Cathay Pacific Shares Plunge
As soon as the Middle East Carriers came on the scene with a far superior product, CX "Managers" were in trouble. They seem to be unable to " Manage" anything. Pilots, Engineers, rosters, remuneration and COS, fuel hedging, cadet training (and promises) etc etc. Not sure why such blatant incompetence is tolerated. Maybe it won't be for long.
If somebody doesn't do something "Managerial " pretty soon, there won't be anything left to Manage.
If somebody doesn't do something "Managerial " pretty soon, there won't be anything left to Manage.
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Don't worry about Kahaha
He is an ex KA driver now at HKE
He also wants to be a trainer but they wont let him . A sad pathetic individual with numerous chips on shoulder.
He is an ex KA driver now at HKE
He also wants to be a trainer but they wont let him . A sad pathetic individual with numerous chips on shoulder.
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I agree ok4wire, a "good profit" without the terrible fuel hedging. Indicates to me that the company is basically sound and "most staff " doing a great job. This result was caused by very small senior personnel ( a couple people?!) and should not be used as the basis to cut or trim staff costs in any way.
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I never cease to be amazed that the board , or the Swires themselves ,have not removed the entire management team from this once great company and installed a management team that actually knows what they are doing .
Our product has slipped well below that of our Mid East competitors, and the location advantage that we once held in HK, no longer has the same strategic importance. Our passengers are moving to other airlines because the food is better , the seats are better , the entertainment is better and the service is better . They will put up with the inconvenience of the extra stop to enjoy a better product . Once they are gone it's very difficult to get them back .
So what is the issue ? Basically this penny pinching management team , who pay themselves huge bonuses , have debased the product to such an extent that our once loyal passengers no longer wish to avail themselves of the product on offer and are voting with their feet .
Salaries and COS company wide have been decimated . the not unexpected result of this is that no one really gives a sh-t any more and it shows . Starting from check in ,right through to the service on board from the Cabin Crew, the enthusiasm has been effectively beaten out of the employees . So why should they go the extra mile ? The food choices in FC are often not available, simply because they don't load sufficient quantities . Try ordering a beer in FC , the choices predominantly are Carlsberg , TsingTao , or Heineken . That's it . Only One champagne label, the list goes on and on . Everything is limited because it has been cut to the bone . Take a look at Air NZ's mattress tops for J and FC passengers,they are about an inch or more thick . what do we get a super thin pad . Whoopie !!!
People who pay top dollar for FC expect a certain level of service and we are no longer providing it . The only difference between Business and FC food is the plate that it is served on, That just isn't good enough in today's competitive world .
Seriously this management need to take a trip on one of the Mid East carriers to see how passengers should be treated . They need to understand, but are seemingly incapable of grasping a rudimentary fact ,that you need to provide a top class product to attract a passenger prepared to pay a premium . This starts with spending money on the items alluded to above, and more importantly recognising the importance of the impact that frontline staff have on your business . Staff that are happy and feel valued will willingly go the extra mile
Then we get to the fuel hedge debacle . The oil company executives will be receiving huge bonuses for selling a bill of goods to a bunch of absolute amateurs . Again why haven't those responsible for this mess been terminated ? So to counteract the fuel hedging losses the managements brilliant strategy is to cut spending on everything else , which is ultimately driving our passengers away, and so the cycle continues into a slow death spiral . But because the management team are totally myopic and determined to continue with this failed policy , I do not see any decent outcome .
If this were my company , I would have fired the whole lot of them years ago and employed someone who understands the airline business and what it takes to succeed
Our product has slipped well below that of our Mid East competitors, and the location advantage that we once held in HK, no longer has the same strategic importance. Our passengers are moving to other airlines because the food is better , the seats are better , the entertainment is better and the service is better . They will put up with the inconvenience of the extra stop to enjoy a better product . Once they are gone it's very difficult to get them back .
So what is the issue ? Basically this penny pinching management team , who pay themselves huge bonuses , have debased the product to such an extent that our once loyal passengers no longer wish to avail themselves of the product on offer and are voting with their feet .
Salaries and COS company wide have been decimated . the not unexpected result of this is that no one really gives a sh-t any more and it shows . Starting from check in ,right through to the service on board from the Cabin Crew, the enthusiasm has been effectively beaten out of the employees . So why should they go the extra mile ? The food choices in FC are often not available, simply because they don't load sufficient quantities . Try ordering a beer in FC , the choices predominantly are Carlsberg , TsingTao , or Heineken . That's it . Only One champagne label, the list goes on and on . Everything is limited because it has been cut to the bone . Take a look at Air NZ's mattress tops for J and FC passengers,they are about an inch or more thick . what do we get a super thin pad . Whoopie !!!
People who pay top dollar for FC expect a certain level of service and we are no longer providing it . The only difference between Business and FC food is the plate that it is served on, That just isn't good enough in today's competitive world .
