Original Post
 

I was a tad out on the Cargo Price Fixing fines, sorry bout that.
Following a bit more research, CX has paid approximately 1 BILLION HK in
fines re cargo price fixing fines/collusion over the past 10 years (thats "Criminal Conspiracy" or such type laws) to Canada, USA, NZ and AUS.
There was also a massive EU case that has been dropped.
And then there was all the Managers that were fired for these "mistakes", or was there ??
Biggest piss off, I, and most of the company, have to write anti bribery and competition "refresher" annually. :ugh:

Ok, agree with all of the above. Will this notice likely increase or decrease our ability to improve on the last offer?

I'll summarize...

The fuel gambling has not only lost billions of HKDs, it has put CX at a massive competitive disadvantage against the competition which is fueled by mainland windfalls and low cost carrier models. The competitors smell blood in the water.

CX has unwisely decided to trim the edges around the inflight product which makes a once superior service less attractive. Nobody pays a premium for average. So load factor and yield both go down while costs (due to fuel gambling) remain high. Couple this with the industry changing impact the 787 has on long haul markets, and it is little wonder CX is struggling.

People are bypassing big hubs like HK because they are simply inconvenient and risky for delays. For example, Xiamen Airways flies ZGSZ - KSEA with a 787. Why would anyone in their right mind pay a premium to go through YVR or SFO to end up in HK? China Southern is taking 777-300ERs and just announced a big order for 787-9s. Those will fly out of ZGGG. This is occurring all around Asia as carriers can fill 787s and operate them direct to Western cities. Even US carriers are getting in on the action and operating 787 to new destinations previously served only via connections. Will CX's A350s answer this challenge or will they simply be used to reduce seats on routes where market share has already been lost?

Meanwhile, CargoLux is aggressively pursuing CX's Pacific routes from HK and taking aircraft CX loses off lease. Belly cargo yield is down as new services offer a glut of space and direct routing. What is the CX response? Piss off all the hard working and once loyal employees! There is an original and creative remedy.

I seriously wonder if anyone on the 9th floor has the first clue what the hell they are doing. Swires, where are you? Your cash cow is being gored while Chinese Nero (Ivan) fiddles. He is rebranding, as if the paint schemes and logos at CX/KA are the problem. Not even close Ivan the Invisible. Save some face Chu! Step down while there is still an airline for someone else to save, somebody who has the skill and know how to get the job done.

I didn't think that the 787 would be such a game changer, I always thought the 77w was the game changer. Doesn't the A350 sit somewhere between the 787 and 77W?

The management spend all their time fighting with the employees, of course they have no time to actually manage the airline.

1. Make a list of all the qualities that should be evident in a good CEO.
2. Make a list of all the qualities required to gain promotion in the CPG.
3. Compare lists.

Ivan and the Big BioFuel investment. Give me a break from the constant stream of Liberal BS.
I think he/they (the board +AT) need to talk to someone who has a simple understanding of physics and chemistry (high school level is all that's needed)
1. When you burn a hydrocarbon to release its energy - you get pollutants Co, Co2 ++
2. To move an aircraft through the air at XX speed you need to burn XXX amount of calories (Kj etc.) worth of "hydrocarbons" to get the energy to move it at that speed - period. It makes ZERO difference whether those calories come from conventional oil or bio-oil. The same amount will be burned producing the same amount of Co, Co2 ++.
So Ivan, please explain just where this investment is:
- "Green"
- Helps the "bottom line"
Airplanes burn fuel for energy, period. Burning fuel results in environmental contaminants. period...
Approximately 40% of ALL the revenue this company makes goes toward buying and burning hydrocarbons to make a profit that goes mostly to 2 shareholders. VERY EXPENSIVE hydrocarbons thanks to the excellent CX Fuel Hedging Strategy...

See "Peter Principle" above

Hey Ivan, how about making an investment in your people for a change? :ugh:

Late to the party.

Flex88: "...the list could go on, please add."

