CX Annual "Negative Profit"
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Yes but germans managed to squeak a profit.... So yes it is a FU*K UP!
By GEORGE FREY, AP Business Writer George Frey, Ap Business Writer – Wed Mar 11, 6:37 am ET
FRANKFURT – Deutsche Lufthansa AG, Germany's largest airline, reported Wednesday a 65 percent drop in net profit for 2008, as the economic slowdown and higher fuel prices ate into its bottom line. The company also lacked the large one-time gains it booked in 2007.
The Cologne-based airline said net profit for the year fell to euro599 million ($755 million), compared with euro1.7 billion in 2007.
Lufthansa's operating profit fell 2.2 percent to euro1.35 billion in 2008 from euro1.38 billion in 2007, when the company booked one-time gains, including euro503 million from the sale of its stake in travel company Thomas Cook.
The company, which did not immediately release fourth quarter figures, said revenues were 14 percent higher at euro25 billion, from euro22 billion in 2007.
Lufthansa Chief Executive Wolfgang Mayrhuber said the company is well equipped to cope with the global economic crisis, although the company said it's "not possible to forecast the duration and extent" of the downturn.
"One of the most challenging years in its history lies ahead of the aviation industry" Lufthansa said.
The company said the global economic slowdown has been particularly felt in its passenger and catering business segments.
The passenger business segment was hurt by record fuel costs, strike-related losses and a decline in demand caused by the dowturn in the world economy during the second half of the year.
Passenger revenues rose 15 percent for the year to euro18.4 billion, while the passenger business operating profit fell 13 percent to euro722 million.
Catering saw revenues decline 4 percent to euro2.3 billion, while the catering business operating profit fell 30 percent to euro70 million.
Less demand for airfreight also affected Lufthansa Cargo, particularly in the second half of the year, as the economic crisis hurt demand. Still, for the full year 2008 the cargo segment was able to post gains, with revenues up 7 percent to euro2.9 billion. Operating profit rose 21 percent to euro164 million.
Lufthansa's aircraft maintenance, repair and overhaul business saw revenues rise 3 percent, while the MRO business operating profit rose 2 percent.
Lufthansa said it "intended to maintain our lead in the far more challenging environment of 2009." Lufthansa is poised to surpass AirFrance-KLM by sales for 2008, which would make Lufthansa Europe's largest airline by that measure. AirFrance-KLM is scheduled to report its earnings in May.
Shares of Lufthansa were 1.2 percent higher at euro8.30 in Frankfurt morning trading.
By GEORGE FREY, AP Business Writer George Frey, Ap Business Writer – Wed Mar 11, 6:37 am ET
FRANKFURT – Deutsche Lufthansa AG, Germany's largest airline, reported Wednesday a 65 percent drop in net profit for 2008, as the economic slowdown and higher fuel prices ate into its bottom line. The company also lacked the large one-time gains it booked in 2007.
The Cologne-based airline said net profit for the year fell to euro599 million ($755 million), compared with euro1.7 billion in 2007.
Lufthansa's operating profit fell 2.2 percent to euro1.35 billion in 2008 from euro1.38 billion in 2007, when the company booked one-time gains, including euro503 million from the sale of its stake in travel company Thomas Cook.
The company, which did not immediately release fourth quarter figures, said revenues were 14 percent higher at euro25 billion, from euro22 billion in 2007.
Lufthansa Chief Executive Wolfgang Mayrhuber said the company is well equipped to cope with the global economic crisis, although the company said it's "not possible to forecast the duration and extent" of the downturn.
"One of the most challenging years in its history lies ahead of the aviation industry" Lufthansa said.
The company said the global economic slowdown has been particularly felt in its passenger and catering business segments.
The passenger business segment was hurt by record fuel costs, strike-related losses and a decline in demand caused by the dowturn in the world economy during the second half of the year.
Passenger revenues rose 15 percent for the year to euro18.4 billion, while the passenger business operating profit fell 13 percent to euro722 million.
Catering saw revenues decline 4 percent to euro2.3 billion, while the catering business operating profit fell 30 percent to euro70 million.
Less demand for airfreight also affected Lufthansa Cargo, particularly in the second half of the year, as the economic crisis hurt demand. Still, for the full year 2008 the cargo segment was able to post gains, with revenues up 7 percent to euro2.9 billion. Operating profit rose 21 percent to euro164 million.
