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Losses of HK$50 million a month for CX...

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Losses of HK$50 million a month for CX...

Old 27th Jun 2014, 13:14
  #1 (permalink)  
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Join Date: May 2006
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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
clear.right is offline  
Old 27th Jun 2014, 14:01
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Join Date: May 2003
Location: hong kong
Posts: 294
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
mr Q is offline  
Old 27th Jun 2014, 14:05
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Join Date: Jan 2006
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Talking Sorry, gotta say it....

There's no money in freight!!!
Kitsune is offline  
Old 27th Jun 2014, 14:21
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Join Date: May 2002
Location: up here, everyone looks like ants!
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There's no money in freight....

Cpt. Underpants is offline  
Old 27th Jun 2014, 14:38
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Sounds like an excuse for a paycut
SMOC is offline  
Old 27th Jun 2014, 16:07
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Join Date: Jan 2008
Location: Hong Kong
Posts: 753
Totally agree SMOC.

We should all accept a pay cut to cover the costly mistake of some bean counter.
broadband circuit is offline  
Old 27th Jun 2014, 17:44
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Join Date: Dec 1998
Posts: 62
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.
mngmt mole is offline  
Old 28th Jun 2014, 05:24
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Join Date: Dec 2005
Location: Hong Kong
Posts: 367
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
oriental flyer is offline  
Old 28th Jun 2014, 06:08
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Join Date: Feb 2004
Location: UAE
Posts: 159
Thumbs down

Oh those poor SO.
With a gun to their heads. Forced to sign a contract that is so so bad. I feel so sorry for them.


JAYTO is offline  
Old 28th Jun 2014, 06:28
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Join Date: Sep 2003
Location: Crew bunk
Posts: 133
Wasn't the Air China Cargo deal RH's brainchild? Maybe he should take the hit on that one -- starting with that multi-million $$$ bonus that he got last year.
Pogie is offline  
Old 28th Jun 2014, 06:33
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Join Date: Nov 2001
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Qatar is advertising for dct entry SO's - just saying
gofor is offline  
Old 28th Jun 2014, 11:17
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I believe a few SO's have left for the Middle East already.
Frogman1484 is offline  
Old 28th Jun 2014, 12:39
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Join Date: Dec 2003
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How could it possibly be RH's brainchild re China Cargo. It would have been a commercial decision!
Baywatcher is offline  
Old 29th Jun 2014, 13:43
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Join Date: Jan 2006
Location: England
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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...
Kitsune is offline  
Old 1st Jul 2014, 08:52
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Join Date: May 2008
Location: All Over
Posts: 471
Just more Chinese laundry

Laundering money thru China.

Kinda like real estate in HK.

Claim a paper loss/liability to move money from those who might want it.
Shep69 is offline  

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