If no one volunteered then maybe the airline would adjust its approach and support its pilots.

or maybe there’s too much logic in that…

I spend most of my month on EMS, or queueing for 2hrs+ at a testing centre. I do not do closed-loop and I still take a salary, how does this fit your "nothing" description?

Fair enough. Let me re-phrase: stop the righteous judging of closed-loop volunteers. Mind your own business.

PS Any suggestion that starts with " If no one would.." is futile

the airline is afloat because the HK government poured almost 30b into it.....

True. For now.

true-airline solvent
false-airline bankrupt
for now- ??

Is this stating the airline is afloat due to closed loop or government money?

Or, the airline is now a zombie company?

Afloat mainly because of Gov money. For now.

Have they actually drawn down the government money ?

No, but they might have to when they see my closed loop paycheck.

Well I trust you live long enough to spend it.

Hahaha cringe.

In seriousness, the government help is bifold: equity plus an optional loan. The equity deal has been done, the loan is on hold. At least that is my understanding.

According to Bloomberg the loan is structured like a developing country loan. In 2026 the annual repayment will be more that Cathay Pacific have ever made as a profit in a year.

A developing country has to give a sea port or a third of its agricultural produce to offset the loan. Cathay will have to give most of itself. Such is "Capitalism with Chinese characteristics"

Cathay made a profit of 14 Billion HK$ in 2010.

And that’s the last time you’ll see that.

Zombie Company ??
 

If you have even a rudimentary ability to balance a cheque book, your question becomes rhetorical :rolleyes:

isn't that a way they manipulate the words? They said they haven't used the gov money and they have 20 billion in the acc or thereabout, wouldn't that mean if it wasn't for the Gov, they would've used up all their own cash?

Anxio, I remember reading that article and thinking it was like reading the financial version of the national enquirer. A load of sensationalist BS

If my memory is correct it was talking about an interest bill of $2billion HKD in 2025 or 2026 - we made 1.5-2Billion in the 2nd half of last year with less than half our aircraft flying and in the middle of a pandemic. We lost 32 Billion in fuel speculation over 4 years - so yeah, I think we can manage to make the interest payments on less than 30billion in loans at an interest rate that gradually catches up to around 5-6 %

CX aint going broke any time soon. Not this year anyway - if things stay locked down like they are on 10th of Feb for the rest of this year - we will still have probably half of that money left undrawn.

Hold on to that thought NC. I can’t name a single airline ( other than the ones solely in Govt hands with long pockets such as the ME3 that tend not to publish results anyway) that can function without actually generating revenue. ie flying.
Where do the lease payments for -8’s, A320’s/ A321’s/A50’s figure in your calculations ? And that’s the CX fleet alone. HKE has a relatively young fleet. I can’t imagine that they’re all paid for. To say nothing of the rent etc on the tenanted land that the airline and subsidiaries occupy at CLK, rents at outports, leasing of APU’s/ power plants etc.
It’s a massive drain. And can only lead to the balance books going one way, in the absence of any real revenue.

The best analogy here is ‘ selling the farm’ leasing the livestock and having an overdraft that incurs significant interest penalties.

Yeah, CX isn’t going broke anytime soon, but how big is the noose that it’s head is sitting in?

I like the saying I can’t see the forest through the trees’.

If CX don’t turn this around, the convertible bonds will collapse the share price, ask yourself what happens then?

More like 9% interest by 2026. Here’s the Bloomberg article again. Tax payers money used or not, fact is that any loan must be paid back, capital + compounded interest.


https://cimg0.ibsrv.net/gimg/pprune....e16e97c1e.jpeg


https://www.bloombergquint.com/gadfl...ntine-measures

150 very expensive jets still parked, ! Piling up the debt, total lockdown looming, staff still leaving, the CCP. You don't need a commerce degree to see they are in very hot water.

Globnocnik
I don't 'come up with the figures' - accountants following GAAP do so. So if they say we made 1.5-2.0B for 2nd half of last year, then you might find that all the things you mentioned are included.

Cury
thanks for posting that article - saved me looking for it. I recall that CX sought permission to delay borrowing so not sure when the interest rate ratchets up - from drawdown or on predetermined calendar dates.

But from the article - it says the interest bill will 'top out' at around 2Billion in mid 2025(assuming all government money has been drawn down). So, if things hadn't taken a turn for the worse in December, we would NEVER have used a single cent of the government loan as were cash flow neutral to positive for the 2nd half of last year. If things stay as they are now till say, June 30th this year, then yeah we will probably have drawn down 5-7.5B. If we were cashflow neutral to positive late last year, when we can match that level of flying again we will no longer draw down any more money. So in that hypothetical "back to Nov 2021 conditions on 1st of July 2022" if we never choose to repay the 5-7.5B then the interest bill in 2026 will be about 450-675m. So like i said - not going to be a game changer. The Bloomberg article is as prescient and accurate as the Melbourne Truth or TMZ or National Enquirer.

