HK$ 4.8 Billion profit resulting from Time to Win strategy

[TheGreenDragon]

Then his lordship Sir Hogg woke up from his dream, reality bites , so tries to remember his lines for the 11am media , fake news, yawn fest.
“huge competition from China and middle east” , “ excessive pay structure for our pilots”, “
Massive inefficiency of zero domestic flights” “ a weak US dollar” , “ Brexit!”

Shhh , lets not mention our bonuses and stock options .

[Trafalgar]

As I mentioned yesterday, it's over. CX has now been crippled by probably the worst and most discredited management in the industry. Sadly, the only ones who will truly suffer are the employees of the airline. It is now firmly established on it's slide to oblivion. The senior management have their Swire parachutes, so they will be blind and deaf to the destruction they have caused. Here is one line from the headline article in the SCMP:

"....The airline is also among the few marquee Asia-Pacific carriers not to operate a budget airline, which has hampered its efforts to compete more effectively..."

Again, another management failure. One they arrogantly dismissed years ago, meanwhile ceding the slots, revenues and market share to our now well entrenched competitors. If it was an in-house airline, the revenues and profits would have flowed through. Instead, every dollar spent on LCC is going to another group of owners, and THEIR employees. Well done RH and co, another splendid own-goal.

This airline is a dead man walking. It is probably not recoverable, as any action our management takes will only make things worse. They have lost the minds and souls of their employees, and now are losing them literally as well. If you have any viable option, take it. To risk staying at CX will surely result in disaster for your careers and families. Wake up to the reality of what this sad and pathetic company has become. There is no hope left. Get out while you can.

[Trafalgar]

A further thought. When you hear the inevitable 'blame' from RH later in the day that will strongly focus on the pilots, remember this: most other major airlines around the world are raking in record profits, and that with much higher cost structures than ours. This airline has been crippled by incompetent management. That is all you need to know, and sadly, the lunatics are still in charge of the asylum. On average, our "per pilot" cost is lower than nearly all the major airlines. In fact, the average cost of a pilot is now less than half what it was 25 years ago in inflation adjusted terms. CX management have destroyed this airline through incompetence, arrogance and willful disregard for all the efficiencies staring them in the face (basings, proper implementation of CMP, etc). They have now pushed this airline to the point that it probably can't be recovered. The pilots are leaving to salvage careers at carriers that have a modicum of sane management, and proper working conditions. The competition in HK smell blood and will turn the screws. The Govt and people of HK no longer respect or care about CX. On every level CX is wounded and dying. Don't let you or your families die with it. There is no happy ending here.

[kenfoggo]

Expecting a HUGE operating profit generated by the excellent effort of the staff, only to be dragged down by a HUGE fuel hedging loss generated by the Management of the airline.

[enoughisenough_]

CX would of been profitable if it wasn't for the incompetent managers who messed up the fuel hedging. That's the only thing that matters.

[Trafalgar]

Strategy "A" :

1) Fire the entire managment
2) Expand bases asap
3) Let the pilots control the rostering

Oh, wait....just woke up...crazy dreams i was having....

[Numero Crunchero]

Past losses

In 2008 it was a 'mark to market' loss of 8billion. The majority of that loss was for future years. So if the fuel price had stayed the same from that point on (31/12/08) then yes CX would have lost a cumulative $8 billion but because of Accounting standards that stood at the time, the loss was 'recognised' in the 2008 accounts.

In actual fact we lost $309 MILLION in realised hedge losses in 2008. Not $8 Billion.

In 2009 we made a hedging GAIN of $740million and an unrealised hedging gain of over $2billion.


So the point of difference is here is this....

2008 $309million loss for the group
2009 $740million gain for the group

2017 $6,450million loss!

[Trafalgar]

So....we're "winning"....

[Avinthenews]

2nd half of 2017 made a $792,000,000.00 profit.

The doom and gloom is over.

Not through any skill of course, just location location location and a reducing fuel hedge screw up.

[Trafalgar]

$6,450 million loss, and AT wants to take the P fund away from us and our families. How about you stop THROWING BILLIONS away and then (and only then) we can sit down and talk. In the meantime, younger pilots who still have a career to worry about are exiting this winged version of the Titanic.

[cxorcist]

The takeaway for me is that the “Management” put us (the employees) in an $800,000,000 US hole in 2017, and we clawed back all but 20% of that. I think we all deserve a full 13th month. Silly me!!! Here’s to YOUR bonuses mis-Management... How much are you skimming off the airline? I bet it’s more than a full 13th month would have cost for all of us.

[cxorcist]

... and just for perspective, the 2017 losses from fuel hedges alone was 37% of all staff costs combined. So they literally want us to pay for their hedging debacle. Some have even lost their jobs. TTW!!!

[mngmt mole]

Sadly you are correct. Grinning idiots on CNY floats as just one example.

[cxorcist]

Originally Posted by Curtain rod

Yes. Insane. But most don't understand, and keep working more for free and providing max goodwill at every opportunity. We are surrounded by a bunch of idiots.

It’s like enabling your abuser and then blaming yourself. “Bunch of I diots” is an understatement.

[Air Profit]

Grinning idiot on the CNY float indeed. I want to up. It's people like him that enable our management to avoid the recognition of their failings. One or two sycophantic pilots jumping at every chance to enable and justify the management and their tactics. While he was jumping around on the float, AT was sitting in her office planning the next cuts to HIS conditions. You sir are an idiot beyond redemption. You make me ill.

[oblivia]

CX would of been profitable if it wasn't for the incompetent managers who messed up the fuel hedging.

Just to be clear, this is far more than just messing up hedging. The only purpose of a true hedge is to smooth earnings (to help executives get their bonuses), but in the long run a hedge should have no effect on profit/loss. Oil prices go up and down — and airlines can do nothing about it.

What Cathay has done repeatedly is not hedging. It's reckless financial speculation.

[Trafalgar]

Reference the above: when do the senior management start firing themselves? Just curious. If I had cost the airline BILLIONS due to my incompetence and arrogance, I suspect I would not be flying anymore. So explain to me, a) why are they still in their jobs ? , and b) why are THEY not paying for the mistakes they made, instead of threatening to make the other employees suffer and pay for their mistakes? Before I hear ANYTHING else from the likes of RH or AT, I want the AOA to get them to answer those two questions. Otherwise, no negotiation, no concession, no cooperation.

[Zapp_Brannigan]

Come on, Trafalgar, they don't blame the pilots for hard landings, do they?

[OK4Wire]

Dan B's got a good point, but I wonder what the numbers would look like if there had been NO fuel hedging AND the fuel had stayed up at around the $150 mark?

In other words, what was the risk/reward ratio for this gamble?

[crwkunt roll]

Shhh , lets not mention our bonuses and stock options .

In "FAQ" it says they are foregoing their Bonuses for the second year in a row.
Doesn't say how much they'll be paid in the future to make up for it.