The Low Cost Trap (aka, The Demise of CX)
 

For the past 25 years, CX has been enmeshed in a strategy to reduce cost. Initially it was legitimately focused on efficiency, fleet renewal and expansion. In the past 15 years, the management became overtly tempted by personal greed, and has allowed what was once a justified and necessary program to morph into something that is now putting the very existence of the airline in question. Their strategy is attacking and corroding the very foundations of their company, their staff.

At some point in the early 2000’s, the management shifted their focus inwards, when there came a realization that the generations of treating their employees as valued and according them respect and commensurate remuneration was in fact diverting profits away from their own precious salaries and bonuses. From that realization grew the inevitable self-justifications based on envy and selfishness, that created the framework of the present day strategy, that marginalizes the employee at the expense and benefit of the management and executive ranks.The problem with this is now becoming clearer by the month, and it is no longer possible to deny the realization of the damage done to the employees career expectations, and by extension, the possible ultimate failure of CX herself. The true ‘stakeholders’ in the company, the employees, have been laid waste.

The incessant and frantic drive by management to keep reducing cost is done as a means to an end. There is no accounting of a ‘bigger picture’, one that would equally weight the career expectations and remuneration deserved as a pilot for a ‘major airline’. Through incompetent, greedy and willful acts of malice, CX has now reduced the airline to that of a LCC, but with the expectations that they can convince the public we are still seen as premier carrier. It is now quite apparent that the façade is collapsing, and the soft underbelly of CX is showing, visible through the questionable interiors, substandard food, indifferent service, an unreliable operation, and surly and demotivated staff. With all of those facts in place, the operation becomes more and more established in the eyes of the public as no better than other low cost carriers, but we are now at that service level trying to compete on premium fares. Hence the deterioration of our market share and yield.

In America, the majors are increasing their employees salaries and benefits, knowing that it is imperative that they not only secure their long term loyalty, but reward them in such a way that they become the best brand ambassadors the company could have. CX is again going about that in the exact opposite way, ensuring thousands of disgruntled employees who are going out of their way to talk down the airline, both to the public, but in particular to perspective pilots who were considering applying. At the same time convincing the current pilot workforce that their career aspirations and security of their family’s future are elsewhere.

CX has effectively achieved their goal of becoming an LCC, but they still seem to think that the damage done to reach that goal has no bearing on their lily gilded vision of the airline. In fact, no such airline exists anymore. In its place is a broken, unhappy, chaotic and failing company, which gets worse each day. The fact that management are blind to this is no better represented than their recent attempt to censor their staff through the ‘Social Media Policy’ (how’s that working out for you AT?).

There is no recognition from our management as to the damage they have caused, or the consequences that have already been manifested, and the even more serious ones that are certainly heading our way. Our management are not fit for purpose, having lost the ability to appreciate the intangibles that make up the substance of really great airlines (SW/AS/DL) who respect their employees and the efforts they make, and reward them accordingly. Those airlines have management who are there to serve their employees, and not the other way around. That is the fundamental difference between a great airline and an imposter.

CX was a great premium airline at one time, and now they are a poor LCC. They have lost their soul, their purpose and their vision. They are now losing their employees (and have already lost them in spirit). This current management are incapable of recognizing what is wrong, and because of that are wholly unsuited to fixing her before she fails. We are so very close to that outcome, one that draws nearer every day. A preventable tragedy.

Those whom ignore this advice do so at their own peril.

Well said sir/madam.
This airline is headed for the trash heap of history, the likes of PanAm, Continental, Swissair and many others.

And now we have a situation whereby the pilots do not merely withdraw "Goodwill" but engage in "Active Badwill". Yep the pilots are fully engaged alright. Ton for Tom!

not on my flight deck....maybe thats why they looked so surprised when I did

ADFUS. You have 13 posts. Management, that is the only reason for your comments. Many of us are taking 'safe' fuel. Even more to the point, we know how to burn THOUSANDS OF KILOGRAMS of extra fuel enroute (no directs, levels, deviations etc). Don't doubt that our management will have cost themselves far more than what paying the Captains their fair share would have cost. But you go ahead and keep pretending that everything is 'normal'.

STP. Well, that's MY opinion. Valid under your thesis.

Cathay's niche position is over. Now there are the ME 3 for long haul hub connections, low cost for regional, and Chinese airlines which are passable and cheaper. Foreign airlines now fly directly to Chinese cities rather than using HKG/CX as their gateway. Add in the sky high operating cost of a HKG base and you have a perfect storm.

