Cathay Financial State?
Thread Starter
Joined: Jul 2001
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From: Down South
Cathay Financial State?
There's been alot in the news lately about the airline industry in the world. A few airlines closing down, many laying of employees and cutting capacity. Anyone know how Cathay is weathering the current storm? Any idea if Cathay is going to scale back?
Joined: Jun 2001
Posts: 88
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From: Hong Kong
Unlike many of the US and European majors Cathay has an enviable debt to equity ratio. A record year (last year), a strong balance sheet and large cash reserves mean no immediate danger. However, business is very difficult with a lot of trading down by business travellers and an awful cargo market. Some routes decidedly marginal and
I suspect one or two may be canned.
Fortunately a pretty young and efficient fleet so probably Cathay is in a better position than most. Of course, a major conflict in the Gulf or elsewhere will impact
everyone.
Regards
SH
I suspect one or two may be canned.
Fortunately a pretty young and efficient fleet so probably Cathay is in a better position than most. Of course, a major conflict in the Gulf or elsewhere will impact
everyone.
Regards
SH
Joined: Aug 2001
Posts: 19
Likes: 0
From: Hong Kong
It is highly unlikely that CX can avoid cuts in routes and staff even if the US traffic is not the best yield. If the US go into the Middle East this could inflame Muslim nations and could drive traffic down yet more to bread winners like Bali & Dubai. Plus it may make Europeans reluctant to traverse the Middle East even at FL038.
CX would have been slightly better placed if the 'yellow ribbon bearing flight deck' had not been carrying out their own form of economic terrorism over the last few months. The action of the pilots was dead at birth but they did not read the writing on the wall. Cuts/route closures/Losses were coming but even quicker/sooner/bigger now.
To all those wearing the 'colour of cowards' who said they 'dont care about CX any more' claiming they would jump into another job with no trouble..... tell that to the boys at AN, BA, UA, CO, SQ(as of today) and many others. I notice talk 'up front' of walking off to fly for others has all but stopped. Glad we've got a job now are you...
CX is in better but battered shape. Some is self inflicted ... by the 'Boys in yellow'.
CX would have been slightly better placed if the 'yellow ribbon bearing flight deck' had not been carrying out their own form of economic terrorism over the last few months. The action of the pilots was dead at birth but they did not read the writing on the wall. Cuts/route closures/Losses were coming but even quicker/sooner/bigger now.
To all those wearing the 'colour of cowards' who said they 'dont care about CX any more' claiming they would jump into another job with no trouble..... tell that to the boys at AN, BA, UA, CO, SQ(as of today) and many others. I notice talk 'up front' of walking off to fly for others has all but stopped. Glad we've got a job now are you...
CX is in better but battered shape. Some is self inflicted ... by the 'Boys in yellow'.
Joined: Jun 2001
Posts: 88
Likes: 0
From: Hong Kong
Unless the insurance issues mentioned elsewhere are sorted out, none of us, including the yellow ribbon brigade will have any work to do anyway from Monday onwards. What awful times. Let's hope we
are all in employment this time next month.
SH
are all in employment this time next month.
SH
Joined: Jun 2001
Posts: 88
Likes: 0
From: Hong Kong
Letter to all CX staff from David Turnbull.
Letter to staff from the Chief Executive
We are all still coming to terms with the devastating human impact of last week's tragic events in the US. Their long-term economic effects are not yet fully understood, but it is already clear that the global airline industry is taking the brunt of the initial impact.
Following the events of 11 September, the traffic of US and European carriers has already suffered such declines that most have found it necessary to announce major reductions in staff numbers and huge cutbacks in operations. The American carriers have even been granted government assistance and subsidies to keep them in business. Even before last week's terrorist attacks, traffic on Cathay Pacific routes had declined as a result of the on-going economic downturn and the impact of the AOA's industrial action. Since 11 September, our loads are down and forward bookings have fallen yet further, though the direct effect has not yet been as severe as it has for US and European airlines. While we cannot predict with certainty how our business will fare over the coming weeks and months, we do know that the future is going to be tough.
As a result we are conducting a top to bottom review of our operations. However, we will not be making any hasty decisions. In due course we will need to respond to reductions in traffic levels, and match our capacity to the level of demand. We will also look at what measures we can take to reduce expenditure, which will include the deferral or cancellation of capital projects and purchases. We implemented a hiring freeze for all ground staff and cabin crew in August, which remains in place. We will now also phase out all pilot recruitment.
