Starbear

Very cost effective and efficient..... Just ask the poor souls on the 747 FRA base who were all LHS/RHS qualified and today no longer have a job......CX will do what they want, you just better hope you have a seat at the table when the dust settles...

At least I am happy that the gravy train of the kitty city canteen clutchers continues unabated.
it must be quite difficult to keep those 17 aircraft flying that they need so many people in the office.

I was enjoying the CX City coffee the other day. You just need those flâneurs there to justify the cheque at the end of the month. I cannot see the boys having anything to do other than sitting down and chatting about the old days over a latte or two.

I was kinda talking about the non flt ops people that do god knows what

should be safety first
 

ToCatLady

If you would check the statistics, which might be available, but on the other hand might have been suppressed, you might find that there is a substantially higher accident rate with two line captains flying together. It seems that this combination somehow leads to increased stupidity.

I see a lot of inane and ill thought out comments made here (quelle suprise). I thought I might correct, or add to it ;-)

For those that keep stating that the airline will shrink - why? We have ground operations staff/equipment/buildings that are not down scalable. On the contrary, they are more efficient per unit of production as production increases. So the bigger we get, the cheaper per unit we become.

Aircraft are the revenue source - getting rid of a lot or all of our 777s (assuming they are not replaced with some other aircraft) will INCREASE our cost of production per unit. We own or finance lease around 3/4s of our aircraft. It is only the operating lease aircraft that can (presumably) be gotten rid of relatively cheaply. So we are stuck with cheap assets/finance leases for the foreseeable future - why take an even bigger short term hit by selling out now?

We have more aircraft now than we did two years ago since we now have the KA aircraft. We will (eventually) need more pilots than we have ever had before.
Our maximum training rate is around 10% (2015 was our peak training year and the sausage mill was running flat chat).

Looking at past seismic aviation events (9/11, GFC) flying recovered to 90% within 6-12 months - then took another 2-3 years to recover the last 10%. Covid is playing out differently - though in domestic markets (China, US and Australia) actual or forecast flying is above 2019 levels. So when eventually most international travel opens, we should expect at least 90% overall flying in the near term. Will that be xmas 2021? mid 2022? xmas 2022?

If we got rid of say 600 pilots or so - it would take 2 years to recover them in terms of training capacity limitations. Getting rid of the based pilots therefore makes no sense unless driven by some other factor.

If all your flying is done to/from a hub - then it makes sense to base/roster everyone from your hub. If the unit cost per pilot in HK is say $2X per hour - and $1X per hour on the base, then yes JCR will drive the location of some of the pilots to outports. But if the differential is removed (COS18) then the unit cost in HK might be say $1.3X - suddenly the economics aren't so clear. Having said that - I personally don't believe the recent actions are economically driven - I think it is all related to the working visa issues. That does beg the question though - why AOAC first then Oz (and then FRA?). I have no data on that - only opinion so not worth airing here. (after all - I am trying to be as factual as I can be)

I have heard some interesting 'departure rate' rumours (losing one pilot per day).
Here are the departure rates for last 6 years or so
2015 - 63, 2016 - 92, 2017 - 128, 2018 - 168, 2019 - 171, 2020 - 160* (*estimated)
Using data from Oct ASL till today (14May) I would estimate that 60 have left so far this year (101 have left from OctASL till 14May). The 60 so far this year equates to an annual rate of around 170 for 2021 (pre VSS/base closure obviously)

When compared to 2018, 2019 and 2020, the rate for the first 5.5 months is comparable. Base closures and VSS will clearly blow that number up. So I suspect we will be SIGNIFICANTLY short of pilots if you look at 2023 instead of summer 2021 requirements.


End of numbers - beginning of my speculation.
I think we need all the pilots we can get - not today -but for about 1 year to 18months from now. We are training constrained - pre training ban etc we were maxed out at 10% increase in pilot numbers - so clearly we shouldn't let our total pilot numbers drop below say 80-85% of our mid 2023 pilot requirements. Since the training ban - we have more trainers than before plus, thanks to the company response to the training ban, the training courses are more efficient. So maybe the real rate of pilot increase is significantly higher than my 10% - maybe up to 15%?

Numero, I love your posts, more please!

Thought some based non trainer Captains are dual seats TO LDG qualified, using FO limit when on right seat if not trainers.

