Message From the CEO
Thread Starter
Join Date: Nov 2015
Location: HK-CRoC
Posts: 749
Likes: 0
Received 0 Likes
on
0 Posts
Original Post
I was a tad out on the Cargo Price Fixing fines, sorry bout that.
Following a bit more research, CX has paid approximately 1 BILLION HK in
fines re cargo price fixing fines/collusion over the past 10 years (thats "Criminal Conspiracy" or such type laws) to Canada, USA, NZ and AUS.
There was also a massive EU case that has been dropped.
And then there was all the Managers that were fired for these "mistakes", or was there ??
Biggest piss off, I, and most of the company, have to write anti bribery and competition "refresher" annually.
Following a bit more research, CX has paid approximately 1 BILLION HK in
fines re cargo price fixing fines/collusion over the past 10 years (thats "Criminal Conspiracy" or such type laws) to Canada, USA, NZ and AUS.
There was also a massive EU case that has been dropped.
And then there was all the Managers that were fired for these "mistakes", or was there ??
Biggest piss off, I, and most of the company, have to write anti bribery and competition "refresher" annually.
Join Date: Aug 2008
Location: Polar Route
Posts: 5
Likes: 0
Received 0 Likes
on
0 Posts
I'll summarize...
The fuel gambling has not only lost billions of HKDs, it has put CX at a massive competitive disadvantage against the competition which is fueled by mainland windfalls and low cost carrier models. The competitors smell blood in the water.
CX has unwisely decided to trim the edges around the inflight product which makes a once superior service less attractive. Nobody pays a premium for average. So load factor and yield both go down while costs (due to fuel gambling) remain high. Couple this with the industry changing impact the 787 has on long haul markets, and it is little wonder CX is struggling.
People are bypassing big hubs like HK because they are simply inconvenient and risky for delays. For example, Xiamen Airways flies ZGSZ - KSEA with a 787. Why would anyone in their right mind pay a premium to go through YVR or SFO to end up in HK? China Southern is taking 777-300ERs and just announced a big order for 787-9s. Those will fly out of ZGGG. This is occurring all around Asia as carriers can fill 787s and operate them direct to Western cities. Even US carriers are getting in on the action and operating 787 to new destinations previously served only via connections. Will CX's A350s answer this challenge or will they simply be used to reduce seats on routes where market share has already been lost?
Meanwhile, CargoLux is aggressively pursuing CX's Pacific routes from HK and taking aircraft CX loses off lease. Belly cargo yield is down as new services offer a glut of space and direct routing. What is the CX response? Piss off all the hard working and once loyal employees! There is an original and creative remedy.
I seriously wonder if anyone on the 9th floor has the first clue what the hell they are doing. Swires, where are you? Your cash cow is being gored while Chinese Nero (Ivan) fiddles. He is rebranding, as if the paint schemes and logos at CX/KA are the problem. Not even close Ivan the Invisible. Save some face Chu! Step down while there is still an airline for someone else to save, somebody who has the skill and know how to get the job done.
The fuel gambling has not only lost billions of HKDs, it has put CX at a massive competitive disadvantage against the competition which is fueled by mainland windfalls and low cost carrier models. The competitors smell blood in the water.
CX has unwisely decided to trim the edges around the inflight product which makes a once superior service less attractive. Nobody pays a premium for average. So load factor and yield both go down while costs (due to fuel gambling) remain high. Couple this with the industry changing impact the 787 has on long haul markets, and it is little wonder CX is struggling.
People are bypassing big hubs like HK because they are simply inconvenient and risky for delays. For example, Xiamen Airways flies ZGSZ - KSEA with a 787. Why would anyone in their right mind pay a premium to go through YVR or SFO to end up in HK? China Southern is taking 777-300ERs and just announced a big order for 787-9s. Those will fly out of ZGGG. This is occurring all around Asia as carriers can fill 787s and operate them direct to Western cities. Even US carriers are getting in on the action and operating 787 to new destinations previously served only via connections. Will CX's A350s answer this challenge or will they simply be used to reduce seats on routes where market share has already been lost?
Meanwhile, CargoLux is aggressively pursuing CX's Pacific routes from HK and taking aircraft CX loses off lease. Belly cargo yield is down as new services offer a glut of space and direct routing. What is the CX response? Piss off all the hard working and once loyal employees! There is an original and creative remedy.
I seriously wonder if anyone on the 9th floor has the first clue what the hell they are doing. Swires, where are you? Your cash cow is being gored while Chinese Nero (Ivan) fiddles. He is rebranding, as if the paint schemes and logos at CX/KA are the problem. Not even close Ivan the Invisible. Save some face Chu! Step down while there is still an airline for someone else to save, somebody who has the skill and know how to get the job done.