Try this:
- Introducing PEY and then removing some/all on 330. Having seen the "business case" (aka sycophants homework) for both...identical with the desired outcome being the only difference.
- Re-pitching PEY on 330/777 due customer complaints.
- Introducing new regional JCL... and then removing half of it on 777 because they weren't being filled.
- Re-using long haul EY seats to the regional fleet: seats already well past their sell by date.

CEO on fuel hedging
"We deliberately never hedge 100% of our fuel requirements so we benefit from lower oil prices on the share of our fuel requirements that have remained unhedged"

No s$&t Sherlock. This is like saying "We never bungy-jump without a piece of elastic tied to our ankles". No-one hedges 100% dummy.

The statement is an insult to the intelligence of staff and shareholders alike. Time to put some clothes on Emporer and admit the level of hedging was the single most catastrophic decision in the history of Cathay Pacific Airways.

The CEO of this once proud airline has no place at the top table other than setting out the pencils and notebooks for the sycophants around him.

Think of the A359 as a more fuel efficient B772

ditto for the A35K and B77W

The irrational part of their message is that they expect everyone ELSE to take the medicine, but they won't.
They STILL have their hands deep in company's wallet, awarding themselves obscene bonuses and whooping it up while throwing crumbs to great unwashed.
They dare to plead for "help" from the very employees they have relentlessly attacked and vilified for the past 21 years? Really?
They can start by accepting responsibility, voluntarily forgoing THEIR bonuses, cutting THEIR salaries and fixing the mess THEY got this once great airline into.
And, Ivan the incompetent, resign.
To paraphrase Lloyd Bentsen: Ivan, I know CEO's. CEO's are my friends. You're no CEO.

This is why customers are no longer finding value in CX's prices. It is it exactly--so when they launch affordable fares and you don't receive full mileage credit; there is literally no point to consider CX above anyone else anymore. It's not at the tipping point yet, but now Virgin to London, AA to LAX, make sense over CX.

Less revenue coming in, controlled costs (but very costly), it's a tough spot. They need to take a US$1b charge or so and write off the oil gamble so they can move on. SWIRE will need to swallow a poop sandwich at least for 2017, but at least everyone can move on. This piecemeal stuff will only prolong the problem and may never actually reach a point where it is totally fixed.

Anotherday......are you for real?

Go and do the sums for the fuel hedging over the last 10 years. We made little bits here and there and then made a huge hedging loss around 2008. Instead of learning from that disaster they managed to create the latest catastrophe.

The problem CX has now is that it thinks it can "LEAN" it's way out of this mess. Unfortunately the product is already skin and bones. It needs some money spent on it, not the other way around!

It's typical of the region. The managers know the cost of everything but the value of nothing.

This sounds a bit like our old friend "The Management" but, they do not care what you think. 'They' can make the most catastrophic mistakes ( ie fuel hedging) and survive intact. Unless you can organise a buyout, then you do as you're told and watch 'them' make a fortune whilst ( nowadays) - you don't. Simple really.
I've gone but we old timers sure had the best of it.

No amount of saving will be able to offset the fuel hedge loss!
We have 2 more years of this hedge to play through.

Doing a uncovered hedge (naked hedge) is unbelievable. Doing it twice in 2008 and 2012 is criminal!!!

Lemme ask you this. Can you believe anything they say to be true ? Do you believe the hedge is a real loss or some form of financial scheme or scam ? Does anyone really have any idea how money moves around in these here parts? Ask yourself these questions.

And as such then why get wrapped up over it. It doesn't change our position. Or anyone's actions on the working level. Stand firm, do what you always do, do what you need to do to keep your personal life on track, do not make any form of concessions for anything, take the days off you need, operate safely the way you always have.

But I would have an exit strategy just in case--nothing more than anyone else would under normal ops in the event of downturn.

In other words turn the radio down, do what you enjoy in life, don't break your back working too hard or jumping into crazy schemes to save money, and be 😁.

From 2003-2014 we appear to have made about $4billion in Hedging. In the same period we spent $325billion in buying fuel. So total hedging profit equates to about 1% of the total fuel bill.

For the period 2011-2014(incl) hedging profits ranged from -2.2% to +4.6% of fuel purchased.

In 2015 the actualised hedging loss was 34.6% of the gross fuel cost.

