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SMOC 21st Apr 2012 11:58

Cathay Pacific Warns It May Have To Park Planes, Cut Flights
Or is it a shortage of crew, I thought we were working our as..s off

HONG KONG *Cathay Pacific Airways Ltd. (0293.HK) warned that the airline may have to park aircraft and reduce flights if weakening demand and high fuel costs persist, underscoring the troubles faced by the global airline industry.

The Hong Kong-based carrier, which already warned of a very challenging 2012, said its business has worsened over the last month with passenger yields--a key measure of passenger profitability--continuing to fall in economy-class products, while it also sees signs of weakness in its first- and business-class cabins, which have traditionally been its most profitable business segment.

The airline said that revenue growth in recent weeks has been falling "well short of target" and failing to keep pace with capacity growth. It noted the recent development isn't a sustainable situation.

"Fuel prices remain at crippling highs and our cargo business still shows no sign of any sustained pick-up," Cathay Pacific Chief Executive John Slosar said in a newsletter for the airline's employees, published Friday. "The recent turmoil in the euro zone reinforces the fact that the world is still balancing on a knife edge," Slosar said.

While Slosar noted that conditions haven't reached the challenges seen during the global financial crisis in 2008-2009, the airline will need to take action to contain costs if the situation persists, noting that it will have to consider more ways to further pare back spending.

Last month, the Hong Kong-based airline reported a 61% decline in net profit for 2011 due to rising fuel costs as well as softer demand for its freight services, and expects continued weakness for its cargo operations in 2012. For last year, Cathay Pacific's fuel costs, which accounted for over 40% of its total operating costs, rose 38% to HK$38.9 billion from HK$28.28 billion in 2010.

At the height of global financial crisis, Cathay Pacific trimmed its flights, initiated no-pay leave for some of its staff, and delayed capital spending to cope with a reduction in revenues.

In March 2011, Cathay Pacific announced cuts on flights it operates to three cities in Japan -- Tokyo, Osaka and Nagoya -- over the first two weeks of April due to the weakness in demand for flights to the country. In December, the airline also said it would scale back plans to expand cargo flying this year and defer the arrival of two new Boeing Co. aircraft in the sign that the slowdown in air freight is deeper and more pronounced than many expected.

Cathay Pacific Warns It May Have To Park Planes, Cut Flights | Fox Business

SLS III Perhaps!

BillytheKid 21st Apr 2012 20:28

What better excuse for not properly staffing your airline. They will have to park planes because of money, not poor planning. Pretty smart if you ask me.

turnandburn 21st Apr 2012 22:23


Staff travel thursday only a couple of flights you could check in the rest xxxx please wait

Kitsune 22nd Apr 2012 11:22

Need to pare back costs? Stop paying ludicrous bonuses to the drones and REMFs in management, most of them do jobs that the local secretaries could do in their sleep...:cool:

Bob Hawke 22nd Apr 2012 14:38

Yes, its true, the problem is too many airframes, we have enough crew.:ok:

Captain Dart 22nd Apr 2012 22:15

REMF's*! Haven't heard that one for a while :}!

Any of the local secretaries in Financial or the basings office would check the Hong Kong taxation ordinance and have the nous to consult with HKIRD before 'onshoring' the based crew; the highly-paid 'suits' sure didn't.

And here we go, they're crying 'poor' again :rolleyes:. As they are already short of cockpit crew it will be interesting whether the pilots get (or not get) SLS if they go that way... I'm sure we will be expected to be seen to be 'taking one for the team' in another form.

They can go and poop in their hats.

*For you non-military types, the first two letters of the acronym stand for 'Rear Echelon'. The last two can be easily deduced.

pill 22nd Apr 2012 23:06

My 20 cents is on direct entry HKG based FO's with full housing by june, and one or two changes/retirements on the third floor. Enjoy the overtime.

Silent Running 22nd Apr 2012 23:38

Plenty of crew but...
CX 256 delayed overnight Fri due no Capt!

cxlinedriver 23rd Apr 2012 00:01

3rd biggest profit every, an improved world economy since then. Full flights.

