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Cathay Pacific ‘to axe 6,000 staff and Dragon brand’ in bid to stay afloat

Fragrant Harbour A forum for the large number of pilots (expats and locals) based with the various airlines in Hong Kong. Air Traffic Controllers are also warmly welcomed into the forum.

Cathay Pacific ‘to axe 6,000 staff and Dragon brand’ in bid to stay afloat

Old 30th Oct 2020, 16:26
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Just a few random thoughts....


After 9/11 and the GFC everyone thought things would be terrible for years - in both those cases it took a few years(3-4) to get back to 100% flying but it got back to 90% flying rather quickly(less than one year). I still expect, maybe too optimistically, that we will be back to 90% flying by end of 2021 which means it will have been almost 2 years!


Basing people when 99% of your flying is to/from HK is inefficient and costs money. We force it to happen (In JCR now) because Hong Kong costs were far greater than bases - this is no longer the case. Up to base rate I am cheaper in HK - over about 70 hours I am cheaper. Factoring and credit for sims, leave and ground duties are very roughly 10hrs per month or so for long haul pilots and 15+hrs for say Adl/Mel/Syd based 3 man ops. On top of that HOTAC costs are higher for based crew as Hong Kong based events cost money. For HK based pilots it costs less as clearly no HOTAC. The saving of HOTAC for based crew on bases washes out with the saving for HOTAC for Hong Kong crew in Hong Kong.

So 84 credit hours on COS08 long haul equates to about 74-75hours flying COS18. And 84hours 3man flying equates to roughly 70hours on COS18. Pure short haul would be roughly around 65hours on COS18 vs 84hours COS18. So if you want to compare costs use those block hour figures from COS18 vs 84credit hours.


Three man ops to EUR cost more on COS08 because of credit hour factoring etc. Under COS18 it will be cheaper (only a little)


It is cheaper to work COS18 pilots way over min guarantee. My hourly rate past 47hours is about 2/3rds my hourly rate average for first 47hrs(on HKPA). So it is ultimately in CX's interests to work us all as hard as possible on COS18 NOT keep us below base rate. The more hours I fly - the cheaper my average hourly rate gets.


If all the based manning is retained with no attempt to adjust current 'legacy' based terms, then flying will go to HK based crew first up to base rate(39-50hours depending on fleet), then based crew from 0 to 84credit hours - then COS18 for the rest. That is the cheapest cost solution.



I have no crystal ball - but i do know that JCR was not set up to fly people on different contracts - it would not have efficiently handled COS08//COS18 scheduling in HK. So I very much doubt we will have massive differences between based contracts and HK. Why have bases if they cost the same or more? (I mean this from a CX perspective not the legacy position we find ourselves in)


LIFO vs seniority - look at KA - look at 49ers court transcripts- then tell yourself seniority (LIFO) will save you! Whether it is in the contract or not it is only an impediment.


First world laws will protect bases - just like AMS and CDG - just like FWA (Oz) took on/admonished Qantas after it needlessly grounded the airline in 2011


Sickness rate will plummet - partially (maybe 10%) due to fear of loss of job and 90% because of productivity pay


Our paycuts will not save the airline - in the short term they save maybe 10% of the cash burn(and add maybe one month to our survival), and in the long term our profitability will be about 1% higher thanks to COS18


We had 5% attrition and were still growing until 2015. CX then reduced growth drastically for next 4 years. As of end of 2019 we had greater training capacity (numbers and training footprint) than before the TB. So CX can handle up to 10% growth in the short term given reduced attrition (no jobs out there) and up to 10% attrition and no growth with no impact on operations remaining static. In fact - COS18 + JRC could give another huge percentage bump in short term surge capacity (5, 10, 15$%???) which is cheaper than recruitment anyway.

