CX return to profitability
Feb 19, 2019 | 11:00 pm
#1
Original Poster
Join Date: Jan 2017
Programs: Cathay Pacific, IHG, Air Astana
Posts: 109
CX return to profitability
HK$2.3bn preliminary profit estimate for 2018, apparently: https://www.scmp.com/news/hong-kong/...23-billion-net
Feb 19, 2019 | 11:33 pm
#2
FlyerTalk Evangelist
Join Date: Jul 2006
Location: Hong Kong, France
Programs: FB , BA Gold/OW emerald, QR
Posts: 17,049
Excellent news.
It might sound paradoxical, but higher oil prices in 2018 might have helped the results given the hedges. If hedges are marked to market, they will show an accounting gain from 2017.
It might sound paradoxical, but higher oil prices in 2018 might have helped the results given the hedges. If hedges are marked to market, they will show an accounting gain from 2017.
Feb 20, 2019 | 6:17 am
#6
Suspended
Join Date: Jun 2002
Location: Hong Kong
Programs: None any more
Posts: 11,017
They were always profitable. Swire just chose to transfer a large chunk of that profit directly to themselves (through the fuel hedge) rather than having to share it with CA and other shareholders.
Feb 20, 2019 | 6:39 am
#7
Join Date: Jun 2006
Location: NYC/SIN
Programs: CX DM, SQ KF
Posts: 2,344
Not being sceptical to that point- wouldnt be surprised one bit- but, would love to know more- who was on the other side/how it flowed to Swire?
Feb 20, 2019 | 1:54 pm
#9
Join Date: Jan 2000
Posts: 3,218
If so, this would have to be a disclosable related-party transaction to the exchange, and nothing has been disclosed (that I can recall at least). Of course, the exchange is a toothless tiger and private Swire is probably in the oil trading business too, but I doubt Swire was on the other side. Generally speaking, Swire's disclosure is far better than the average HK corporate.
Feb 20, 2019 | 8:14 pm
#10
Join Date: Jun 2016
Location: Hong Kong
Programs: Lowly CX & IHG
Posts: 382
If fuel hedge would give money to Swire why do they kill the over-hedging?
Feb 20, 2019 | 9:06 pm
#11
Join Date: Aug 2016
Programs: CX Life Time,TG,
Posts: 344
Certainly the losses in years past were due to CX gambling on fuel prices. No doubt all the other reasons they give are valid, but to a lesser extent. (If you want details look at CX web site, Investors, Accounts or Financial Briefings presentations - everything is there.)
I doubt that Swire was the counterparty. That is the dream of crazy pilots.
However I am worried by the continued reference to strong business class demand. In my case (usually from Manila), ticket prices to HK used to be over $950, now I can get $64X for 3 nights in HK. Before I bought cheapo economy or PY and was upgraded to circa 75% of the time. Now I buy I or D. We both win. If CX try to get clever and push up I/D fares I'll revert to my old pattern and wait for upgrades. Similarly MNL to SIN, but MNL to BKK price has taken off so I fly TG. If CX get the prices right the punters will buy.
I doubt that Swire was the counterparty. That is the dream of crazy pilots.
However I am worried by the continued reference to strong business class demand. In my case (usually from Manila), ticket prices to HK used to be over $950, now I can get $64X for 3 nights in HK. Before I bought cheapo economy or PY and was upgraded to circa 75% of the time. Now I buy I or D. We both win. If CX try to get clever and push up I/D fares I'll revert to my old pattern and wait for upgrades. Similarly MNL to SIN, but MNL to BKK price has taken off so I fly TG. If CX get the prices right the punters will buy.