Last thing people don't seem to get - this company has 3 main shareholders who hold, collectively, 80+% of the shares (Swire, China and Qatar). So pray tell how falling corporate bond prices will cause the other 20% of shares to fall to levels such that the 80% majority stake is forced to capitulate to market sentiments? This is effectively a privately owned company with a small public stake and an even smaller government stake.

As I said - this airline aint even close to going broke - and given past govt support is there a good reason for the government not to further support us in late 2023 or 2024 if things are still as bad as this month?

I tend to agree with STW on the macro - HK is less than 1% of China's population with low single digit contribution to the economy. We are, at best, a 32nd province. And they care no more nor less about CX and expats than Aussie govts(federal and state) cared about Qantas or Virgin. The hotel industry is hurting - restaurants are hurting - bars are hurting. Is the mainland also trying to get rid of hotels, bars and restaurants? Or they similarly the unlucky recipients of current polices?

That article clearly states that the prediction is based on late 2021 performance.

Things have taken a huge step backwards since.

The notion Cathay had accepted usurious conditions forced on them by the HK government is self-defeating. If you want to kill off a dying company you obviously don't inject cash into it first.

Governments all over the world supported local airlines and other companies in times of force majeur, not really surprising HK followed that path.Additionally, if borders remain closed the credit line will obviously be extended or altered.

I recommend the stock price as indicator. Cathay is up 10% YTD. The credit conditions can't be that ominous.

Cathay can do nothing about CoVid and it is powerless to do anything about Government restrictions. It is adrift without any ability to turn the bad news into good. They have no alternative other than to continue to burn cash until these factors beyond their control change. How long will that be? How long will the cash last with a predicted cash burn of $1 billion HKD per month? As yet the stock price has not plummeted ,so perhaps the markets have more optimistic data but from an outsider point of view the situation looks grim.

Go on Google Earth and check the HKIA development. Someday in the not so far future this place will be one the biggest airports in the world. Cathay will be the major airline operating out of HKIA, and the China market will grow faster than any other global market. Additionally, Cathay will have a much lower cost base than before the pandemic. I say Cathay will be highly profitable. And if that sounds unbelievable, I have one more for you. Hong Kong will become one of the wealthiest and most prosperous cities in the world, if not THE richest city in the world. No other city is better placed to profit from the Asian century.

You’re smoking some seriously strong S:mad:T STW

STW, I have to admire your glass half full optimism! You will obviously be buying Cathay stock like crazy. However, “in the not so far future” that you envisage is a long , long, loooong way off especially as the Government are adamant around the Zero CoVid policy ( which is now unachievable). As a result the HKG Airport remains almost closed for business until when ? Until CoVid suddenly disappears from the rest of the world? No airline can survive indefinitely on a 2% passenger and 20% cargo current figure from pre Covid figures.

I think STW, you need to get back to your Rugby 7's adverts and flash mob dancing,You are beginning to sound very desperate! I know your boss is giving you a hard time about retention but trying to convince our mob on here that CX is going to become the most incredible airline in the most incredible city is cringeworthy.

Have you been sampling those CBD oils recently?

I never said nor do I think living in HK or working for Cathay will be desirable. I said the pandemic will end and Hong Kong's economy will recover.

https://cimg8.ibsrv.net/gimg/pprune....0ccfb12d2.jpeg
STW, you remind me of Ernie sometimes.

Spot on, this post.

What in the hell are you smoking STW?

Blimey.

Yeah, good luck with that mate.

Get back to your closed loop, and quit posting nonsense.

Idiot.

https://cimg1.ibsrv.net/gimg/pprune....067fd1fd61.png

STW and NC are right. The investments made by various parties in the new airport infrastructure make the last and future CX government bailouts look like peanuts. The new runway alone is costing $142 billion HKD.

Bondholders and the market don't seem too worried. Cathay was recently able to issue bonds yielding a ridiculously low 4.875% (for a company that has no short term revenue prospects), and can issue more if it needs to. It can also issue more shares, and it can also ask the government for more money.

Based on it's current cash position it can keep paying all its obligations for another three years with practically zero revenue.

betaboy

I’ve said this multiple times, and I’ll say it again:

CXi’s problems started way before covid. There’s this thing called competition, and with GB Airlines making it’s entrance this year (or magically when the borders open), the monopoly that CXi was hoping HK Express would have had, will evaporate.

And then there’s a plethora of other LCCs and legacy carriers who will be back too, utilising the 3rd runway, which, btw, wasn’t built for CXi.

The HK Govts (tax payers) loan to CX, which was made very clear to be a once off only, was granted before the introduction of the national security law, and the company has since fallen foul with the CCP.

So mix politics with competition, a massive loan that carries interest and companies + individuals leaving the “SAR” in droves, on one way tickets, and you’ll find that the picture doesn’t seem so rosy any longer.

Time will tell, but one thing that is for certain: CXit will never ever be what it was before. Lost opportunities, billions squandered away by so called “top management” - a bunch of amateurs with one mission only: plunder and move on!

At some point you guys will have to make a decision. Will there be no flights forever or will there be flights but the competition will steal them? It can't be both, can it?