Last edited by Numero Crunchero; 30th Oct 2020 at 17:08. Reason: added a few thoughts
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Old 30th Oct 2020, 16:30
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Originally Posted by veritas777 View Post
Sadly for you, your dream of those idiot cadets crashing planes left and right, and CX coming crawling back to expats begging them to come back with full housing and save the airline from imminent doom, is going to remain exactly that, a dream.
It would be prudent and more acceptable to all if the terms expat and cadet were swapped for experienced aviators and non - experienced aviators. Ethnicity is irrelevant. Experience comes through years of experience and with that the correct formula for cockpit gradient is retained at a reasonable level. Race plays little to no part in it. If CX's plan is to be largely reliant on attracting zero to hero guys and girls off the street or those unable to obtain jobs in their own market after the recovery, and plowing them through ADL at bare minimum cost, and leaning heavily on training and checking then
so be it. That strategy may barely function (and often fails) with today's training department but the training and checking department come Nov 05, 2022 coupled with an industry that is forecast to be entering a slow expansion, thus providing options in less draconian work environments, indicates some serious potential safety considerations. It's all great when it stays on the rails but as soon as something happens for the first time for all of the flight crew members with some added weather challenges then it's all bets off. Especially if a pilot risks losing 1/3 of his/her salary for reporting unfit. Keep in mind that by 'benchmarking' your COS and benefits against a fusion of budget and /or low cost carriers in cheaper cities they have also benchmarked the safety.
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Old 30th Oct 2020, 19:41
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Originally Posted by cxorcist View Post
That’s true, most of the time, until that dark and stormy night with moderate to severe turbulence, high gusty crosswinds, and a contaminated runway; then that highly compensated gweillo captain with heaps of experience looks pretty good.
Rivetting story, where can I go to read more of this fantasy genre fiction?
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Old 30th Oct 2020, 22:31
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Anchorage, in the state of Alaska.

I'll shout you a beer down at the Polar Bar when you've grown a pair.
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Old 30th Oct 2020, 23:45
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Originally Posted by Flying Clog View Post
Anchorage, in the state of Alaska.

I'll shout you a beer down at the Polar Bar when you've grown a pair.
You're certainly not going into Anchorage with high, gusty crosswinds on a contaminated runway.
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Old 31st Oct 2020, 00:01
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Your creative writing skills are certainly very good I'll give you that, might consider a backup career as a fantasy novel author.

Meanwhile back in the real world, it's not the supposedly useless Asian cadets who think they're king of the world and end up crashing 2 747's into each other in Tenerife.
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Old 31st Oct 2020, 01:06
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Very good Veritas777, stoking the fire. You're a bit of a muppet aren't you?

quadspeed is right, there is no one in their right mind that would dare fly into Anchorage when it's high, gusty, crosswind, AND contaminated.

We would carry enough fuel to divert to Honolulu, everyone knows that. That's why we always pack a snorkel. Shows that you don't have your finger on the pulse mate.

In the meantime, how's the pillow selection coming along in the 777 bunks. Knobhead?
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Old 31st Oct 2020, 01:27
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Originally Posted by veritas777 View Post
Your creative writing skills are certainly very good I'll give you that, might consider a backup career as a fantasy novel author.

Meanwhile back in the real world, it's not the supposedly useless Asian cadets who think they're king of the world and end up crashing 2 747's into each other in Tenerife.
Well... That was the most experienced KLM captain...
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Old 31st Oct 2020, 03:18
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I have worked with senior widebody captians I would not put my family on his flights and conversely 25 year narrow body captains who were spot on. Far too many "highly experienced wide body global sky gods " scare me the Sim ! Read "fail" . For those that can't deal with the younger generation of pilots , good or bad ,get over yourself .
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Old 31st Oct 2020, 03:30
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I don't think many of us will leave in the end. Right now we are still in shock and denial, once the dust has settled reality will kick in. A rented three bed in DB will simply be the new normal, pilot wages will never recover, nowhere.

Cxorcist, your scenario sounds like the perfect oportunity for an autoland to me.
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Old 31st Oct 2020, 03:36
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I don't agree STW. Most will soon realise that there is no future here. They will conclude that it is nothing more than a drudgery, akin to a hamster in a wheel. If you are anything other than a younger single person, you will not be able to make ends meet. Adding up all the costs of living in HK, raising a family and dealing with the associated costs....there is no way forward. Far better to be back home working for a local company. You may not get any further ahead, but you will be home. HK only made sense when there was a significant financial benefit. Now that that is undeniably no longer the case there is no reason to stay. Factor in the risk to health and you can't possibly conclude staying makes any sense at all.
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Old 31st Oct 2020, 03:38
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Originally Posted by veritas777 View Post
Rivetting story, where can I go to read more of this fantasy genre fiction?
Twice when I was a FO I stopped the cadet - Captain from making a smoking hole. As a Captain I have lost count of the number of times I have had to assist a FO (of the new generation) to fly a profile and / or land the aircraft. The safety concerns been raised are real.

What separates us from the Lion Airs of this world? It used to be our selection process (gone), our experience levels (gone), our training standards (gone) and our culture (now toxic beyond belief). We are now just another Asian LCC, waiting to kill hundreds of pax.
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Old 31st Oct 2020, 03:59
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mngmt mole, I guess it will depend on oportunities at home. With my passport, there are pretty much zero right now. Time will tell if that is going to change.

