Preparing for the inevitable
 

The tone of the Friday update from IC seems to be prepping us for some serious fixes I would say. What that means is anyone's guess but I do not think it will be good. I bet they park some more aircraft and that we will be down to just 10 747-8Fs. The cargo system will be cut and maybe some freighters will wind up at AHK. Any freight growth in the future will be at AHK.

There are some serious issues in China and the world economy so it's not a surprise nor is it a lie. It happens every 8-10 years and the last one was in 2008. I see SLS coming again. This will solve the crewing problem. Let's just hope we don't lose too too much in negotiations.

Here are some articles I found if anyone is interested.
IMF issues warning on global growth as China exports plunge - FT.com

The coming debt bust | The Economist

China?s Debt Bomb - Bloomberg QuickTake

How Bad Is China's Debt Problem, Really? - Bloomberg View

So within 2 days we get told thanks for being us and moving millions of people, 65000 a day, with a load factor of 85%, and then get told the sky is falling in.

Maybe someone just sat down with a bunch of crayons, some butchers' paper and an abacus and explained to Ivan that making a huge loss on a bad fuel bet is actually not good for business......

Next step they can sack all the "non operationally" critical muppets holding up thank you signs in a you tube video.

Inevitable
 

Is this new ATC system being a failure and CX trying to blame the pilots, has CX even mentioned the 10% reduction required and how they plan to implement it.

Perhaps the aircrew should get a bonus for going into contact compliance and helping the company prepare, because clearly no one is driving this ship :ugh:

TV you seem to have missed the bit that said "Network expansion will remain key to our future prospects." The company can do many things to piss off the pilots but none of them help to solve their main problem.

There's an easy cure for this:
For the last 20+ years CX pilots have been working within agreed rostering practices (common practice in first world airlines). Last June FOPs management imposed new ones as they failed to renegotiate. This is the only reason we are in CC with a training ban in place but if they renegotiate in good faith then normal service will be resumed.
N.B. This will require both give AND take on both sides!

You're misunderstanding me Curtain, we start again from where we were before the theft. Three man ops isn't free!

Holy crap Visionary, aren't you a bundle of joy- maybe time you headed down to Wanchai for a few hours to get a smile back on your dial.

Visionary is obviously a management individual. That explains his increasingly frantic and hysterical rhetoric. We just need to recognise it as such, and more importantly, understand that this sort of pathetic propoganda is firm evidence of panic and disarray on the side of management. The more posts from this cretin, the more you can be certain that they are terrified of the coming collapse. Stay firm and remain committed to CC. Remember: " I am a loyal employee and am committed to doing my job to the LETTER of my contract". End of.

If you believe anything that comes out of the propaganda machines (or the occasional sad "I just lost my dog" photos that we get from time to time from various people) before they actually happen, once again I have plenty of clear titles to various bridges I'd be happy to sell you.

As far as the rest, the economic storm and zombie apocalypse has been advertised as just around the corner for decades. Never seems to happen--at least when everyone thinks it will. And when SOMETHING does happen, it always comes from left field and is missed by all the 'experts.'

I'd probably wait for a few of the actual undead to show up before I start making plans for heading off to the bunker. Better to simply enjoy the day and leave the day after tomorrow for someone else to worry about.

Now if you are sacrificing the good things in life--including time spent with loved ones--to 'get ahead' or 'go the extra mile' at work, I WOULD suggest an adjustment in your priorities might well be in order. You don't get back any of the time you waste in your life.

And if aviation IS your passion, you might be in the wrong place and might want to have a look at a few other options. At least for the time being. Hopefully this can change, but I'm personally not going to hold my breath.

SLS ?!!? Now THAT's gotta be a wind up. I don't see how even the most die-hard entrenched charm school graduate manager could say THAT with a straight face after the past few years.

I am not in management.
We have had two periods of economic slowdown with SLS in this decade already.
They will, as they have in the past, do whatever they need to or have to do.
The "thank you, but it's coming " should be sounding some alarm bells.
I am simply saying we should be prepared is all.

Air Profit-Wow! What's with all the hostility and anger man. Calling people names and downright animosity. It's sad really.

Isn't it a bit ironic that we complain about being fatigued and rostering and someone brings up possible time off and gets hit over the head for it. I think everyone should take some time off as it appears we are all pretty stressed out.

"They will... do whatever they need to, or have to do."

If they had wanted, the crewing problem could have been sorted more than a year ago. All it would have taken is to actually engage, move their mindset out of the 18th century and work on solving the real problem.

Oh, you meant they will do whatever they need to do to maintain "order in the empire". Yes, I guess that's the truth. At least Nero could hold a tune as he fiddled.

There are 8.5 billion reasons why no employees at CX should take any SLS scheme. The only people that should take SLS are the managers that got this airline in the sad shape it's in now. Perhaps they should start with the hedgehog.

SLS...hahaha. They burned me the last time, so why would they think i'll sign again? Not happening in this lifetime.