Seriously this management need to take a trip on one of the Mid East carriers to see how passengers should be treated . They need to understand, but are seemingly incapable of grasping a rudimentary fact ,that you need to provide a top class product to attract a passenger prepared to pay a premium . This starts with spending money on the items alluded to above, and more importantly recognising the importance of the impact that frontline staff have on your business . Staff that are happy and feel valued will willingly go the extra mile
Then we get to the fuel hedge debacle . The oil company executives will be receiving huge bonuses for selling a bill of goods to a bunch of absolute amateurs . Again why haven't those responsible for this mess been terminated ? So to counteract the fuel hedging losses the managements brilliant strategy is to cut spending on everything else , which is ultimately driving our passengers away, and so the cycle continues into a slow death spiral . But because the management team are totally myopic and determined to continue with this failed policy , I do not see any decent outcome .
If this were my company , I would have fired the whole lot of them years ago and employed someone who understands the airline business and what it takes to succeed
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Good call, pretty boys, turning down the 6% pay rises on offer. I am sure that showed them we meant business!!! Which was dumber the fuel hedging - that cost Ivan nothing personally or turning down our pay rise? Sorry remind me again why we did that?
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Simple iPad.
What we had to give up in exchange for their paltry pay offer wasn't worth it.
But I guess being Gen Y it's difficult to see anything long term. You'll understand one day.
What we had to give up in exchange for their paltry pay offer wasn't worth it.
But I guess being Gen Y it's difficult to see anything long term. You'll understand one day.
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CX should have just taken a charge and written off their hedging loss in one year; owned it, and then refocused on cost structures going forward. I do agree the ME3+TK have had an impact but they are clearly experiencing their own issues now too.
Instead, they have morphed CX into a product that offers little value. The affordable fares don't accumulate miles (or only 25%), so it becomes easy to fly other airlines since one of the main benefits of consistently flying CX has been removed. On my last return flight from SG, I really could not tell the difference between my dish, and the Italian cat food I give my pet. I'm not joking, it looked the same.
Instead, they have morphed CX into a product that offers little value. The affordable fares don't accumulate miles (or only 25%), so it becomes easy to fly other airlines since one of the main benefits of consistently flying CX has been removed. On my last return flight from SG, I really could not tell the difference between my dish, and the Italian cat food I give my pet. I'm not joking, it looked the same.
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Cathay has been a top tier airline in Asia and even the World for decades. And along with Singapore Airlines has been my top two favorites.
I do hope CX gets itself back into being the best again and doing it profitably.
With such a huge loss from fuel hedging it still managed to lose relatively little money. An annual loss even much smaller EVA has had before and survived.
Wishing CX the best in it's recovery. However, cheapening the product and raising the price of tickets is not going to work. Cattle are much smarter these days.
Re-examining what is profitable and what is not will help. Maybe getting rid of First Class (as is the trend among many of it's peers) may be needed. First Class may become something only the ME3 can work with.
The Titanic was likely well run, until it hit the Iceberg. CX has hit it's Iceberg with the fuel hedge. Is it going to sink? Or Swim ? I am hoping it swims and I think the fundamentals seem to be workable (considering the relatively small loss on such a monumental fuel hedge loss).
I'd like to fly on CX again. Hope it's around when I get around to doing that.
I do hope CX gets itself back into being the best again and doing it profitably.
With such a huge loss from fuel hedging it still managed to lose relatively little money. An annual loss even much smaller EVA has had before and survived.
Wishing CX the best in it's recovery. However, cheapening the product and raising the price of tickets is not going to work. Cattle are much smarter these days.
Re-examining what is profitable and what is not will help. Maybe getting rid of First Class (as is the trend among many of it's peers) may be needed. First Class may become something only the ME3 can work with.
The Titanic was likely well run, until it hit the Iceberg. CX has hit it's Iceberg with the fuel hedge. Is it going to sink? Or Swim ? I am hoping it swims and I think the fundamentals seem to be workable (considering the relatively small loss on such a monumental fuel hedge loss).
I'd like to fly on CX again. Hope it's around when I get around to doing that.
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Armchair. I respect and value your opinion. Sadly, our management have lost the one crucial ingredient necessary to prosper in a more competitive marketplace: the loyalty and trust of their staff. After 20+ years of outright attacks and abuse, lack of respect and dishonest dealings (how many lawsuits involving their own employees?), we are now at a juncture where only a demonstration of commitment to change will restore that. That demonstration has to involve replacing most of our senior management. JS and IC have proven woefully inept and in IC's case, embarrassingly so (check out his Bloomberg video of a few months ago). Many of us have spent decades here, doing the professional and competent job of safely operating the company aircraft. We and our families have tied our entire futures to the success of this company. A small band of self-serving, greedy and venal managers have put all of that at risk. Enough.
Numero Crunchero are you still out there?
If so as you are far more wiser a person than I when it comes to numbers, could you give us your take on the profit/loss figures. My 2 questions are: 1. Is it fact that Cx would be around $7 Bill HKD in profit without the fuel hedge loss and 2. the quote going around of CX having to sell 120% of seats on each flight to be in the black. If this is true, and disregarding the fuel hedge loss, how does this equate?