Australia likely to remain closed until sometime in 2022.
India’s COVID raging out of control.
Thailand’s cases climbing.
Travel bubble with Singapore looking less and less likely with new restrictions being imposed as cases increase.
Quarantine period increased to 3 weeks in many countries.
Indian COVID variant more transmissible and infecting vaccinated people.
Delays in vaccination programs in many countries.
Travel unlikely to return to pre pandemic levels until 2024.

The recovery will be uneven, whilst domestic air travel in some countries has already recovered and may soon exceed pre pandemic levels, international is still dead in the water. When it gets going again, it will be direct flights between fully vaccinated countries such as UK - USA. Long haul connecting traffic will be the last to come back, particularly in the premium cabins.

CX have done a fantastic job in avoiding layoffs for as long as they have, EK were doing it within a few weeks of the shutdown and SQ a few months later. However you are kidding yourself if you think the airline will remain as it is for the next three years until normality returns. CX will need to downsize into something that can survive the next few years and adapt to what the future will bring.

A shortage of training capacity in the medium term is the last thing on the bean counters minds.

NC,

Applying logic to CX plans and actions really isn't very pragmatic.

Good to have you back NC.

Tend to agree with those that say this time is different. In fact it’s always different as the world is constantly changing, but a crisis either accelerates the change or moves the change in a different direction. The Insider magazine available on Press Reader has an article regarding everyone’s favourite consultancy firm McKinsey commenting on the current situation. The recommendation to their clients is “Reimagination” and “Reform” if you want to survive. We all know which airline is one of their clients.

As NC points out there have been many aviation downturns in the past few decades which the industry has recovered from. The Asian Financial Crisis, 9-11, SARS, GFC and our own Hong Kong protests. Those downturns were consumer driven, either a personal fear or a hip pocket fear. Once the fear subsided the rebound occurred.
This crisis at the moment is government and bureaucracy driven. As the GMO highlights, finding a way out will be a lot more difficult and time consuming than finding a way in. Then when the red tape is gone will there be a consumer driven downturn? What’s unquestionable is the financial impact of the past 15 months will be immense. Consumers will either pay for all this government debt either through higher taxes, or if governments keep the debt on their books, through inflation.

The airline has already changed significantly. It entered this crisis with a legacy wide body long haul fleet with legacy Conditions of Service including legacy hiring rules. It has now introduced a narrow body short haul fleet with greater hiring flexibility due to our “progressive” new COS. I can envisage that the new training “sausage machine” will be direct entry captains and first officers onto the HKE/CX A320’s with any slack being taken up by the traditional wide body training. The ME carriers without a significant narrow body fleet can comfortably support an attrition rate in excess of 10% while still growing. Even if CX find they are a bit short they still have about 500 crew that are to retire on their 55th birthday. Offering extensions to 55 year olds is hardly unheard of, as you’d know NC.

It’s a valid point that the airline has significant fixed costs that don’t go away by downsizing. Let’s see how their reimagination and reform goes. Do they sell or lease buildings, in part or in full, such as hello kitty city and the freight terminal? I’ve great faith in the ability of the COO to cut until there’s nothing left.
The decision to cut bases obviously isn’t unanimously endorsed by all of management. You don’t need to read past the first sentence of the CPB latest update to see what he thinks of Debbie Does Frankfurt.

Since B scale and certainly C scale bases have not been so much a direct cost saving measure (the savings being offset by the cost of complying with first world labor laws) as an incentive to attract and retain crew. The company had made noises about a reverse rostering type arrangement to satisfy homesick crew. That idea was dead in the water when the AOA rightly pointed out this would be in breach of the JCR agreement. The company’s policy of reform via the shredder has removed this obstacle.

So I agree, this time is different. It’s always different. It’s a question of how agile the company is now, and how agile it thinks it can be in the future. When it comes to agility I see the company vastly differently to how it sees itself, so I can’t apply my logic as to what happens next.

Some reasonable points above but the big white elephant in the room is HK itself and the ChiComm influence. This was changing before COVId and now appears to be more of a factor. HK isn't as attractive for aviation as it once was and that's only changing for the worse, not better. Now, more than ever, it's necessary to take the political and social issues into consideration when predicting the future of CX. That's changed from any other period in past downturns/recoveries.