The high level management (Slosar etc) are only now realizing that their trust in the lower levels (Dick Tall) has been totally misplaced. Recruitment is a mess. FOs and some Capts are leaving. Airframes are arriving. Not everyone will make it to 65 and the new FTLs haven't arrived.

Due to mismanagement the company is screwed. Man-up and say that? No way. Too much bonus at stake.

Due to the hits I have taken over the years, they can just go f*ck themselves.


GANKER 23rd Apr 2012 03:53

i have been rostered into overtime 4 months running now!
I dont seem to remember this happening last time there was a global weakening. Really does anyone truly believe that article?
G day is a day off pls everyone keep it that way.

Radical Kitty 23rd Apr 2012 04:40

Corporate vision has been realigned.... from running an airline to labour arbitrage !

Hedo Rick 23rd Apr 2012 06:51

Nice cover up CX! Every man and his dog is in OT

Looks like their awesome $10k housing deal really payed off for attracting crew ..

What management side step position are you hoping for Dicky Boy?

Kasompe 23rd Apr 2012 07:08

61% decline in net profits.......yeah, as compared to our ALL TIME RECORD profit of 2010. Why not tell the truth and compare it to the AVERAGE profit over a rolling 10 year period? Oh yeah, cos then you couldn't claim the sky is falling and screw your staff whilst still awarding yourself obscene bonuses, heh JS?
As for Dick Ball, have to snigger every time I see his pompous stroll through the Street.....:D

crwass 24th Apr 2012 15:14

How many are leaving
So how many Capts and FO's are on their way out the door?

Be interesting to hear THIS number?


ASH1111 25th Apr 2012 06:01

Based on the new seniority list since the last one from OCT of 2011, we have lost 6 pilots and gained a net of 83 pilots.

Guys are not leaving, sky is not falling.

The more equally pertinent number though is the amount of block hour increases coinciding with airframe deliveries.

Also keeping in mind, all 83 of those new pilots are SO's, not much needed FO's.

crewsunite 25th Apr 2012 10:23

AC Going Long on CX Shares
Heard only one BFC being parked as CX and AC had a disagreement on it.
Also noticed this report on HKEX today

Hong Kong Exchanges and Clearing Limited

Can those that k now pls explain it relevance.

May seem like AC are trying to sell some of Cx Shares.

Maybe explains one reason why Cx are "Crying wolf on bad times again"

WaldoPepper 26th Apr 2012 06:03

So I guess if they want us to take SLS they'll offer 25 year housing again?

I guess by the amount of people working on G days that they have forgotten that CX have not even come good on their first deal for SLS.

Grinch 27th Apr 2012 02:55

Complete BS
These press releases are meant for upping fuel surcharges etc or getting other breaks -expectation management 101.

N1 Vibes 27th Apr 2012 05:39

On a side note:

At the height of global financial crisis, Cathay Pacific...............initiated no-pay leave for some of its staff
No, no, the management didn't initiate it, we all signed willingly........:mad:

Flaps10 28th Apr 2012 03:58

Surprised no one has mentioned JS's comments in the latest "Friday Telex". I guess I'm the only one who still reads company propaganda. I just can't stop myself...

Is anyone else getting tired of hearing about high oil prices? I believe the price of oil is at or around a new normal point. If anything, the price will continue to rise as the world slowly comes out of recession; a double edge sword for the airline business.

As for parking planes. I guess the pax 400's and BCF's will start to disappear soon leaving only the newer 400F's, ERF's and -8's. Being Hong Kong based on the 747 is going to suck until we all get converted over to the 777 or BUS. I assume the freighters will be continue to be crewed mainly by the based guys? Remember how fast the classics disappeared in 2007/8? A lot faster than originally planned.

SLS? I keep hearing that we are short 300+ pilots. Will we really need Unpaid Leave/SLS or will our short term crewing issues be resolved by reducing our fleet. BTW, how many new aircraft are arriving this year and in 2013?

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