HK$ 4.8 Billion profit resulting from Time to Win strategy
 

Then his lordship Sir Hogg woke up from his dream, reality bites , so tries to remember his lines for the 11am media , fake news, yawn fest.
“huge competition from China and middle east” , “ excessive pay structure for our pilots”, “
Massive inefficiency of zero domestic flights” “ a weak US dollar” , “ Brexit!”

Shhh , lets not mention our bonuses and stock options .

As I mentioned yesterday, it's over. CX has now been crippled by probably the worst and most discredited management in the industry. Sadly, the only ones who will truly suffer are the employees of the airline. It is now firmly established on it's slide to oblivion. The senior management have their Swire parachutes, so they will be blind and deaf to the destruction they have caused. Here is one line from the headline article in the SCMP:

"....The airline is also among the few marquee Asia-Pacific carriers not to operate a budget airline, which has hampered its efforts to compete more effectively..."

Again, another management failure. One they arrogantly dismissed years ago, meanwhile ceding the slots, revenues and market share to our now well entrenched competitors. If it was an in-house airline, the revenues and profits would have flowed through. Instead, every dollar spent on LCC is going to another group of owners, and THEIR employees. Well done RH and co, another splendid own-goal.

This airline is a dead man walking. It is probably not recoverable, as any action our management takes will only make things worse. They have lost the minds and souls of their employees, and now are losing them literally as well. If you have any viable option, take it. To risk staying at CX will surely result in disaster for your careers and families. Wake up to the reality of what this sad and pathetic company has become. There is no hope left. Get out while you can.

A further thought. When you hear the inevitable 'blame' from RH later in the day that will strongly focus on the pilots, remember this: most other major airlines around the world are raking in record profits, and that with much higher cost structures than ours. This airline has been crippled by incompetent management. That is all you need to know, and sadly, the lunatics are still in charge of the asylum. On average, our "per pilot" cost is lower than nearly all the major airlines. In fact, the average cost of a pilot is now less than half what it was 25 years ago in inflation adjusted terms. CX management have destroyed this airline through incompetence, arrogance and willful disregard for all the efficiencies staring them in the face (basings, proper implementation of CMP, etc). They have now pushed this airline to the point that it probably can't be recovered. The pilots are leaving to salvage careers at carriers that have a modicum of sane management, and proper working conditions. The competition in HK smell blood and will turn the screws. The Govt and people of HK no longer respect or care about CX. On every level CX is wounded and dying. Don't let you or your families die with it. There is no happy ending here.

Expecting a HUGE operating profit generated by the excellent effort of the staff, only to be dragged down by a HUGE fuel hedging loss generated by the Management of the airline.

http://i67.tinypic.com/2nk4ax3.jpg

http://i66.tinypic.com/mkhs38.jpg

CX would of been profitable if it wasn't for the incompetent managers who messed up the fuel hedging. That's the only thing that matters.

Strategy "A" :

1) Fire the entire managment
2) Expand bases asap
3) Let the pilots control the rostering

Oh, wait....just woke up...crazy dreams i was having....

Past losses

In 2008 it was a 'mark to market' loss of 8billion. The majority of that loss was for future years. So if the fuel price had stayed the same from that point on (31/12/08) then yes CX would have lost a cumulative $8 billion but because of Accounting standards that stood at the time, the loss was 'recognised' in the 2008 accounts.

In actual fact we lost $309 MILLION in realised hedge losses in 2008. Not $8 Billion.

In 2009 we made a hedging GAIN of $740million and an unrealised hedging gain of over $2billion.


So the point of difference is here is this....

2008 $309million loss for the group
2009 $740million gain for the group

2017 $6,450million loss!

So....we're "winning".... :rolleyes::ugh::eek:

2nd half of 2017 made a $792,000,000.00 profit.

The doom and gloom is over.

Not through any skill of course, just location location location and a reducing fuel hedge screw up.

$6,450 million loss, and AT wants to take the P fund away from us and our families. How about you stop THROWING BILLIONS away and then (and only then) we can sit down and talk. In the meantime, younger pilots who still have a career to worry about are exiting this winged version of the Titanic.

