CX New strategy rollout in 2017
#196
Join Date: Jul 2014
Location: SFO/HKG
Programs: ex-UA 1K, AA EXP, Hilton Diamond
Posts: 535
Lots of very well said points on this thread. Given the amount of thoughtfulness in these posts, I'm 100% certain CX has a management problem and an even bigger problem if insights like these go blind and wasted. It's particularly pathetic they're making public excuses for a lack of vision and execution while short changing their customers. It's undoubtedly turned into an us vs passengers mentality.
The current situation is similar to Smisek days at United with the changes he thought people would like. The best change that happened to UA flyers was when he was booted out the door.
The current situation is similar to Smisek days at United with the changes he thought people would like. The best change that happened to UA flyers was when he was booted out the door.
#197
Join Date: Oct 2016
Posts: 291
The issue is they have diluted profitability as the HK market for high paying passengers is saturated. After all how many more investment bankers are there in HK by now? So their capacity expansion is very much catering to transit passengers, which are inherently less profitable.
Additionally the combination of inflated ex-HKG pricing and the new MPC status system actively encourages shopping for cheaper one stop J flights versus buying PEY and upgrading. Why pay HK$28k + 30,000 miles for a non-stop CX HKG/LHR J seat and get 110 TP's when QR costs HK$25k and gets 200 TP's?
Additionally the combination of inflated ex-HKG pricing and the new MPC status system actively encourages shopping for cheaper one stop J flights versus buying PEY and upgrading. Why pay HK$28k + 30,000 miles for a non-stop CX HKG/LHR J seat and get 110 TP's when QR costs HK$25k and gets 200 TP's?
#198
Join Date: Jul 2005
Location: Hong Kong
Programs: CX Diamond, UA Platinum, SPG Plat, Marriott Plat
Posts: 123
Follow up article on cost cuts coming...
Didn't see this posted locally but interesting comments here from Air China boss (2nd largest shareholder). I didn't see service cuts mentioned but those are always low hanging fruit for the accountants... the problem is CX needs to SPEND to bring their service back up to the top standards...
http://www.thestar.com.my/business/business-news/2017/04/02/cathay-pacific-targets-hk$4bil-in-cuts-over-three-years/
http://www.thestar.com.my/business/business-news/2017/04/02/cathay-pacific-targets-hk$4bil-in-cuts-over-three-years/
#199
FlyerTalk Evangelist
Join Date: Jul 2006
Location: Hong Kong, France
Programs: FB , BA Gold
Posts: 15,564
Didn't see this posted locally but interesting comments here from Air China boss (2nd largest shareholder). I didn't see service cuts mentioned but those are always low hanging fruit for the accountants... the problem is CX needs to SPEND to bring their service back up to the top standards...
http://www.thestar.com.my/business/business-news/2017/04/02/cathay-pacific-targets-hk$4bil-in-cuts-over-three-years/
http://www.thestar.com.my/business/business-news/2017/04/02/cathay-pacific-targets-hk$4bil-in-cuts-over-three-years/
http://www.scmp.com/news/hong-kong/a...er-three-years
I understand that CX has started firing a large number of people at the high management HQ level and will soon fire more at the low management HQ level.
What escapes me is why it took Ivan Chu so long to react. Why for the past few years cost-cutting has only affected pax and not staff?
Until now, Chu has granted generous pay raises to staff, rather than understanding that the critical situation required drastic measures.
It seems that he is doing it under pressure from the board; and Air China has been quite vocal about it. CX is holding 20% of Air China and their profit allowed CX to reduce its losses. But CA must be very unhappy that its 30% stake in CX yields a loss.
In most public companies, a CEO lacking foresight would be fired.
Last edited by brunos; May 17, 2017 at 5:05 am Reason: typo CI CA
#200
Join Date: Feb 2010
Location: KMQ
Programs: JMB Diamond,NH Diamond, Marriott Lifetime Titanium Elite, IHG Royal Ambassador Spire,
Posts: 363
That article was published in SCMP on 31 march:
http://www.scmp.com/news/hong-kong/a...er-three-years
I understand that CX has started firing a large number of people at the high management HQ level and will soon fire more at the low management HQ level.
What escapes me is why it took Ivan Chu so long to react. Why for the past few years cost-cutting has only affected pax and not staff?
Until now, Chu has granted generous pay raises to staff, rather than understanding that the critical situation required drastic measures.
It seems that he is doing it under pressure from the board; and Air China has been quite vocal about it. CX is holding 20% of Air China and their profit allowed CX to reduce its losses. But CI must be very unhappy that its 30% stake in CX yields a loss.