Thread Starter
Join Date: Nov 2015
Location: HK-CRoC
Posts: 749
Likes: 0
Received 0 Likes
on
0 Posts
Ivan and the Big BioFuel investment. Give me a break from the constant stream of Liberal BS.
I think he/they (the board +AT) need to talk to someone who has a simple understanding of physics and chemistry (high school level is all that's needed)
1. When you burn a hydrocarbon to release its energy - you get pollutants Co, Co2 ++
2. To move an aircraft through the air at XX speed you need to burn XXX amount of calories (Kj etc.) worth of "hydrocarbons" to get the energy to move it at that speed - period. It makes ZERO difference whether those calories come from conventional oil or bio-oil. The same amount will be burned producing the same amount of Co, Co2 ++.
So Ivan, please explain just where this investment is:
- "Green"
- Helps the "bottom line"
Airplanes burn fuel for energy, period. Burning fuel results in environmental contaminants. period...
Approximately 40% of ALL the revenue this company makes goes toward buying and burning hydrocarbons to make a profit that goes mostly to 2 shareholders. VERY EXPENSIVE hydrocarbons thanks to the excellent CX Fuel Hedging Strategy...
See "Peter Principle" above
I think he/they (the board +AT) need to talk to someone who has a simple understanding of physics and chemistry (high school level is all that's needed)
1. When you burn a hydrocarbon to release its energy - you get pollutants Co, Co2 ++
2. To move an aircraft through the air at XX speed you need to burn XXX amount of calories (Kj etc.) worth of "hydrocarbons" to get the energy to move it at that speed - period. It makes ZERO difference whether those calories come from conventional oil or bio-oil. The same amount will be burned producing the same amount of Co, Co2 ++.
So Ivan, please explain just where this investment is:
- "Green"
- Helps the "bottom line"
Airplanes burn fuel for energy, period. Burning fuel results in environmental contaminants. period...
Approximately 40% of ALL the revenue this company makes goes toward buying and burning hydrocarbons to make a profit that goes mostly to 2 shareholders. VERY EXPENSIVE hydrocarbons thanks to the excellent CX Fuel Hedging Strategy...
See "Peter Principle" above
Join Date: Jan 2008
Location: The Dark Side
Posts: 3
Likes: 0
Received 0 Likes
on
0 Posts
Late to the party.
Flex88: "...the list could go on, please add."
Try this:
- Introducing PEY and then removing some/all on 330. Having seen the "business case" (aka sycophants homework) for both...identical with the desired outcome being the only difference.
- Re-pitching PEY on 330/777 due customer complaints.
- Introducing new regional JCL... and then removing half of it on 777 because they weren't being filled.
- Re-using long haul EY seats to the regional fleet: seats already well past their sell by date.
CEO on fuel hedging
"We deliberately never hedge 100% of our fuel requirements so we benefit from lower oil prices on the share of our fuel requirements that have remained unhedged"
No s$&t Sherlock. This is like saying "We never bungy-jump without a piece of elastic tied to our ankles". No-one hedges 100% dummy.
The statement is an insult to the intelligence of staff and shareholders alike. Time to put some clothes on Emporer and admit the level of hedging was the single most catastrophic decision in the history of Cathay Pacific Airways.
The CEO of this once proud airline has no place at the top table other than setting out the pencils and notebooks for the sycophants around him.
Flex88: "...the list could go on, please add."
Try this:
- Introducing PEY and then removing some/all on 330. Having seen the "business case" (aka sycophants homework) for both...identical with the desired outcome being the only difference.
- Re-pitching PEY on 330/777 due customer complaints.
- Introducing new regional JCL... and then removing half of it on 777 because they weren't being filled.
- Re-using long haul EY seats to the regional fleet: seats already well past their sell by date.
CEO on fuel hedging
"We deliberately never hedge 100% of our fuel requirements so we benefit from lower oil prices on the share of our fuel requirements that have remained unhedged"
No s$&t Sherlock. This is like saying "We never bungy-jump without a piece of elastic tied to our ankles". No-one hedges 100% dummy.
The statement is an insult to the intelligence of staff and shareholders alike. Time to put some clothes on Emporer and admit the level of hedging was the single most catastrophic decision in the history of Cathay Pacific Airways.
The CEO of this once proud airline has no place at the top table other than setting out the pencils and notebooks for the sycophants around him.
Join Date: May 2002
Location: up here, everyone looks like ants!
Posts: 966
Received 0 Likes
on
0 Posts
The irrational part of their message is that they expect everyone ELSE to take the medicine, but they won't.