First half of 2016 the actualised hedging loss was 51.2% of the gross fuel cost.


It's pretty clear they changed their hedging SOPs a couple of years ago and it is not working well!

"why get wrapped up over it"
Really Shep? "Don't take any form of Concessions"; A scale, B scale C scale D scale, crap staff travel (wrapped up as "enhancements"), forced overtime, no holidays, and now DEFO's with near zero housing.. Sorry Shep, these are all "concessions" that have been rammed down everyones throats - and we shouldn't get "wrapped up in it"? I don't get that !
We are suffering from poor management at every level in CX. In Flt Ops it starts at the XXX-M level gets worse as you (with seniority) get promoted to the M-XXX level and marches on to the GM-XXX level right to the very top of the company.
Re-read the "Peter Principle" article at the beginning of this thread and then contemplate the Flt Ops Managers now or in the past and then the Swire managers!
In todays SCMP, a very good and very relevant article along the same lines.
Corporate geniuses often make the daftest mistakes ? but remember greed can have a stronger sway than rationality | South China Morning Post

Especially, the best is in the last two paragraphs:

Stupidity is such a major issue in corporate life, that two business professors, Andre Spicer and Mats Alvesson, have dedicated their careers to its study. They have interviewed thousands of high-skilled executives on the cutting edge of the modern knowledge economy, in fields ranging from technology to banking to pharmaceuticals.

“During the course of our research, we were constantly struck by how these organisations, which employ so many people with high IQs and impressive qualifications, could do so many stupid things,” the authors write in a promotion of a recently published book on their research findings.

PRD airline making a loss? Fares too high, and loads too low? Not enough pilots because t&cs deteriorating? Difficulty finding pilots for the roster? Sounds like another (much smaller) PRD airline owned by Air China...

The next thing will be carrying 2 hours extra fuel on a gin clear day.

Hundreds of US Based Cabin Crew
 

From todays SCMP article:
"face the loss of government retirement payouts and post-retirement health care insurance protection"
While this may be slightly off topic, you can still see how this relates to the original thread "Msg from CEO"
CX was very fast with the "this is not about the money" response was it not; however they plan to save 1 Mill US p/a.... (just a coincidence)
400 CX employees may now have problems with their retirement and retirement medical plans due to a "MISTAKE".
Which CX (Swire) Director was in charge? Was it the Geologist or perhaps the Philosopher?? Ohhh Well, no big deal, only affects 400. Win some lose some, right.

Like I mentioned in the opening post "The Peter Principle" comes home to roost BIG TIME...:sad::sad:

Director "People"
 

Re the above post plus all the ongoing lawsuits in HK and in other jurisdictions regarding pay/tax or benefit compliance/labor law etc., give your opinion; just when do you think we will "EVER" see a Director People :yuk: that has an
actual Masters degree ( or above) in "Human Resources" from an accredited university (i.e. not the CX eLearning garbage or the CX?Swire "management" school they have started in HK.

20,000 +++ employees and the Director "People" has degree in Geography, makes perfect sense yes; with that degree he should at least easily be able to identify the geographic location of all the countries where they are being sued for "personnel" issues. :D

It's all just a magnificent joke :ugh::ugh:

Flex, methinks this will play out poorly unless there is some vehicle to make up for it in terms of coverage and benefits. But it does show the shallowness of depth of the decision makers that it even became an issue or publicized.

In a US venue with US based employees you cannot leave employees without IOD protection of some sort nor can you easily reverse tax/FICA decisions without consequence -- unless you provide some form of self-insurance and retirement equal to or above those lost. The US is the most litigious place on the planet with agencies that follow the maze of complex laws different ways for different people on different days -- the IRS being the most ruthless of them all.

If the F/As are happy with the action (perhaps by some form of internal coverage and pension contributions/scheme) it is possible little will come if it. But they've still flagged themselves with regulatory agencies who can cause great difficulty which is something I would not do.

If the F/As are unhappy with the decision there are huge vehicles for recourse which could make the hedging loss look like more of a speed bump.