Our strategy is to preserve the network, and to preserve the employment of our staff. We do not have any current plans to reduce our workforce, but this cannot be ruled out completely as the longer-term impact of last week's events makes itself felt. In the current situation what matters is not making a profit but having enough cash to pay the bills. After years of careful management Cathay Pacific is certainly in a stronger position than many of our competitors, but we will have to continue to manage the Company to keep our cash flows positive. Only if we are successful in this can we meet our objective of preserving jobs and salaries. If despite our best efforts we cannot do this, and sacrifices have to be made, we will share them together.
We all need to pull in the same direction if we are to bring our great Company through this crisis. Many thousands of Cathay Pacific staff have given strong support through recent difficult times, and I promise you that the management team will do everything we can to repay that support as we move forward together. It is most unfortunate that at this critical time the leaders of the pilots' union are still trying to fight for more money and "improved lifestyles" for their members by pursuing industrial action against our Company. This action is specifically designed to damage the Company financially. Despite all that is going on, the AOA seems blind to the fact that what their members need most is to secure the future of the airline that pays their salaries and provides them with the lifestyle they now have.
I want to assure you that our primary focus is on maintaining the operation and doing our utmost to ensure a strong future for Cathay Pacific - for your sake, for our passengers' sake and, indeed, for the benefit of the whole of Hong Kong. Thank you in advance for your understanding and hard work in the difficult times ahead.
David Turnbull, Deputy Chairman and Chief Executive
Letter to staff from the Chief Executive
We are all still coming to terms with the devastating human impact of last week's tragic events in the US. Their long-term economic effects are not yet fully understood, but it is already clear that the global airline industry is taking the brunt of the initial impact.
Following the events of 11 September, the traffic of US and European carriers has already suffered such declines that most have found it necessary to announce major reductions in staff numbers and huge cutbacks in operations. The American carriers have even been granted government assistance and subsidies to keep them in business. Even before last week's terrorist attacks, traffic on Cathay Pacific routes had declined as a result of the on-going economic downturn and the impact of the AOA's industrial action. Since 11 September, our loads are down and forward bookings have fallen yet further, though the direct effect has not yet been as severe as it has for US and European airlines. While we cannot predict with certainty how our business will fare over the coming weeks and months, we do know that the future is going to be tough.
As a result we are conducting a top to bottom review of our operations. However, we will not be making any hasty decisions. In due course we will need to respond to reductions in traffic levels, and match our capacity to the level of demand. We will also look at what measures we can take to reduce expenditure, which will include the deferral or cancellation of capital projects and purchases. We implemented a hiring freeze for all ground staff and cabin crew in August, which remains in place. We will now also phase out all pilot recruitment.
Our strategy is to preserve the network, and to preserve the employment of our staff. We do not have any current plans to reduce our workforce, but this cannot be ruled out completely as the longer-term impact of last week's events makes itself felt. In the current situation what matters is not making a profit but having enough cash to pay the bills. After years of careful management Cathay Pacific is certainly in a stronger position than many of our competitors, but we will have to continue to manage the Company to keep our cash flows positive. Only if we are successful in this can we meet our objective of preserving jobs and salaries. If despite our best efforts we cannot do this, and sacrifices have to be made, we will share them together.
We all need to pull in the same direction if we are to bring our great Company through this crisis. Many thousands of Cathay Pacific staff have given strong support through recent difficult times, and I promise you that the management team will do everything we can to repay that support as we move forward together. It is most unfortunate that at this critical time the leaders of the pilots' union are still trying to fight for more money and "improved lifestyles" for their members by pursuing industrial action against our Company. This action is specifically designed to damage the Company financially. Despite all that is going on, the AOA seems blind to the fact that what their members need most is to secure the future of the airline that pays their salaries and provides them with the lifestyle they now have.
I want to assure you that our primary focus is on maintaining the operation and doing our utmost to ensure a strong future for Cathay Pacific - for your sake, for our passengers' sake and, indeed, for the benefit of the whole of Hong Kong. Thank you in advance for your understanding and hard work in the difficult times ahead.