Lufthansa's aircraft maintenance, repair and overhaul business saw revenues rise 3 percent, while the MRO business operating profit rose 2 percent.
Lufthansa said it "intended to maintain our lead in the far more challenging environment of 2009." Lufthansa is poised to surpass AirFrance-KLM by sales for 2008, which would make Lufthansa Europe's largest airline by that measure. AirFrance-KLM is scheduled to report its earnings in May.
Shares of Lufthansa were 1.2 percent higher at euro8.30 in Frankfurt morning trading.
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And this just in..
..and so the spin continues to try and soften up everyone for the 1-2 days, or perhaps a week-months unpaid leave that will be FORCED down our throats very shorty..whilst there are the likes of ex-Oasis DEC's who SHOULD NOT BE in CX in the first place!!!!
Airline braces for more pain following 2008 record loss
Posted On: 12 Mar 2009
Posted On: 12 Mar 2009
Briefings for staff on Thursday - conducted by Chief Executive Tony Tyler and Chief Operating Officer John Slosar - pulled no punches in giving details of why the Cathay Pacific Group made a big loss last year, and why the situation seems to be going from bad to worse.
The reasons behind the HK$8.6 billion loss - the triple whammy of a soaring fuel bill, fuel hedging losses and a recession-drive in passenger and cargo demand - were clearly outlined, with both Tony and John going into some detail to explain how the hedging losses came about. "The airline business was a bad business to be in last year and the hedging situation just made it worse," said John.
Staff were shocked to discover that, disregarding hedging and other variables, CX and KA actually made a HK$1.34 billion operating loss in 2008 compared to a HK$5.2 billion gain in 2007, and that there was a significant drain on the Group's cash reserves last year.
Tony made it clear that the big worry is what will happen in the months to come. Hedging losses are still being made - HK$1.9 billion in the first two months of 2009 - but the major concern now is the continued impact of the economic downturn on the airline's core business.
"We budgeted for an overall reduction in revenue this year, but cargo revenue is well down even against this low budget and passenger revenue is also well behind," said Tony. "We are filling up the back end, but at very low yields, while our front end revenue for January and February was down 34% on 2008. And remember that every premium passenger we lose is worth many in Economy Class."
John explained that negative currency effects are also taking a big bite out of earnings. "Generally we'd like the dollar to be weak because it means the tickets we sell in other currencies can be turned into more Hong Kong dollars, but at the moment we have a 'perfect storm' of currencies working against us to push down yields."
Yields are also being driven down by a slew of cheap fares that are propping up back-end business, and to make it a perfect storm all round the airline's hedging position means it is not getting the full benefit of the low fuel price.
Both the CE and COO concluded that 2009 is going to be a very tough year. The weakening revenue picture makes it clear that even the airline's revised budget and general belt tightening will not be sufficient.
"If we don’t take action now we are looking at another, possibly even larger operating loss for 2009. Given the rate at which our cash balance has been depleted this would place the airline in a very precarious position," John said.
A thorough review of every flight - passenger and cargo - to every destination is now being undertaken and management will soon have a clearer picture of which flights the airline cannot afford to keep operating. This will give an estimate of what surplus capacity there is and whether aircraft need to be parked. The team is already looking at lease renewals and the possibility of deferring deliveries.
In terms of conserving cash, cancelling some flights will help and further efforts will be made to reduce non-customer costs and defer capital expenditure. Both John and Tony made it clear that some difficult decisions might have to be made.
"I know that job security is uppermost in everyone’s minds and it remains our wish and intention to do all we can to keep the network intact, and to keep the team together. However, at the end of the day our ability to do that will depend on the market - and the market has got much worse than we expected," Tony said.
"I fear it’s inevitable that there is going to have to be some pain, which will be shared by all of us on the team. To get our costs down and to preserve our cash balances I think it’s unavoidable that we will be asking for more unpaid leave. And I can’t rule out the possibility of even more painful measures being needed to be taken."
In a sharp and painful downturn "we need to plan for the worst. But eventually the market will recover - and Asia will probably lead the charge when it does," Tony said. "Our job is to make sure CX is alive and well and ready to take advantage when that happens and we will do everything we can to guide the company through these challenges.
"Right now, what you can all do to help is to do your job as well as you possibly can."
CCD
The reasons behind the HK$8.6 billion loss - the triple whammy of a soaring fuel bill, fuel hedging losses and a recession-drive in passenger and cargo demand - were clearly outlined, with both Tony and John going into some detail to explain how the hedging losses came about. "The airline business was a bad business to be in last year and the hedging situation just made it worse," said John.