They STILL have their hands deep in company's wallet, awarding themselves obscene bonuses and whooping it up while throwing crumbs to great unwashed.
They dare to plead for "help" from the very employees they have relentlessly attacked and vilified for the past 21 years? Really?
They can start by accepting responsibility, voluntarily forgoing THEIR bonuses, cutting THEIR salaries and fixing the mess THEY got this once great airline into.
And, Ivan the incompetent, resign.
To paraphrase Lloyd Bentsen: Ivan, I know CEO's. CEO's are my friends. You're no CEO.
They STILL have their hands deep in company's wallet, awarding themselves obscene bonuses and whooping it up while throwing crumbs to great unwashed.
They dare to plead for "help" from the very employees they have relentlessly attacked and vilified for the past 21 years? Really?
They can start by accepting responsibility, voluntarily forgoing THEIR bonuses, cutting THEIR salaries and fixing the mess THEY got this once great airline into.
And, Ivan the incompetent, resign.
To paraphrase Lloyd Bentsen: Ivan, I know CEO's. CEO's are my friends. You're no CEO.
Join Date: Mar 2015
Location: Hong Kong
Posts: 83
Likes: 0
Received 0 Likes
on
0 Posts
Try this:
- Introducing PEY and then removing some/all on 330. Having seen the "business case" (aka sycophants homework) for both...identical with the desired outcome being the only difference.
- Re-pitching PEY on 330/777 due customer complaints.
- Introducing new regional JCL... and then removing half of it on 777 because they weren't being filled.
- Re-using long haul EY seats to the regional fleet: seats already well past their sell by date.
- Introducing PEY and then removing some/all on 330. Having seen the "business case" (aka sycophants homework) for both...identical with the desired outcome being the only difference.
- Re-pitching PEY on 330/777 due customer complaints.
- Introducing new regional JCL... and then removing half of it on 777 because they weren't being filled.
- Re-using long haul EY seats to the regional fleet: seats already well past their sell by date.
Less revenue coming in, controlled costs (but very costly), it's a tough spot. They need to take a US$1b charge or so and write off the oil gamble so they can move on. SWIRE will need to swallow a poop sandwich at least for 2017, but at least everyone can move on. This piecemeal stuff will only prolong the problem and may never actually reach a point where it is totally fixed.
Join Date: May 2008
Location: USA
Posts: 88
Likes: 0
Received 0 Likes
on
0 Posts
Anotherday......are you for real?
Go and do the sums for the fuel hedging over the last 10 years. We made little bits here and there and then made a huge hedging loss around 2008. Instead of learning from that disaster they managed to create the latest catastrophe.
The problem CX has now is that it thinks it can "LEAN" it's way out of this mess. Unfortunately the product is already skin and bones. It needs some money spent on it, not the other way around!
Go and do the sums for the fuel hedging over the last 10 years. We made little bits here and there and then made a huge hedging loss around 2008. Instead of learning from that disaster they managed to create the latest catastrophe.
The problem CX has now is that it thinks it can "LEAN" it's way out of this mess. Unfortunately the product is already skin and bones. It needs some money spent on it, not the other way around!
This sounds a bit like our old friend "The Management" but, they do not care what you think. 'They' can make the most catastrophic mistakes ( ie fuel hedging) and survive intact. Unless you can organise a buyout, then you do as you're told and watch 'them' make a fortune whilst ( nowadays) - you don't. Simple really.
I've gone but we old timers sure had the best of it.
I've gone but we old timers sure had the best of it.
Join Date: Jul 2005
Location: Hong Kong
Posts: 1,117
Likes: 0
Received 0 Likes
on
0 Posts
No amount of saving will be able to offset the fuel hedge loss!
We have 2 more years of this hedge to play through.
Doing a uncovered hedge (naked hedge) is unbelievable. Doing it twice in 2008 and 2012 is criminal!!!
We have 2 more years of this hedge to play through.
Doing a uncovered hedge (naked hedge) is unbelievable. Doing it twice in 2008 and 2012 is criminal!!!
Join Date: May 2008
Location: All Over
Posts: 471
Likes: 0
Received 0 Likes
on
0 Posts
Lemme ask you this. Can you believe anything they say to be true ? Do you believe the hedge is a real loss or some form of financial scheme or scam ? Does anyone really have any idea how money moves around in these here parts? Ask yourself these questions.
And as such then why get wrapped up over it. It doesn't change our position. Or anyone's actions on the working level. Stand firm, do what you always do, do what you need to do to keep your personal life on track, do not make any form of concessions for anything, take the days off you need, operate safely the way you always have.
But I would have an exit strategy just in case--nothing more than anyone else would under normal ops in the event of downturn.