Controlled rest, the pay at Lion Air is about 5000 USD for a captain. We are paid comparable with EK and SIA etc, and they don't crash either. Forget the safety argument, it's a fugazi.
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Old 31st Oct 2020, 04:04
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STW, I understand that some have few options (many of my great SA friends as a case in point). Regardless, the job at CX is pretty empty at this point. For most it will be better to head home.
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Old 31st Oct 2020, 07:06
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Originally Posted by quadspeed View Post
You're certainly not going into Anchorage with high, gusty crosswinds on a contaminated runway.
You mistook Flying Clog. He meant when we've grown enough of a pair to say screw the asinine hotel lockdown and actually cross the street to the Polar Bar.
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Old 31st Oct 2020, 08:27
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What hotel lockdown?
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Old 31st Oct 2020, 11:27
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"Far better to be back home working for a local company."

Can I ask what "local" companies are you thinking off?

Every airline in the world is laying off people by thousand - if and when things start to improve slowly most will be recruiting form their old employees for sure - it makes a lot more sense than hiring someone who has never worked for you. I think if you leave HK you're looking at leaving the airline business. My advice is that anyone who currently has a job should cling onto it for dear life and make whatever adjustments you have to and pray for a vaccine
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Old 31st Oct 2020, 12:36
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Yes, of course in most cases this means leaving the airline business.

Why in the fresh hell would you want to stay in it?

If you decide to stay and put up with it, then you really have no one else to blame.
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Old 31st Oct 2020, 15:38
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Originally Posted by Asturias56 View Post
"Far better to be back home working for a local company."

Can I ask what "local" companies are you thinking off?

Every airline in the world is laying off people by thousand - if and when things start to improve slowly most will be recruiting form their old employees for sure - it makes a lot more sense than hiring someone who has never worked for you. I think if you leave HK you're looking at leaving the airline business. My advice is that anyone who currently has a job should cling onto it for dear life and make whatever adjustments you have to and pray for a vaccine

​​​​​​Hong Kong is clearly not immune to the effects of C-19. If the rest of the world is still not in the process of recovery in a couple of years then neither will Hong Kong and the layoffs will begin all over again. But this time under COS18 or COS20 or 21 and all of its draconian policies. .... In the meantime you'll never really know and when it's all said and done, if things haven't improved then many will be heading home anyways - if they can - albeit possibly quite abruptly and joining at the back end of the local hiring/personal networking cue.

Many who are fortunate to have the option to resign or not sign have spouses, kids and other loved ones overseas whom they haven't seen in a very long time and are unlikely to see at all in even longer. How do you possibly balance that with the steaming perma-pile of turd on offer.

The only other option is to sign then try and take a vast amount of unpaid leave if one can maybe be granted it in 1 go. But you won't find out until well after signing. No pay/housing allowance after March, ratings and other endorsements may expire while on leave and all in combination with open season for round 2 with no LIFO. Who would CX chose to layoff - the current pilot in HK or the guy/gal needing stacks of training money to get current and then claim the balance of their ARAP. If you think they would do the right thing then I'm sorry to be the bearer of more bad news but you would need your head examined...don't shoot the messenger.

CX have had 8 months to concoct their master plan and meanwhile telling all that you shouldn't believe the rumours etc... The best that the Dear Leaders could come up with is basically just excellerating the plan that had been on the books well prior to C-19. We have all been given a momentary clear view of the decisions at the highest level. The ones speculated over for years. So now that it's opaque again what do you think is next?

Getting the family out of hk or getting reunited with family overseas in a controlled way in combination with possible options in persuing other sources of income that could very well still be aviation related and getting ones self 'whole' again away from what without doubt will be one of the, if not THE most toxic work environments could very well exceed the value and instability of COS18 and all the other cuts taking place.

The ability to be ready and poised to strike at the first good opportunities back home while being present is also hard to quantify. If one is fortunate to have options then this may be all you need for change. Slow but positive change. The decision is hopefully not simply between CX vs destitution for all. For those who do not have options or lack the courage and fortitude to follow it then I am very sorry.

Cathay and Dragon pilots have all just had the rug collectively pulled out from under our feet. But remember, don't believe the rhumors... because the truth is worse.
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Old 31st Oct 2020, 16:02
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Originally Posted by Flying Clog View Post
Yes, of course in most cases this means leaving the airline business.

Why in the fresh hell would you want to stay in it?

If you decide to stay and put up with it, then you really have no one else to blame.
Because we have mortgages to pay, kids to put through college and mouths to feed.


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