Sorry shep69 but the 'company' deliberately do not incorporate in the usa for this reason. They operate on a 'letter of qualification' as a foreign employer and as such can screw even US citizens out of even the most basic benefits afforded real onshore employees. US based crews remain employees of the 'company' in hk which begs the question "where are their hk work permits and benefits"? The fact that the company chose to cancel benefits already paid for by staff a few months short of the 10 year qualifying period for a lot of them surely tells you something about this employer's character. They certainly jerked the rug on them when they could have flown the last 10 years for a company with a conscience.
The whole setup is fragile and smacks of paris.
Incidentally I see the EU have got together to stop asshole companies doing just this to their minions.

Company has an operation in the US employing US nationals on US soil. While absent a collective unit in the US some industrial matters might not be easily addressed there, statutory matters most certainly do fall under the jurisdiction of the US. There are some exemptions for foreign carriers, but what one law giveth another taketh away. It is hard to reverse position on something you say applies one minute and not the next. Especially if you also have some intrastate operations and duty occurring (I.e the company operation is mostly international with respect to its flights and duties but not exclusively so).

I would have just let it ride were I them and not rocked the boat.

Uh... CR, I'm not sure you understand how it works in the US. It "ain't" Hong Kong. You break the CBA in the US and the ****e hits the fan in a SBA and at the NMB. Fly in the face of the NMB and CX might find itself fined, sued, and/or disallowed from flying to the US.

The cabin crew don't have a CBA because they foolishly decided not to unionize and pursue one. It seems that might change soon if I had to guess. No doubt AFA would encourage the CX cabin crew to join them and get out of the shadows. That said, Shep is correct. These cabin crew could hurt CX very badly if they chose to enforce the laws available to them in California. Whether they know this or not is unknown, but you'd have to think they'll figure it out eventually.

Apparently the understanding isn't too deep,
Rod. The US is not only the land of litigation and fines, but the super joker of closing a base to dodge contractural obligations and legal action won't work -- not only can assets be attached and seized (and this is routinely done to lawbreakers of all sorts in the US) but also I suspect even CX would think twice about closing anything when it meant that it could no longer operate in US airports and airspace at all.

Corrupt and on expense accounts?
 

The deals on other airlines from Hong Kong to Europe seem so much better than the fares offered by CX. Why would anyone choose CX?

This is a sobering reminder that anyone who trusts the precious years of their working life to this company risks holding nothing but ruin later in life. Wake up to the fact that you are putting you and your families futures at risk if you get entangled in the CX spiderweb. Get out while you can.

Curtain rod, there is no "little US pilot basing company." All the pilots and cabin crew based in the US are employed by Cathay Pacific Airways, Ltd, not USAB.

When they shut the Paris base down. We did nothing. It's not my base who cares. When they cheated the US based cabin crew out of a benefit. We did nothing. I am not a cabin crew member. Who cares. When they close the US bases. We did nothing. Who cares about Americans. They deserve it. Arrogant knowit all folks who can't use proper rt.
When they came for us. No one was left.
Sad state CX finds itself in.

I suspect the fallout from this incident will be rather more than CX is planning on. Once the shock wears off, and the implications sink in....there will almost certainly be a case of "hell hath no fury......". Once again, CX has managed to place the needs and concerns of their staff in the waste basket. Such a "caring company". Of course, the management bonuses will reflect the millions saved. That thought should help the US cabin crew sleep better at night. Interesting days ahead....

An Update on Business Challenges (02 Oct)
 

Attachment 1188

Check the above attachment then don't forget - review the following link:

https://en.wikipedia.org/wiki/Peter_principle

Jim Collins, From Good to Great

Talking of CEO's

"They are somewhat self-effacing individuals who deflect adulation, yet who have an almost stoic resolve to do absolutely whatever it takes to make the company great, channeling their ego needs away from themselves and into the larger goal of building a great company. It's not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious—but their ambition is first and foremost for the institution and its greatness, not for themselves."

Modern Corporates in all hemispheres are rarely led by such individuals...

It is most certainly the same in Australia..:ugh:

Bye Bye Ivan !
You will be gone very soon, thanks for nothing.
Hello new guy ! You will be just as bad as Ivan probably worse !

Ah Chu! I feel a cold spell coming on.