In other words turn the radio down, do what you enjoy in life, don't break your back working too hard or jumping into crazy schemes to save money, and be 😁.
And as such then why get wrapped up over it. It doesn't change our position. Or anyone's actions on the working level. Stand firm, do what you always do, do what you need to do to keep your personal life on track, do not make any form of concessions for anything, take the days off you need, operate safely the way you always have.
But I would have an exit strategy just in case--nothing more than anyone else would under normal ops in the event of downturn.
In other words turn the radio down, do what you enjoy in life, don't break your back working too hard or jumping into crazy schemes to save money, and be 😁.
Last edited by Shep69; 17th Oct 2016 at 11:32.
Join Date: Oct 2006
Location: Hong Kong
Posts: 651
Likes: 0
Received 0 Likes
on
0 Posts
From 2003-2014 we appear to have made about $4billion in Hedging. In the same period we spent $325billion in buying fuel. So total hedging profit equates to about 1% of the total fuel bill.
For the period 2011-2014(incl) hedging profits ranged from -2.2% to +4.6% of fuel purchased.
In 2015 the actualised hedging loss was 34.6% of the gross fuel cost.
First half of 2016 the actualised hedging loss was 51.2% of the gross fuel cost.
It's pretty clear they changed their hedging SOPs a couple of years ago and it is not working well!
For the period 2011-2014(incl) hedging profits ranged from -2.2% to +4.6% of fuel purchased.
In 2015 the actualised hedging loss was 34.6% of the gross fuel cost.
First half of 2016 the actualised hedging loss was 51.2% of the gross fuel cost.
It's pretty clear they changed their hedging SOPs a couple of years ago and it is not working well!
Thread Starter
Join Date: Nov 2015
Location: HK-CRoC
Posts: 749
Likes: 0
Received 0 Likes
on
0 Posts
"why get wrapped up over it"
Really Shep? "Don't take any form of Concessions"; A scale, B scale C scale D scale, crap staff travel (wrapped up as "enhancements"), forced overtime, no holidays, and now DEFO's with near zero housing.. Sorry Shep, these are all "concessions" that have been rammed down everyones throats - and we shouldn't get "wrapped up in it"? I don't get that !
We are suffering from poor management at every level in CX. In Flt Ops it starts at the XXX-M level gets worse as you (with seniority) get promoted to the M-XXX level and marches on to the GM-XXX level right to the very top of the company.
Re-read the "Peter Principle" article at the beginning of this thread and then contemplate the Flt Ops Managers now or in the past and then the Swire managers!
In todays SCMP, a very good and very relevant article along the same lines.
Corporate geniuses often make the daftest mistakes ? but remember greed can have a stronger sway than rationality | South China Morning Post
Really Shep? "Don't take any form of Concessions"; A scale, B scale C scale D scale, crap staff travel (wrapped up as "enhancements"), forced overtime, no holidays, and now DEFO's with near zero housing.. Sorry Shep, these are all "concessions" that have been rammed down everyones throats - and we shouldn't get "wrapped up in it"? I don't get that !
We are suffering from poor management at every level in CX. In Flt Ops it starts at the XXX-M level gets worse as you (with seniority) get promoted to the M-XXX level and marches on to the GM-XXX level right to the very top of the company.
Re-read the "Peter Principle" article at the beginning of this thread and then contemplate the Flt Ops Managers now or in the past and then the Swire managers!
In todays SCMP, a very good and very relevant article along the same lines.
Corporate geniuses often make the daftest mistakes ? but remember greed can have a stronger sway than rationality | South China Morning Post
Join Date: Aug 2014
Location: Hong Kong
Posts: 17
Likes: 0
Received 0 Likes
on
0 Posts
Especially, the best is in the last two paragraphs:
Stupidity is such a major issue in corporate life, that two business professors, Andre Spicer and Mats Alvesson, have dedicated their careers to its study. They have interviewed thousands of high-skilled executives on the cutting edge of the modern knowledge economy, in fields ranging from technology to banking to pharmaceuticals.
“During the course of our research, we were constantly struck by how these organisations, which employ so many people with high IQs and impressive qualifications, could do so many stupid things,” the authors write in a promotion of a recently published book on their research findings.
Stupidity is such a major issue in corporate life, that two business professors, Andre Spicer and Mats Alvesson, have dedicated their careers to its study. They have interviewed thousands of high-skilled executives on the cutting edge of the modern knowledge economy, in fields ranging from technology to banking to pharmaceuticals.
“During the course of our research, we were constantly struck by how these organisations, which employ so many people with high IQs and impressive qualifications, could do so many stupid things,” the authors write in a promotion of a recently published book on their research findings.