Thanks,
b.
If so as you are far more wiser a person than I when it comes to numbers, could you give us your take on the profit/loss figures. My 2 questions are: 1. Is it fact that Cx would be around $7 Bill HKD in profit without the fuel hedge loss and 2. the quote going around of CX having to sell 120% of seats on each flight to be in the black. If this is true, and disregarding the fuel hedge loss, how does this equate?
Thanks,
b.
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I would be cautious of the "120%" of each seat sold figure. It seems unlikely that is factual, or at best a very selective use of facts. It would not be beyond our management to have stories 'planted' in the press to justify their future plans. Having been here as long as I have, nothing surprises me anymore. Fact: Since the early 90's CX management have been claiming the sky is falling. Every Friday, every annual report, every utterance.....for going on 30 years now. Other than a couple of years, profit every single time. I suspect most of what you are hearing is utter rubbish, and the only loss is due to the grossly incompetent fuel hedging. Still haven't heard the names of those responsible, or which third tier carrier in the Congo they are now working for.. 
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Mmmm.
Cathay's problems are far deeper than the fuel hedging screw up.
Having lived the dream life for so long as a company they completely failed to appreciate the changing market, and the impact of the growing Chinese airlines / Middle East carriers.
Put simply, CX cost base is to high, Andy therefore regardless of how new the aircraft are, load factor and all the other factors they are bringing slaughtered by their neighbours, as well as the Middle East carriers.
I would brace yourselves for some drastic restructuring centred around employee costs.
Cathay's problems are far deeper than the fuel hedging screw up.
Having lived the dream life for so long as a company they completely failed to appreciate the changing market, and the impact of the growing Chinese airlines / Middle East carriers.
Put simply, CX cost base is to high, Andy therefore regardless of how new the aircraft are, load factor and all the other factors they are bringing slaughtered by their neighbours, as well as the Middle East carriers.
I would brace yourselves for some drastic restructuring centred around employee costs.
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Good news for future CX wannabes and current staff.. "solution for Cathay Pacific is to increase the crew on hand to serve travellers, with the airline aiming to hire another 1,300 staff this year including pilots and attendants, Chu said without saying if any staff will be laid off"
Cathay Pacific reports second loss since 2008 as rivals? cheaper fares erode margins | South China Morning Post
and slowwwwly catching up with technology...
Cathay Pacific rethinks in-flight meals with on-demand catering trial on long haul services | South China Morning Post
"The airline is also considering introducing the option of pre-ordering inflight meals akin to a “book the cook” style of service seen on rival carrier Singapore Airlines"
probably end up as this in the future... https://www.facebook.com/AirAsia/vid...2880802657387/
Cathay Pacific reports second loss since 2008 as rivals? cheaper fares erode margins | South China Morning Post
and slowwwwly catching up with technology...
Cathay Pacific rethinks in-flight meals with on-demand catering trial on long haul services | South China Morning Post
"The airline is also considering introducing the option of pre-ordering inflight meals akin to a “book the cook” style of service seen on rival carrier Singapore Airlines"
probably end up as this in the future... https://www.facebook.com/AirAsia/vid...2880802657387/
Last edited by jetjockey696; 16th Mar 2017 at 09:01.
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To reverse the question;
What load factor would be required to turn an operating profit, if we were paying $50 a barrel for fuel (like everyone else)?
The fact remains that if it is indeed a "structural change" to the industry, rather than a cyclical one, all airlines (or at least the ones in the locale) are in the same boat. Strangely, the rest all seem to be doing just fine. That's because their cost base (fuel being the biggest part thereof) is at the appropriate level, where they can compete healthily with each other while achieving a satisfactory yield.
$8BN. That's the figure we would have as profit, without the hedge. That's in spite of our expensive non-fuel cost base.
A small number of people are responsible for losing 8.5 billion. Consequently, they have allowed a feeding frenzy by the competition, allowing them to slaughter us.
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8029848,
How much is Cathay paying for fuel, and what are the Chinese and ME carriers paying? Why are the employee costs such a serious problem?
Yes, Cathay needs to reduce its costs. Employee costs should be looked at. But that large lump you see in the rug is fuel cost that somehow was swept off the front pages of the results.
How much is Cathay paying for fuel, and what are the Chinese and ME carriers paying? Why are the employee costs such a serious problem?
Yes, Cathay needs to reduce its costs. Employee costs should be looked at. But that large lump you see in the rug is fuel cost that somehow was swept off the front pages of the results.
which also seems to gloss over the hedging issue
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Staggers. I can tell you with out any fear of being wrong. CX will try to "stop the buck" right at our and our families door. They will never hold themselves accountable. It will always be 'our' fault. Time for all of us to rise up and tell them that they have squandered a legacy of professionalism and financial success. We are NOT to blame, they are. They need to hear that loudly, from all of us. This is about to get serious.