I presume for safety all those on frankfurt base have been removed from flying and all the who were refused VSS have temporarily been removed from flying as well. In a first world airline to be offered VSS with a short timeframe and the pressures of that decision and some under the cloud of visa issues you would assume the safety managers would advise that these crew members would need some time to re-adjust again. As the job is not one of a paper shuffler where your error may only be a spell check issue.

Yep, a friend who is senior in a medium sized MNC, with operations all over the globe, has said that what has surprised them isn't the cost savings, but how more effective conference calls are than face to face. They can have all the right people on the calls, rather than just the senior people and/or flying out that marketing expert for just a one hour meeting. Business travel will still happen, but likely to just be the diplomatic "press the flesh - attaboy" tours rather than for substantive meetings.

One of my mates is an Ozzie businessman. He reckon that business travel will resume as zoom meeting are good for preliminary approach to a deal but closing it’s a whole different matter.

90% domestic business travel. You would presume shorter flights and fewer overall seats , making it slightly easier to drive the stats. But it is Good news

75% of statistics are made up

Well....afterall we are living in a world of if it is not my opinion then it is not the truth.....:*

90% ???
 

90% of intra NZ 'business" travel that is.. Corporate BS at its best.
Carriers world over spouting the same crap trying to prop up a long term major reduction in ALL travel to keep gullible shareholders from dumping their stock..
No matter which way you look at the airline world & travel; you can't make a silk purse out of a sows ear, PERIOD!

NC, while I admire your optimism, speculation and Einstein numbers, there is a line between the real world and lah lah land.

What Drc40 and others said, CXi ‘s gripes started a few years ago already, long before the china scamdemic, it’s all political and pressure from LCCs.

HKIA as a hub worked fine for CXi over the past decades, but that ship has sailed too. Direct flights from the mainland to wherever is the future.

Looking at who will be flying CXi in the future, if 40% of expats (in a recent survey) are talking about leaving the HKSAR - national security law concerns, that only leaves us with some cheap local tours around the “Rice Bowl” and that’s where HK Expresso comes in handy. But hold on: GBA (and possibly more players) will debut soon, so there goes that monopoly plan up in smoke too - again the pressure from LCCs.

Even a company like PAL has seen the writing on the wall, and started a major restructuring plan.

Philippine Airlines Seeks To Cut Boeing 777 And Airbus A350 Fleet
https://simpleflying.com/philippine-...es-cuts-fleet/

What CXi needs to do is to grow HKE, get rid of all 777s, cancel future orders, keep a few “A50s” to serve a handful of money making cities, and expand the cargo ops. With my primary school math: Fewer aeroplanes = fewer pilots.

The few changes CXi “management” have done until now, it might already be too little - too late.

Its not about COVID
 

COVID has been a gift for CX. All airlines are crippled and they can force POS18 on to the pilots. POS18 is a LCC style of contract (not really a contract as everything is company policy).

The base closures gives them POS18 forced on to the based pilots and allows them to terminate all those who chose not to return to HKG or "can not" because they can't get work visas - another win for the company.

As the full effect of POS18 (no housing) comes into effect many will sell up and leave, the shedding of the based pilots will cut numbers further.

Business travel will return - no one spends serious money without face to face time with the other party. The great unwashed down in EY will also return.

It won't be long before those who are left are working flat out, all on POS18. This is why the investors were so keen to pick up the bond offering. CX wins again.

poydras

Well there you go. Your mate just proved that going forward business travel will not increase by 50% to pre pandemic levels. As in the past they would have flown out for the whining and dining, sorry “preliminary approach” and then again for the signing. Now they only have to do the latter.

Any way you look at it of course business travel is going to resume, but it is never going to get anywhere close to the levels it was at before.

Never say never. Over time, business travel has only increased and you can expect that , after an initial pullback, it will start increasing above the pre-covid levels.

If you are negotiating a multi-million dollar deal, you need be in that room.
If there is a problem, you want to be in that room.
If you need to exert pressure, you have to be in that room.
You can't get those subtle clues from someone while the are not looking in your eyes.

In the Room ??
 

You mean like "in the room" when the Swire Princeling morons signed "face to face" for the fuel hedging contracts that evaporated ~ 5 BILLION USD in profits or do mean
"face to face" like when the Swire Princes negotiated to decrease HUNDREDS of MILLIONS in fines over the last 20 years for cheating ?
Or perhaps you mean "face to face" like when the London & HK Swire morons were scheming and colluding to "score big" on fuel hedging and rigging cargo prices scams that, like it or not, have led to the near death experience that CX faces today ?
The Princelings with their purported Midas touch anointed by HQ or promoted from within thence unleashed on the Swire empire turn out in the end ( CX case) to have the Medusa effect.. oops.