The takeaway for me is that the “Management” put us (the employees) in an $800,000,000 US hole in 2017, and we clawed back all but 20% of that. I think we all deserve a full 13th month. Silly me!!! Here’s to YOUR bonuses mis-Management... How much are you skimming off the airline? I bet it’s more than a full 13th month would have cost for all of us.

... and just for perspective, the 2017 losses from fuel hedges alone was 37% of all staff costs combined. So they literally want us to pay for their hedging debacle. Some have even lost their jobs. TTW!!!

Sadly you are correct. Grinning idiots on CNY floats as just one example.

It’s like enabling your abuser and then blaming yourself. “Bunch of I diots” is an understatement.

Grinning idiot on the CNY float indeed. I want to :yuk: up. It's people like him that enable our management to avoid the recognition of their failings. One or two sycophantic pilots jumping at every chance to enable and justify the management and their tactics. While he was jumping around on the float, AT was sitting in her office planning the next cuts to HIS conditions. You sir are an idiot beyond redemption. You make me ill.

Just to be clear, this is far more than just messing up hedging. The only purpose of a true hedge is to smooth earnings (to help executives get their bonuses), but in the long run a hedge should have no effect on profit/loss. Oil prices go up and down — and airlines can do nothing about it.

What Cathay has done repeatedly is not hedging. It's reckless financial speculation.

Reference the above: when do the senior management start firing themselves? Just curious. If I had cost the airline BILLIONS due to my incompetence and arrogance, I suspect I would not be flying anymore. So explain to me, a) why are they still in their jobs ? , and b) why are THEY not paying for the mistakes they made, instead of threatening to make the other employees suffer and pay for their mistakes? Before I hear ANYTHING else from the likes of RH or AT, I want the AOA to get them to answer those two questions. Otherwise, no negotiation, no concession, no cooperation.

Come on, Trafalgar, they don't blame the pilots for hard landings, do they?

Dan B's got a good point, but I wonder what the numbers would look like if there had been NO fuel hedging AND the fuel had stayed up at around the $150 mark?

In other words, what was the risk/reward ratio for this gamble?

In "FAQ" it says they are foregoing their Bonuses for the second year in a row.
Doesn't say how much they'll be paid in the future to make up for it.

“Swire Properties (1972) today reported full-year profit of HK$33.95 billion from compared with HK$15.05 billion in 2016.”
I would imagine our Swire employee managers/directors would be receiving quite a bonus from this profit. Perhaps it will make up for their foregoing any CX related bonus?????

I would like to know why Inland Revenue allow a fine levied against fraudulent behaviour such as cargo price fixing to be written off against taxable profit? Sadly, we frequently see large corporations getting a smack on the wrist for fixing interest rates, cargo fees, currency exchanges etc and no-one gets sacked or shut down. It is obviously a management decision to task an individual, group of individuals or even a whole department with the job of defrauding their customers as the profit - even allowing for being caught and fined - is worthwhile. Then, when caught, they double dip by writing down the fine as a cost of doing business.
Another thing that gets my goat is that despite managing us into a black hole, Swire have elected to pay the full dividend to shareholders (ie themselves). They already skim their "management fee" before losses, but evidently that isn't enough.
They then have the gall to tell the employees that they need to tighten their belts and take one for the team. Good luck selling that one!

The employees are always more important that itinerant shareholders. It's disgusting they have paid the full dividend, but just more evidence for the AOA to hold the line against ANY concessions. If the shareholders can be treated such, then so shall we. Actually, where is the pay review and the overdue pay raise?

Does raise the question of why do they bother, unless they like the high profile that an airline has. Personally I would have sold CX/KA to the PRC a long time ago, and consoled myself with the piles of gold from property

They don't. From the IRD
Examples of non deductables: ♦ penalties/fines for breaking the laws; ♦ entertainment expenses not expended for business purpose; and ♦ rent or expenses relating to premises not occupied for the purpose of producing assessable profits.

Perhaps driving down employees COS and ignoring contractual and EO entitlements is considered a sport to them?
Makes for some great yarns at the China Club no doubt!

Thanks for clarifying that...blood pressure returning to lower levels.

Some interesting math:

Value of CX 53bn HKD

Value of CX shares in Air China 33b HKD

Basically, the market thinks CX is only worth 20bn HKD.