Allocated leave in 2009.
Thread Starter
Allocated leave in 2009.
Just noticed via gwise that my requested leave for late May early June is only provisionally awarded but I have had a week allocated to me in mid March (which I can’t through back into the pool) and mid April. Considering that I have over 165 points and I put in a request that if they were to allocate any leave to me it would be in reverse order, I am far from happy. 
If they think I am going to request unpaid leave later in the year where I originally requested paid leave and had plans, think again.
Anyone else in the same boat?
If they think I am going to request unpaid leave later in the year where I originally requested paid leave and had plans, think again.Anyone else in the same boat?
Thread Starter
prairiedriver
While I see where you are coming from, that makes no financial sense. Paid leave is a liability on the company’s balance sheet. It makes more sense for the company to allocate paid leave first preferably for them in the first half of next year to clear the books than to allocate unpaid leave. Also unless one volunteers for unpaid leave it’s a bit hard to allocate it to everyone.
If what’s happened to me is any indication, considering that I have +165 leave points and I had all my leave requests in both for requested and allocated for 2009, this is exactly what is happening.
While I see where you are coming from, that makes no financial sense. Paid leave is a liability on the company’s balance sheet. It makes more sense for the company to allocate paid leave first preferably for them in the first half of next year to clear the books than to allocate unpaid leave. Also unless one volunteers for unpaid leave it’s a bit hard to allocate it to everyone.
If what’s happened to me is any indication, considering that I have +165 leave points and I had all my leave requests in both for requested and allocated for 2009, this is exactly what is happening.
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Liability on the books
Isn't a liability on the books exactly what the company needs to ensure they make a book loss.
ie isn't this the same scenario as the fuel hedging it's all a paper loss not a real cashflow loss?
ie isn't this the same scenario as the fuel hedging it's all a paper loss not a real cashflow loss?
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I'm a bit rusty, but here is my thought process.
I'm not suggesting that the world of finance and airlines is great at the moment. But then I'm not convinced that we are getting the complete story either (from CX or the finance firms)
If profit was marginal, sometimes the accounting side of a business will prefer to claim a loss. Not 100% on HKG tax issues for a business. There could be many scenarios to justify this. Some have suggested that if the business has to answer a court case (maybe for cartel activity) then it can lead to smaller fine as a larger one would be perceived to be unnecessarily punitive.
Tax example, in the last released financial report, CX showed an expected Refund of tax that was already provisionally paid. This was due to the half year loss.
However a liability on the books to my understanding is exactly the same game as the fuel hedge. It is documented as a loss, but the actual cash didn't go out the door. If you prefer it's the same game that is happening with property trusts around the world. Their assets are being revalued in the downwards direction. This leads to a reduction in asset value and therefore the equity/ debt ratio will change.
It often happens in other countries financial systems. A company will accelerate its depreciation or writedown of assets in a year that suits them for the tax purposes of the country of operation. Other examples include taking a charge on the books for an expected decision on a fine. The 468? Million that was charged to the books for the US fine is exactly that. The company hasn't (as far as I'm aware) actually paid the money. They have merely set aside (provisioned) the money on the books to cover the expected outcome.
That's just my understanding. More than happy for the full time professional/ current accountants to prove me wrong.
I'm not suggesting that the world of finance and airlines is great at the moment. But then I'm not convinced that we are getting the complete story either (from CX or the finance firms)
If profit was marginal, sometimes the accounting side of a business will prefer to claim a loss. Not 100% on HKG tax issues for a business. There could be many scenarios to justify this. Some have suggested that if the business has to answer a court case (maybe for cartel activity) then it can lead to smaller fine as a larger one would be perceived to be unnecessarily punitive.
Tax example, in the last released financial report, CX showed an expected Refund of tax that was already provisionally paid. This was due to the half year loss.
However a liability on the books to my understanding is exactly the same game as the fuel hedge. It is documented as a loss, but the actual cash didn't go out the door. If you prefer it's the same game that is happening with property trusts around the world. Their assets are being revalued in the downwards direction. This leads to a reduction in asset value and therefore the equity/ debt ratio will change.
It often happens in other countries financial systems. A company will accelerate its depreciation or writedown of assets in a year that suits them for the tax purposes of the country of operation. Other examples include taking a charge on the books for an expected decision on a fine. The 468? Million that was charged to the books for the US fine is exactly that. The company hasn't (as far as I'm aware) actually paid the money. They have merely set aside (provisioned) the money on the books to cover the expected outcome.
That's just my understanding. More than happy for the full time professional/ current accountants to prove me wrong.
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They can't give you unpaid leave when you don't want it, (at least, we haven't gotten to that point yet) so they are waiting to get all the requests, allocate them, then they will fill in the holes with the paid leave. As we can't see what happens with requests in the leave system, they are free to allocate it at their pleasure. Certainly not how I understood the system was to work, but then again, the cockpit crew response to the UPL has been less than hoped for, so it probably will not have much of an effect anyway. Happy Holidays.
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404,
I am sure I am telling you to suck eggs but in allocation it would go to the person with the highest points if 2 or more were being 'allocated' leave. Someone bidding for a week, lets say he/she has -64points, will still get it ahead of you being 'allocated' it.
Guys/gals
I know a lot of guys waste their first bids...if there are no slots or it is obvious you don't have the points to get the slots available, don't bother bidding it. All it does is waste your first bid. Every other person has their first bid looked at, regardless of points, and many people with lower points will get their first bid ahead of your second bid. PM if you want me to explain further!