Staff were shocked to discover that, disregarding hedging and other variables, CX and KA actually made a HK$1.34 billion operating loss in 2008 compared to a HK$5.2 billion gain in 2007, and that there was a significant drain on the Group's cash reserves last year.
Tony made it clear that the big worry is what will happen in the months to come. Hedging losses are still being made - HK$1.9 billion in the first two months of 2009 - but the major concern now is the continued impact of the economic downturn on the airline's core business.
"We budgeted for an overall reduction in revenue this year, but cargo revenue is well down even against this low budget and passenger revenue is also well behind," said Tony. "We are filling up the back end, but at very low yields, while our front end revenue for January and February was down 34% on 2008. And remember that every premium passenger we lose is worth many in Economy Class."
John explained that negative currency effects are also taking a big bite out of earnings. "Generally we'd like the dollar to be weak because it means the tickets we sell in other currencies can be turned into more Hong Kong dollars, but at the moment we have a 'perfect storm' of currencies working against us to push down yields."
Yields are also being driven down by a slew of cheap fares that are propping up back-end business, and to make it a perfect storm all round the airline's hedging position means it is not getting the full benefit of the low fuel price.
Both the CE and COO concluded that 2009 is going to be a very tough year. The weakening revenue picture makes it clear that even the airline's revised budget and general belt tightening will not be sufficient.
"If we don’t take action now we are looking at another, possibly even larger operating loss for 2009. Given the rate at which our cash balance has been depleted this would place the airline in a very precarious position," John said.
A thorough review of every flight - passenger and cargo - to every destination is now being undertaken and management will soon have a clearer picture of which flights the airline cannot afford to keep operating. This will give an estimate of what surplus capacity there is and whether aircraft need to be parked. The team is already looking at lease renewals and the possibility of deferring deliveries.
In terms of conserving cash, cancelling some flights will help and further efforts will be made to reduce non-customer costs and defer capital expenditure. Both John and Tony made it clear that some difficult decisions might have to be made.
"I know that job security is uppermost in everyone’s minds and it remains our wish and intention to do all we can to keep the network intact, and to keep the team together. However, at the end of the day our ability to do that will depend on the market - and the market has got much worse than we expected," Tony said.
"I fear it’s inevitable that there is going to have to be some pain, which will be shared by all of us on the team. To get our costs down and to preserve our cash balances I think it’s unavoidable that we will be asking for more unpaid leave. And I can’t rule out the possibility of even more painful measures being needed to be taken."
In a sharp and painful downturn "we need to plan for the worst. But eventually the market will recover - and Asia will probably lead the charge when it does," Tony said. "Our job is to make sure CX is alive and well and ready to take advantage when that happens and we will do everything we can to guide the company through these challenges.
"Right now, what you can all do to help is to do your job as well as you possibly can."
CCD
..and so the spin continues to try and soften up everyone for the 1-2 days, or perhaps a week-months unpaid leave that will be FORCED down our throats very shorty..whilst there are the likes of ex-Oasis DEC's who SHOULD NOT BE in CX in the first place!!!!
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Liam Gallagher
Yes, that is gambling and that is bad management.
Could you remember someone said that fuel price is too high to be hedged before ? (Of course, situation is changing every minute.)
Yes, that is gambling and that is bad management.
Could you remember someone said that fuel price is too high to be hedged before ? (Of course, situation is changing every minute.)
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While individuals take unpaid leave, you are protecting the guys at the bottom, namely the DECs
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Anyone notice this "Our associate Air China also incurred unrealised mark to market losses on fuel hedging contracts and a provision of HK$1 billion has been made covering fourth quarter losses."
from page 6 http://downloads.cathaypacific.com/c...Results_EN.pdf
from page 6 http://downloads.cathaypacific.com/c...Results_EN.pdf
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Not that easy.
Sorry Bob, it wouldn't be that easy to lay the KA guys off first. Although now at the bottom of the CX seniority many have worked for "Cathay Group" for some years and would have recourse to a UK industrial tribunal if they were discriminated against for redundancy.
The Oasis DEs may be a different matter.
The Oasis DEs may be a different matter.