However, many deals and issues have been dealt with over the last year without people being in the same room... Did CX and Boeing need to be in the same room to delay the 777X orders?

How do you have a large conference on zoom? How do companies display their product? How can you taste food? Sit in a new car or boat etc?
Business travel isn’t just some suit travelling to sign a contract, it’s so much more than that. Yes zoom, will have a place but airlines will adapt and won’t really care who sits in the comfy seats, as long as their paying for it who cares?
as for the melon talking about Concorde above, any volunteers for hitting him with his own dumb stick? Pretty sure no one cared about telecommunications on those LHR-BGI flights we used to do. Maybe the years have clouded my brain but I recall it was more the fact it couldn’t go supersonic over land so was heavily restricted on the routes it could fly to turn a profit. That and after the french went and crashed one, the increased weight due to the modifications in the wing tanks made it more challenging to reach JFK westbound in one go.

There will still be some business travel but nowhere near pre covid numbers . The world has adapted,deals are still being done . Business travel, if really required, will be in Y+ class. Cost cutting was needed badly this past year and as stated shareholders will want to recover at all costs !

None of this matters. Unless you're already resigned with the fact that your current employer (if it's cathay) is below zero credibility level as an employer and you must find a new job outside hk (because as cx has proved by legal precedence) that the employment contract you sign in hk isn't worth the toilet paper you're signing it on... it does matter at all if cathay or hk business comes back after covid or not... it doesn't matter at all anymore if business travel or any travel comes back here.

Seriously... are you people still in.denial?!

dctPub

Good for ANZ but I would suspect it's a minuscule blip in the world impact of business travel. Especially in Euro and US. There are many anecdotal reports of companies making permanent changes to their business travel budgets. Certainly not eliminating it completely but it stands to reason some long term effects will happen. I've personally talked to dozens of business travel decision makers and I can count on 3 fingers those who said they'll be back to 100% pre COVId levels. The bean counters and management have had a one year test run and it's been a resounding success.

Some depressed, gloomy people over here.

Some delusional people here.

Numero Crunchero

Not wanting to debate the other hyperbolic points but not sure where you're getting US numbers. They are NOT anywhere near actual 2019 levels or forecasted to be or even close to 90%. The best days they are having are in the 60-70% range with heaviest days being Sundays. ie Not Business! Which is where the real $$$ are needed for airlines.

Airfares are usually based on last years +/- a few percent, setting these fares as travel picks up will be very difficult as the environment will have completely changed. Expect a few wild swings as things settle down. I’m interested to see how much of a premium airlines will be able to change for business over economy. Normally it’s about 3x the price, with flights into New York up to 5x and flights into Bangkok down to 2x.

As business travel will take longer to recover I would expect to see cheaper fares in this cabin but more expensive in economy as airlines try to recover the loss of revenue. At the end of the day it all comes down to supply and demand, with the bean counters trying to maximise the income from each flight.

They said the same stuff last time about travel. Blah blah blah. Travel rebounded even stronger. Same will happen this time.

Yes it will, just not in HKG.

Exactly. I understand the reluctance in accepting difficult outcomes because it's painful. This has become clearer every day/week/month. Right in front of us. HK, CLK and CX are all impacted and for the worse. It royally sucks because HK (and CX) have been great for many of us. This city was the center of the universe only rivaled by New York. Of course it isn't "ending" but the vib is tarnished, the allure diminished and everything else just aligns with ChiComm. Ugh

Hong Kong doesn’t need free elections or even free speech in order to be a significant financial hub.

It is a real shame what has happened over the past two years, but it won’t necessarily affect business and it’s travel in the long term.

Singapore isn’t a free country, Beijing and Shanghai aren’t free, so it’s not a requirement for money to flow.

one thing is for certain, there will be a lot of hkg-lhr flights in the years ahead.

https://www.thetimes.co.uk/article/c...nses-8w6k98lnt

What isn’t so certain is which airlines will be doing the flying.

Oasis

I imagine multi-million deals are negotiated by execs with access to the corporate jets.