In most public companies, a CEO lacking foresight would be fired.
http://www.scmp.com/news/hong-kong/a...er-three-years
I understand that CX has started firing a large number of people at the high management HQ level and will soon fire more at the low management HQ level.
What escapes me is why it took Ivan Chu so long to react. Why for the past few years cost-cutting has only affected pax and not staff?
Until now, Chu has granted generous pay raises to staff, rather than understanding that the critical situation required drastic measures.
It seems that he is doing it under pressure from the board; and Air China has been quite vocal about it. CX is holding 20% of Air China and their profit allowed CX to reduce its losses. But CI must be very unhappy that its 30% stake in CX yields a loss.
In most public companies, a CEO lacking foresight would be fired.
Last edited by jackrussellterrier; Apr 3, 2017 at 7:27 am Reason: update
#201
Join Date: Oct 1999
Location: HKG
Programs: CX DM, SQ, BA, TG, Sheba, VN, MPO since 1980
Posts: 1,058
Cathay Pacific launches leadership shake-up ahead of staff cuts and major restructure
Cathay Pacific launches leadership shake-up ahead of staff cuts and major restructure
Middle management at the embattled carrier will be interviewed for redeployment, while other positions will be cut completely
http://www.scmp.com/news/hong-kong/e...ip-shake-ahead
Middle management at the embattled carrier will be interviewed for redeployment, while other positions will be cut completely
http://www.scmp.com/news/hong-kong/e...ip-shake-ahead
#202
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,803
That article was published in SCMP on 31 march:
http://www.scmp.com/news/hong-kong/a...er-three-years
I understand that CX has started firing a large number of people at the high management HQ level and will soon fire more at the low management HQ level.
What escapes me is why it took Ivan Chu so long to react. Why for the past few years cost-cutting has only affected pax and not staff?
Until now, Chu has granted generous pay raises to staff, rather than understanding that the critical situation required drastic measures.
http://www.scmp.com/news/hong-kong/a...er-three-years
I understand that CX has started firing a large number of people at the high management HQ level and will soon fire more at the low management HQ level.
What escapes me is why it took Ivan Chu so long to react. Why for the past few years cost-cutting has only affected pax and not staff?
Until now, Chu has granted generous pay raises to staff, rather than understanding that the critical situation required drastic measures.
#204
Join Date: Apr 2017
Posts: 131
That article was published in SCMP on 31 march:
http://www.scmp.com/news/hong-kong/a...er-three-years
I understand that CX has started firing a large number of people at the high management HQ level and will soon fire more at the low management HQ level.
What escapes me is why it took Ivan Chu so long to react. Why for the past few years cost-cutting has only affected pax and not staff?
Until now, Chu has granted generous pay raises to staff, rather than understanding that the critical situation required drastic measures.
It seems that he is doing it under pressure from the board; and Air China has been quite vocal about it. CX is holding 20% of Air China and their profit allowed CX to reduce its losses. But CI must be very unhappy that its 30% stake in CX yields a loss.
In most public companies, a CEO lacking foresight would be fired.
http://www.scmp.com/news/hong-kong/a...er-three-years
I understand that CX has started firing a large number of people at the high management HQ level and will soon fire more at the low management HQ level.
What escapes me is why it took Ivan Chu so long to react. Why for the past few years cost-cutting has only affected pax and not staff?
Until now, Chu has granted generous pay raises to staff, rather than understanding that the critical situation required drastic measures.
It seems that he is doing it under pressure from the board; and Air China has been quite vocal about it. CX is holding 20% of Air China and their profit allowed CX to reduce its losses. But CI must be very unhappy that its 30% stake in CX yields a loss.
In most public companies, a CEO lacking foresight would be fired.
#205
FlyerTalk Evangelist
Join Date: Jul 2006
Location: Hong Kong, France
Programs: FB , BA Gold
Posts: 15,564
#206
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,803
#207
FlyerTalk Evangelist
Join Date: Dec 2004
Programs: CX Green, QF Platinum, BAEC Silver, Hyatt Glob
Posts: 10,780
Opinion piece calling on Cathay to stop resisting becoming/adding a LCC to its portfolio:
https://www.bloomberg.com/gadfly/art...cathay-pacific
https://www.bloomberg.com/gadfly/art...cathay-pacific
#208
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,803
CX is already a LCC charging premium fares for schedule. Same strategy as BA. Not news and even economically rational in my way of thinking.
Last edited by percysmith; May 19, 2017 at 4:32 am
#209
Join Date: Aug 2011
Programs: Marco Polo
Posts: 546
Opinion piece calling on Cathay to stop resisting becoming/adding a LCC to its portfolio:
https://www.bloomberg.com/gadfly/art...cathay-pacific
https://www.bloomberg.com/gadfly/art...cathay-pacific