The company's saying things are tough. 85% load factors mean nothing if the yields aren't there. The company knows this, the analysts know this, the market knows this.
But the pilots can't figure it out.
Some think the company is making billions and hiding it all away in a big shed out in Kowloon Tong. And yet there is a degree of transparency required of the market to keep investors happy. That's why a company will provide profit warnings, so the market is never surprised where a company financials are at.
Does any of this make any sense?
Share price is down at $12 because of all this and other factors including our contract compliance. If the share price drops low enough and we get taken over by the likes of Air China then crying to mummy about 3 man LHR will be the least of your worries.

Which is why I'm guessing the company is under enormous pressure to sort things. And historically (the last 50 yrs anyway) they sort things as they see fit.

Well, if it wasn't for all the years of bulsh*t excuses to strip profits away from the employees, I might cry some crocodile tears. When I read that the directors have awarded themselves almost 20 - 30% increases in annual pay and bonuses, needless to say their 'concerns' can be put where the sun doesn't shine. Funny how this happens just as negotiations begin. Oh, and Billy the Kid, you hit the nail on the head.

Anotherday, some Chinese airlines, including Air China, are paying good money for experienced pilots, including tax paid, and are offering basings. A pragmatic Mainland management might actually be an improvement on the current 'shower'.

Anotherday,

I want some of the drugs you are on. If AC or any other mainland carrier wanted to takeover CX, they would have done so already. It's the Swires who are driving this ship onto the rocks, no one else... Not the pilots, the market, the ME3. Nope, CX can hang this failure right at 59 Buckingham Gate.

Anotherday,

You can see the yields yourself on the intracx homepage. Nothing much has changed.

"Share price is down at $12 because of all this and other factors including our contract compliance."

From their own financial briefings the yield reduction was based upon 3 factors, Lower fuel surcharge, Overcapacity in a weak market, Unfavorable foreign currency movements. The company actually expanded capacity on the passenger side by 5.9% and on the cargo side by 5.4%, however costs only increased 2.3%.

The gross fuel cost was $24,494, the hedging loss was $8,474 million, net fuel cost $32,968 million. So as you can see CX paid 35% more for their fuel due to the hedging loss while at the same time fuel surcharges decreased. That has significant pressure on yields as fuel is around 60% of the total cost of a long haul flight.

In terms of foreign currency, the yields were hit by a 16.10% reduction in the CAD, 10.96% in the AUD, 10.26% in the EUR, 5.45% in the GBP, and 4.4% in the RMB, 4.23% in the INR, 3.73% in the TWD, and 0.4% in the JPY. That represents 41% of the revenue mix was hit by a unfavorable currency movements.

The plus side is the reduction in the EUR will make some of the A350 costs lower going forward. On the minus side the devaluation in the RMB decreased the value of the 20.13% interest in Air China.

The group profit margin over the last 12 years on average was 5.5%, last year was an above average year at 5.9%.

CX hasn't issued a profit warning.

Mis-management on their part does not constitue cost-cutting on my part. If the management "team" continues to make mistakes in their job, then let THEM pay for it not the employees.

Greendragon,

Haha free business class travel, that's a good one. It's cheaper buying full fare tickets on our competitors than using our ID90 (economy that is).

Education allowance is good, as long as you have a spare $200-$500k spare of your own money for the debenture at most intl schools.

If the evil gweilo is able to afford a home for his family and send his kids to a decent school then they must be overpaid.

Pretty sure most expats would accept 2-3 weeks leave and the loss of expat benefits in a heartbeat if they could take a base too. Of course they need to make it worth people's while to come to this s### hole, why else would you live here?

Unfortunately I have to agree with green dragon.
Most CX pilots (at least the ones who scream the loudest) never actually worked for a real airline besides CX. They flew in the military or some outback outfit.
Time for a reality check, don't you think?

CX pilots will never leave CX no matter how bad they claimed they were treated badly by the company. I bet my money on the company this time.

I have to disagree, yes there are various backgrounds at cx.... For someone who has worked with pervious airlines cx is not all great and glory, yes maybe 20 years ago but there is no free travel, i spend 20 percent of my salaary just for a trip home is business. Housing; mediocre at best, living in a 500sqft box, couldnt do it with a family no way.....

Most of the guys either have wives working a job or are single. No way in heck could i have a family on the cx current pay. And yes those with db boats got them long ago; the list is years just to get a dock.

As usual, the reality is far different than the myth. Most CX pilots are struggling just to raise a family and pay the bills. There is NO exceptional benefit to being in HK or working for this airline. A position with a legitimate carrier in ones home country is certainly a better future. Well done CX management.

The management trolls are busy in this thread!

What a load of utter bollox, ikemankk2001!
They are leaving, and in ever increasing numbers! Check the last five years of seniority lists if you are in doubt. CX is "loosing" approximately TWICE as many pilots as their own retirement figures state. For an airline which traditionally never had to worry about training costs, to have fully qualified and experienced pilots (and checkers) walking out the door well before retirement age is an unmitigated disaster. And not a damned thing is being done to retain these valuable-beyond-belief people.