Hard rock, I agree with you. They want to maximise UPL so no point letting full paid leave stop someone from taking UPL, from a company point of view! Our leave is given in advance, not arrears, so as long as it is all used up by end of 2009 there is no 'loss' or liability due to leave. From a cashflow point of view, it is better to have unpaid leave next year and carry over leave to the following year, assuming we all worked full hours. If we are undermanned next year, after UPL, then obviously the smart thing to do is exhaust all leave.
Expectation management
We are heading for a record loss, IMO. The fuel hedge loss is probably around $4billion at todays fuel prices - ultimately it depends on what the fuel prices are on 31/12/08 for the definitive fuel hedge loss. As a going concern we are probably profitable right now - for Oct-Dec anyway, but the losses from Jul-Sep, due fuel prices, will probably mean we will end up at break even for the year, at operating level.
Now as to why companies like to make big write offs? Well, CX is very PR driven. It is really almost a private company when you consider that Swire/mainland china owns about 75%(i think) so why would they care what the 'headline' figures are. But when you are arguing with CAD about fuel surcharges, relaxing constrictive AFTLS, arguing with suppliers and customers about prices, it helps if it looks like you are really hurting. Yes we are hurting now, but not as badly as it will be made out. There is also an element of 'clearing the decks' - if there is anything dodgy or doubtful then write it off all in one go so that moving forward you will look more profitable.
We 'needed' to make a loss in 97 - we actually made an operating profit that year but for the concessions needed off staff etc we needed to make a loss. So management wrote down the value of the 747classics. Now you might think that is fair enough - and if the written down value is accurate then you could probably expect to lease them(747classics) out for a 10% return. We were actually getting around 25% return - that means the value was too low or the rent was too high...you decide which it was, I have my opinion!
Right now there is much focus on forward bookings falling off. Well think about it - if you were planning to fly J class in 6 months would you book now? No, but six months ago, when things were booming, you would book way ahead just to make sure you got a seat. Now you can sit back as you know there will be seats and you might even get it cheaper by waiting.
Its all about expectation management - if you 'fear' for you job you won't argue about payrises, 13th month, leave etc etc. Additionally, making a huge headline loss will give CX credibility when it argues with customers and suppliers over pricing.
The irony over our impending loss....the $4billion or so we lose on fuel hedge book means we will save $40-50Billion in fuel costs over the next two years - but don't expect to see that in a Friday telex;-)
I am sure I am telling you to suck eggs but in allocation it would go to the person with the highest points if 2 or more were being 'allocated' leave. Someone bidding for a week, lets say he/she has -64points, will still get it ahead of you being 'allocated' it.
Guys/gals
I know a lot of guys waste their first bids...if there are no slots or it is obvious you don't have the points to get the slots available, don't bother bidding it. All it does is waste your first bid. Every other person has their first bid looked at, regardless of points, and many people with lower points will get their first bid ahead of your second bid. PM if you want me to explain further!
Hard rock, I agree with you. They want to maximise UPL so no point letting full paid leave stop someone from taking UPL, from a company point of view! Our leave is given in advance, not arrears, so as long as it is all used up by end of 2009 there is no 'loss' or liability due to leave. From a cashflow point of view, it is better to have unpaid leave next year and carry over leave to the following year, assuming we all worked full hours. If we are undermanned next year, after UPL, then obviously the smart thing to do is exhaust all leave.
Expectation management
We are heading for a record loss, IMO. The fuel hedge loss is probably around $4billion at todays fuel prices - ultimately it depends on what the fuel prices are on 31/12/08 for the definitive fuel hedge loss. As a going concern we are probably profitable right now - for Oct-Dec anyway, but the losses from Jul-Sep, due fuel prices, will probably mean we will end up at break even for the year, at operating level.
Now as to why companies like to make big write offs? Well, CX is very PR driven. It is really almost a private company when you consider that Swire/mainland china owns about 75%(i think) so why would they care what the 'headline' figures are. But when you are arguing with CAD about fuel surcharges, relaxing constrictive AFTLS, arguing with suppliers and customers about prices, it helps if it looks like you are really hurting. Yes we are hurting now, but not as badly as it will be made out. There is also an element of 'clearing the decks' - if there is anything dodgy or doubtful then write it off all in one go so that moving forward you will look more profitable.
We 'needed' to make a loss in 97 - we actually made an operating profit that year but for the concessions needed off staff etc we needed to make a loss. So management wrote down the value of the 747classics. Now you might think that is fair enough - and if the written down value is accurate then you could probably expect to lease them(747classics) out for a 10% return. We were actually getting around 25% return - that means the value was too low or the rent was too high...you decide which it was, I have my opinion!
Right now there is much focus on forward bookings falling off. Well think about it - if you were planning to fly J class in 6 months would you book now? No, but six months ago, when things were booming, you would book way ahead just to make sure you got a seat. Now you can sit back as you know there will be seats and you might even get it cheaper by waiting.
Its all about expectation management - if you 'fear' for you job you won't argue about payrises, 13th month, leave etc etc. Additionally, making a huge headline loss will give CX credibility when it argues with customers and suppliers over pricing.
The irony over our impending loss....the $4billion or so we lose on fuel hedge book means we will save $40-50Billion in fuel costs over the next two years - but don't expect to see that in a Friday telex;-)
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Bwatchful
I'm not sure of the cruncher.
IMO Swire have a very good track record of disguising this to prevent understanding by the wider masses.
I think NC has given a good summary of it.
ie. what should have been an ordinary year is being "manufactured" to look horrible.
IMO Swire have a very good track record of disguising this to prevent understanding by the wider masses.
I think NC has given a good summary of it.
ie. what should have been an ordinary year is being "manufactured" to look horrible.