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Fly747,
That is very true. I could have been clearer. I was only referring to the DEC from Oasis. They also happen to have delayed the command courses of more senior staff, who now probably won't see any course at all for awhile actually. With this kind of (mis)management that we're now accustomed to, I'm sure "forced" unpaid leave will be well accepted
That is very true. I could have been clearer. I was only referring to the DEC from Oasis. They also happen to have delayed the command courses of more senior staff, who now probably won't see any course at all for awhile actually. With this kind of (mis)management that we're now accustomed to, I'm sure "forced" unpaid leave will be well accepted
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Serious question!
Can I just clarify something.
Are you saying that you would prefer to see someone loose their job rather than to 1. volunteer 2. Be issued with a months unpaid leave? All of this based on your luxurious position on a seniority list that you, lets face it, would fly in the face of in a SECOND should you yourself be offered a base near home.
Also VERMIN, (nice you named yourself and saved us the trouble) your with KA I see. You are here trying to turn us CX guys against DEC oasis and KA captains...whats up pal, you regretting not taking the offer yourself or you not have a EU passport? I can just imagine you and your mate Trevfly sitting in the plaza with voodoo dolls. Really jealously is an ugly thing.
When you end up at the bottom of the CX seniority list after the merge and are forced to eat your new CX hat.
When that happens you may be talking yourself into the first batch you claim should be dumped, while the rest of us listen to your advice , nah couldn't be bother taking a months leave so Vermin keeps his job.
Be very careful what your wishing for son! Oh , and quit the stirring...
Are you saying that you would prefer to see someone loose their job rather than to 1. volunteer 2. Be issued with a months unpaid leave? All of this based on your luxurious position on a seniority list that you, lets face it, would fly in the face of in a SECOND should you yourself be offered a base near home.
Also VERMIN, (nice you named yourself and saved us the trouble) your with KA I see. You are here trying to turn us CX guys against DEC oasis and KA captains...whats up pal, you regretting not taking the offer yourself or you not have a EU passport? I can just imagine you and your mate Trevfly sitting in the plaza with voodoo dolls. Really jealously is an ugly thing.
When you end up at the bottom of the CX seniority list after the merge and are forced to eat your new CX hat.
When that happens you may be talking yourself into the first batch you claim should be dumped, while the rest of us listen to your advice , nah couldn't be bother taking a months leave so Vermin keeps his job.
Be very careful what your wishing for son! Oh , and quit the stirring...
Last edited by volarecantare; 14th Mar 2009 at 12:54.
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Really, I admire your honesty.
I would gladly relish my cupcakes in a front row seat at your karmic showdown...
If you fancy a pint posse, don't be lonely, head to DB and play with the Vermin and (trev)flies
, you would be calling each other "mate" in no time.
That friendship would last right up until an Aussie base opportunity offered for them and they had to leapfrog you for the chance...
Now please Posse, all retorts in Latin ... much cuter..
I would gladly relish my cupcakes in a front row seat at your karmic showdown...
If you fancy a pint posse, don't be lonely, head to DB and play with the Vermin and (trev)flies
, you would be calling each other "mate" in no time.That friendship would last right up until an Aussie base opportunity offered for them and they had to leapfrog you for the chance...
Now please Posse, all retorts in Latin ... much cuter..
Last edited by volarecantare; 15th Mar 2009 at 09:09.
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Volare:
Your english is terrible. I would like to know what you're saying but it's lost in the translation of your first language. English is not my first language either, but I do try.
Cheers
Your english is terrible. I would like to know what you're saying but it's lost in the translation of your first language. English is not my first language either, but I do try.
Cheers
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Yes
Yes.
Cathay. An airline full of greedy, narrow minded misfits who show up in the most polluted city in the world because they have nowhere else to go.
I am so glad I left all those years ago.
Here's a tip Ad Posse, there's a big world outside of your goldfish bowl.
Yes.
Cathay. An airline full of greedy, narrow minded misfits who show up in the most polluted city in the world because they have nowhere else to go.
I am so glad I left all those years ago.
Here's a tip Ad Posse, there's a big world outside of your goldfish bowl.
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And what big world would that be? Living in TPE-which makes HKG look like paradise- flying for China Airlines? No thanks. Enjoy, and please feel free to drop by Pprune from time to time to insult us all.
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Never lived in TPE but did a stint with Dynasty, obviously.
But that was 2 jobs ago.
Back in the land of the green grass and blue sky - and loving it.
For what its worth, most who remove the golden handcuffs have no regrets.
But that was 2 jobs ago.
Back in the land of the green grass and blue sky - and loving it.
For what its worth, most who remove the golden handcuffs have no regrets.