Those who joined in the 1980s on the A scale had the best days.

Massive wisdom in here! However, if the costs of a HK base are sky high, why doesn’t CX open and utilize more employees and pilots off bases? Seems to me this is only logical as the administration for pilot bases is already established in 5 regions outside HK.

Please replace the word management with the word SWIRE, any decent manager in any and all departments in Cathay reaches a cement ceiling where any valid concerns or suggestions stop! Cathay made huge profits in spite of itself for years giving Swire the inflated ego that it knows what it's doing, unfortunately CX does have to compete now and Swire hasn't got a clue how to fix it thus cut cut cut is the answer and as we all know that doesn't work.

It’s a bit like running a restaurant , in the 1980’s it was full every night and the money just kept pouring in , then Monday night is no longer full due to competition , soon that becomes Tue and Wed as well . So management, too arrogant and set in their ways to change set about fixing the problem . They cut portion sizes , the quality of the meat and increase their prices . It works for a week or two , then the patrons start to drift away . So management decides that the answer to all of this is to cut staff wages . So now you have a chef who is delighted to turn out sub par dishes , waiters and waitresses who are no longer interested in the survivability of the company and it shows in their surly attitude towards the diners .
Well it’s not long before the restaurant is mostly empty every night of the week , but still has to pay overheads electricity rent etc .
It’s not long before the restaurant is nothing more than a fond memory

Yep - also the trouble is that since the 1980's others have worked out that what people want most of the time is simple fast food, that can be cooked and served by teenagers. Sure - there is a market for fine dining restaurants, but Pret a Manger/ Maccy Ds are the majority.

Fast food outlets know exactly what their target market is. CX have absolutely no idea. I have not seen a word from them about what exactly the product is that they are attempting to produce. They (I assume) probably think CX is a market leader providing a quality product. The reality is far from it...

Mill Worker. Quite.

What I find fascinating is the fact that CX management have managed to convert THOUSANDS of once loyal and dedicated employees into employees who actively seek to punish the airline at every turn. THAT takes a certain kind of stupid. It has descended to such a level now that there is probably NO hope of turning it around. Not only are most of us looking to cost the airline every possible cent that we can (and why shouldn't we, the company refuses to share any of the profit of our efforts), but most are actively looking for new employers, and imploring anyone who will listen to not ruin their careers, families and futures by getting trapped in the CX web of misery by joining. A truly epic accomplishment by the most incompetent and tone deaf management group in aviation history. What a tragic tale.

The reality is that in the 80's and 90's the Chinese Airlines had a terrible safety reputation and Cathay Pacific and Dragonair thrived with essentially zero competition to the mainland. Then it all changed in 1997 when Hong Kong became a SAR of China. The one country, two systems has been steadily diluted over the 20 years, and the Chinese airlines are no longer crashing airliners these days. Hong Kong is simply a small city and is no longer as important in the eyes of the Mainland. Sadly, wonderful airlines such as Cathay/Dragon will dwindle into nothingness or as directed by the Mainland - and there is nothing anyone can do about this. Burning extra fuel or any type of industrial action in the hopes that Swire will one day see the light is nothing short of sad and misguided. Revel in the memories of what the airline was once if you must, but it's time to either move on or begin to enjoy the what precious time you left with the airline and life in Hong Kong.

Ah! Yes, but the big difference is that had we been fairly treated when this airline was raking in billions of dollars , I can guarantee you that every pilot and cabin crew member would be busting their collective asses to get CX through this . The predicament that this airline finds itself in is totally management made . I’m not even sure that if they came to the table ,the level of indifference could ever be erased .its a sad state of affairs but human nature is what it is . CX could easily afford to hire an expert on Human Resources , but they wouldn’t do anything with the report
So as Mole stated they have subjugated and repressed the entire workforce , so much so that being vindictive and costing them money actually feels very cathartic

Oriental flyer you have missed CEA's point entirely. You continue to fight with Swire over who did this & who did that. It wouldn't matter what Swire did or didn't do, HK & CX's fate was sealed in 1997- the need for HK as a high standard gateway to the PRC has dwindled since then. CX pilots delay in recognising this fact doesn't change it. Fighting with their staff has been a distraction.

When you have tied your career hopes to an airline, and invested years in the belief that your efforts meant something of substance, and THEN find out that all your years, hopes and efforts are counted as worthless: yes, you are left with a burning desire to HURT (and hurt badly) the people who have rendered your efforts worthless. I will happily burn this outfit to the ground.

X 3000 + pilots