Well, when you are SHORT over 300, 50 doesn't exactly help matters does it? I would say that is just the start. Mate trains, just did so for a RAF fellow, who already has a date with BA, just not mentioning it to CX yet. There are probably 100-200 actively looking for other employment. With the continuing surge of hiring worldwide, that will start to suck up that available CX pool of pilots pretty quickly. Sit back, keep doing your 'job' (cc) and get the popcorn ready.

It is when you expected to lose 19. And half of those 50 were FOs and SO leaving for other airlines. Can we afford to become a training airline?



Other employers - world wide, not just airlines - are bending over backwards with part-time work and other tricks to keep their people from leaving, while Cathay (almost actively) encourages guys to depart.

"I need/want 2 months unpaid leave, please"
"Sorry, cannot"
"Okay, here is my resignation letter, bye!"

A friend of my wife's works as a rostering manager in our local hospital. She reckons there are fewer than 10 full-time nurses (out of about 300). The rest all work 0.8, 0.6, 0.4 shifts. They need more, but can't get them, so they offer work sharing in order to keep the ones they have.

4wire,

Don't be silly. Part time and flexible work schedules are 21st century concepts. CX is at least two centuries back.

A little birdie told me that the post 31 May COS removed the discretion to turn down training, 8929 on steroids, in return for 10% pay rise and substantially increased HKPA. RA65 also offered to all but at a cost.

but we get to keep the really crappy staff travel, crew meals, rostering, hotels, profit share, Quality health.... what have I left out?

Nice one iPad... sounds like numpty management desperately casting round for ideas to get themselves out of the hole they are continuing to dig...

Also hearing a similar tune that AT has finally caved on everything but rostering. Well see how the meetings go.

It has always amazed me that high-falutin' university bizness grads never learned the childhood lesson of what happens when you push on a water balloon. When you push, something else pops up somewhere else. And if you push everywhere too hard at once it breaks (and now you gotta go get another balloon and fill it up with the water going everywhere).

Or that carrots usually work better than sticks for creatures with an IQ over 10. Especially if the creature isn't really afraid, has kinda gotten used to the stick, and really doesn't care anymore. Even with lesser critters. If you keep beating the cat over silly stuff it runs and hides where you can't get to it once you walk into the room (and if you try too hard to drag it out you get scratched, bitten and furry). But if you bring out the food, even the click of the can opening can get it where you want it.

Things go much better when people WANT to go the extra mile to help out and WANT to help the team succeed. This is a two way street.

There is a great deal of sad truth in this statement. Once I saw senior captains adopting this attitude, I knew there was a serious problem. CX managers pushed too far and do not have SARS to save them. Making threats about deadlines certainly wasn't the way to go.

Here's the funny thing about 'threats': The real danger is to the one issuing it. For me, all it did was stiffen my resolve to commit even further and stronger to CC. When the date comes, what can CX do? If they do something 'draconian', then they have effectively destroyed what little good will and co-operation that was still possible. Even more of us will make plans to leave. Certainly none of us will give two pennies worth of care to anything further that they say or want. They issued the date with the implied threat, not me. I will simply react to whatever it is they want to do. The real risk is to what little ability they have remaining to manage a sustainable operation. Try the 'stick', and you will see a seething rebellion the likes of which they will be discussing at business schools for decades to come. None of us really care any more. I've been threatened, abused and treated with contempt for 20 years. I find it comical that they think the way out of this mess is with yet another threat. Brilliant managers, every one of them. :hmm:

Willie the Wimp
 

You are correct - 50 is not a big number. But 50 out of 3000 pilots means over 1.5% less flying was possible(since all crews are either hour limited or days off limited) - and 1.5% of $100Billion is $1.5Billion.

We still have the same planes - just flying them 1.5% less - so 1.5% less revenue. Fixed costs remain the same - variable costs amount to about 40% - so that means losing those 50 extra pilots cost the airline a billion in 'opportunity cost'. That is actually lost revenue minus reduced variable costs. Unfortunately we can only reduce the variable costs by the marginal(spot) price of fuel not the hedged rate as the hedged stuff gets used first.

Now if the training machine is running at max chat - and let's just pretend it is for say 2-3 years - that is 2-3 years in a row that losing that 50 pilots CANNOT be recovered. So now we are up to $2.7Billion in cost(3 years).

If we lose 50 extra every year for 3 years - well, you can see the costs mounting up. For the year 2 loss of 50 pilots add another $1.8B, for year 3 add 0.9B. So for just that 3 years, a loss of $5.4B - for 'only' 50 extra pilots leaving per year!


So I guess we are like a fleet of a hundred spare Spitfires during the battle of Britain only missing 1.5% of their parts - just 100 propellers! Apart from that, they are good to go. Accountants see a 98.5% equipped fleet of fighters - the real world sees 100 grounded aircraft!

NC. Take a step back. Does your simplistic maths really make sense?

iPad. Simplistic (or not) it does.