Losses of HK$50 million a month for CX...
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Losses of HK$50 million a month for CX...
Air China Cargo, a joint venture between Air China and Cathay Pacific since 2010, will see its registered capital rise 62 per cent to 5.2 billion yuan (HK$6.5 billion) following a capital injection of two billion yuan announced yesterday.
Air China, which owns 51 per cent of its cargo subsidiary, will pour in one billion yuan in cash and other assets. Cathay's 49 per cent stake in Air China Cargo consists of a 25 per cent equity interest held by subsidiary Cathay Pacific China Cargo Holdings and a 24 per cent economic interest through the returns on loans it provides to Fine Star, Air China Cargo's third shareholder. It will inject 500 million yuan in cash through the former and 480 million yuan in cash through Fine Star.
Cathay said in announcement to the Hong Kong stock exchange that the move would provide funds to assist Air China Cargo to adjust its fleet, reduce its operating costs and develop its cargo charter flight business with China Postal Airlines.
Air China Cargo, whose principal operating bases are in Beijing and Shanghai, reported an audited net loss of 349 million yuan in 2013.
Andrew Orchard, an analyst at CIMB securities, said the magnitude of the capital injection was significant. "The joint venture was not doing so well. It's been loss-making since its inception. This is a signal that Air China and Cathay are going to try to make this work out even though there have been some rumours or concerns that they would potentially shut down the operation altogether."
He said it was revealed to analysts at a recent briefing that the joint venture has been causing losses of as much as HK$50 million per month for Cathay.
Air China and Cathay Pacific inject 2b yuan into cargo venture | South China Morning Post
Air China, which owns 51 per cent of its cargo subsidiary, will pour in one billion yuan in cash and other assets. Cathay's 49 per cent stake in Air China Cargo consists of a 25 per cent equity interest held by subsidiary Cathay Pacific China Cargo Holdings and a 24 per cent economic interest through the returns on loans it provides to Fine Star, Air China Cargo's third shareholder. It will inject 500 million yuan in cash through the former and 480 million yuan in cash through Fine Star.
Cathay said in announcement to the Hong Kong stock exchange that the move would provide funds to assist Air China Cargo to adjust its fleet, reduce its operating costs and develop its cargo charter flight business with China Postal Airlines.
Air China Cargo, whose principal operating bases are in Beijing and Shanghai, reported an audited net loss of 349 million yuan in 2013.
Andrew Orchard, an analyst at CIMB securities, said the magnitude of the capital injection was significant. "The joint venture was not doing so well. It's been loss-making since its inception. This is a signal that Air China and Cathay are going to try to make this work out even though there have been some rumours or concerns that they would potentially shut down the operation altogether."
He said it was revealed to analysts at a recent briefing that the joint venture has been causing losses of as much as HK$50 million per month for Cathay.
Air China and Cathay Pacific inject 2b yuan into cargo venture | South China Morning Post
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Time for another price fixing cargo cartel
And maybe some more careful
fuel hedging.............
50 million a month.....
How many second officers could be trained and employed on that budget
And maybe some more careful
fuel hedging.............
50 million a month.....
How many second officers could be trained and employed on that budget
Sorry, gotta say it....
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No. What we should really do is tell the GMA that considering CX has the money to literally 'throw away' on absurd cargo strategies, they can immediately credit a 10% pay raise, backdated to January (and it really should be back to the expiry of the last pay deal). Further, they can start to explain where the accountability is in the other departments, as it appears the only department in this airline that is fully accountable is Flight Ops. The whole thing sickens me. Excuse me Anna, but why exactly are our new SO's living hand to mouth, living in 'cages' and basically being made to realise that they don't have a real career here, and will never even be able to have a proper life (you know...thinks like girlfriends/wives/children/education for same, etc). As Chris Beebe just said, when is 'enough' ? I don't think any of us need to really think what the answer to that question is for very long. Forget a formal CC declaration, after this I can't imagine a single one of us who isn't on that already. 
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Mole a very thought provoking post. I totally agree with everything except the 10% pay rise We need at least 20% just to bring us back to some sort of equilibrium on pay
The pilots are a profit generating portion of the airline, unlike this loss making freight venture, so one has to wonder why CX would continue to throw good money after bad . Is there a political influence at work here ? or is it simply a case of ineptitude .
There is no longer any accountability either in business or politics, it seems that in this day and age there is no shame in being corrupt or dishonest .
So good luck with trying to get any form of accountability over this issue .Even as a shareholder I very much doubt that I could get any form of accounting for this extraordinary loss .
On the other side of the coin, how long do you think any Captain would be allowed to add 5 tonnes of unnecessary fuel to every flight he did .
I can guarantee that within a very short space of time he/she would be called in to account for his actions
So yes we in FLT OPS are held to account but it would seem that perpetrators of loss making ventures be it fuel hedging cargo are never called to account
A sad reflection of today's corporate culture
The pilots are a profit generating portion of the airline, unlike this loss making freight venture, so one has to wonder why CX would continue to throw good money after bad . Is there a political influence at work here ? or is it simply a case of ineptitude .
There is no longer any accountability either in business or politics, it seems that in this day and age there is no shame in being corrupt or dishonest .
So good luck with trying to get any form of accountability over this issue .Even as a shareholder I very much doubt that I could get any form of accounting for this extraordinary loss .
On the other side of the coin, how long do you think any Captain would be allowed to add 5 tonnes of unnecessary fuel to every flight he did .
I can guarantee that within a very short space of time he/she would be called in to account for his actions
So yes we in FLT OPS are held to account but it would seem that perpetrators of loss making ventures be it fuel hedging cargo are never called to account
A sad reflection of today's corporate culture
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Oriental flyer...
... sorry mate, you're wrong there. The only profit generators are the customers, everything else, personnel/engineering/fuel/etc. is a cost centre that needs to be managed to contribute as little cost to the operation as possible. Thus is the modern management view... funnily, however, it never seems to apply to management...
