore, G day callouts. What they do have is a robust and user friendly trip trade and open time system. When crews get short, they incentivize pilots to pick up open time by offering time and a half. Simple and logical, unlike the broken musical chairs that CX plays where everybody affected by disruption gets screwed.

The difference you are describing is where one airline is looking to the future, expansion and a sound working relationship with it's employees and customers and one which which couldn't give a sh*t.

[mngmt mole]

The difference you are describing is where one airline is looking to the future, expansion and a sound working relationship with it's employees and customers and one which which couldn't give a sh*t.

Could not have defined the situation at CX better. Nearly all aspects of our managements behaviour over the past 20+ years is indicative of an employer who truly doesn't care for the well being of its staff. Due a singular focus on profit at the expense of everything else, they have now created a miserable, dysfunctional and self-destructive business environment where most of their front-line staff actively despise the company they work for. When you have probably 2000 of your 3500 pilots actively looking for new jobs (and the market providing those jobs), you can be certain that CX is going to experience a maelstrom of misery in the next couple of years. It's all on the heads of the Swire managers, who's own blind greed towards their own bonuses has created a toxic work place. Almost beyond fixing now.

[anxiao]

I agree with the above. Let us not forget, although this is predominately a pilot's forum, that many other sectors and departments of the company feel the same way about the managerial style. The rot is not one worm on our side of the apple.

As you ask around the other departments it is appalling that a publicly quoted company can be reduced to having such a dis-functional workforce. Recruiting top management from such a small educational sector as Swire has done for many years has missed out on the diversity that an international company requires. The corporate culture has become toxic and abusive in around the last twenty years.

M mole you are probably right. It is almost beyond fixing. The Gordon Bethunes of the world are almost extinct, and that is the management style that would be required to recover CX to its former glory of a workforce that would walk over broken glass to get an excellent job done.

In the last couple of days I have been reading the wannabees forums destined for CX. It is woeful.