David Turnbull, Deputy Chairman and Chief Executive
Joined: Mar 2000
Posts: 7
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From: United Kingdom
As one who has just been put out of a job by my company's response to Sept 11th, it does not detract from the initial proble that exists at CX. Namely the overbearing, colonial intransigent and arrogant management, screwing up the lives of those people dismissed for no no good reason but purely on the whim of Mr Turnball to try and break the AOA. This problem goes back to 1990s when Mr Eddington started the ball rolling. Alas his track record subsequently with Ansett and BA havent been to clever either.
Joined: Aug 2001
Posts: 381
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From: Asia
Cathay Pacific supports 26,000 families. The committment of its major shareholders is 110 percent.They will put their money where their heart is.
The last six sectors I have done had lots of bums in seats so the support is still there.
The product is without peer and CLK is the most efficient airport in the world.
Cathay will survive and flourish as the competition drops away. It will continue to be the best airline in the world to work for.
Many would argue that HK has no soul and that the mighty buck rules. The same argument fails the test when applied to CX.
The primary role of the management at this point in time is to protect all those 26,000 families and to offer favour to no particular sibling. This policy begs understanding from all on the payroll.
There is little to negotiate while much to discuss..and those discussions can achieve most when the PR companies talked of are not involved.
The last six sectors I have done had lots of bums in seats so the support is still there.
The product is without peer and CLK is the most efficient airport in the world.
Cathay will survive and flourish as the competition drops away. It will continue to be the best airline in the world to work for.
Many would argue that HK has no soul and that the mighty buck rules. The same argument fails the test when applied to CX.
The primary role of the management at this point in time is to protect all those 26,000 families and to offer favour to no particular sibling. This policy begs understanding from all on the payroll.
There is little to negotiate while much to discuss..and those discussions can achieve most when the PR companies talked of are not involved.
Joined: Jun 2001
Posts: 88
Likes: 0
From: Hong Kong
Traffic
What a refreshing change to read such a positive posting. You will have to gird your loins for the vitriol which will follow!Whilst there are undoubtedly issues about rostering (acknowledged by even the most despised CX manager) fundamentally you are spot on. Terrific airline and in better shape than 99% of the rest to weather the storm (years of incompetent management?). I was still horrified to see that the AOA voted to continue to harm the airline at a time of declining loads and revenue and looming retrenchment. Extraordinary behaviour even from looney tunes that run the AOA. They won't drag the airline into the mire but they WILL now ensure further
sackings... My guess would be end next week.
I hear there was (note WAS) an offer from the company but looney tunes (apparently) didn't present it to the membership. Why would this be?
SH
What a refreshing change to read such a positive posting. You will have to gird your loins for the vitriol which will follow!Whilst there are undoubtedly issues about rostering (acknowledged by even the most despised CX manager) fundamentally you are spot on. Terrific airline and in better shape than 99% of the rest to weather the storm (years of incompetent management?). I was still horrified to see that the AOA voted to continue to harm the airline at a time of declining loads and revenue and looming retrenchment. Extraordinary behaviour even from looney tunes that run the AOA. They won't drag the airline into the mire but they WILL now ensure further
sackings... My guess would be end next week.
I hear there was (note WAS) an offer from the company but looney tunes (apparently) didn't present it to the membership. Why would this be?
SH
Joined: Aug 2001
Posts: 381
Likes: 0
From: Asia
SH
If it elicits vitriol, so be it. I was always taught that a relationship is dead once the communication stops. Vitriol is still better than no discussion.
I will maintain to the grave that there is heaps of goodwill on both sides of the dispute.
FWIW my definition of vitriol is that it is simply the smell of wet paint waiting to dry...so everyone can escape from the corner they have painted themselves into.
If it elicits vitriol, so be it. I was always taught that a relationship is dead once the communication stops. Vitriol is still better than no discussion.
I will maintain to the grave that there is heaps of goodwill on both sides of the dispute.
FWIW my definition of vitriol is that it is simply the smell of wet paint waiting to dry...so everyone can escape from the corner they have painted themselves into.
Thread Starter
Joined: Jul 2001
Posts: 308
Likes: 0
From: Down South
What's the latest at Cathay now.Everything seems to be very quiet. Have'nt heard anything about CX cutting back on pilots and a friend of mine left for his second interview today. Any chance of cut backs in the near future? What has become of the industrial action? Also seems to be very quiet. Anyone have any idea how long the ban might still be in place for? Any news greatly appreciated.
