CX return to profitability

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Old Feb 19, 19, 11:00 pm
  #1  
feh
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CX return to profitability

HK$2.3bn preliminary profit estimate for 2018, apparently: https://www.scmp.com/news/hong-kong/...23-billion-net
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Old Feb 19, 19, 11:33 pm
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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.
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Old Feb 20, 19, 12:05 am
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Good news, hope their hedging program losses starting to end soon. Oil had been a drag for CX for a while now.
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Old Feb 20, 19, 5:54 am
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Time to fix... stupid IT systemssss/inflight catering/A359 biz cabin and toilet/regional crap biz seats
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Old Feb 20, 19, 6:07 am
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Regional business food and seat is so bad I now hate to use my 50k J to Japan. Can’t go anywhere decent on J with 50k miles.
Had a sector in JAL J and I could feel the difference.
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Old Feb 20, 19, 6:17 am
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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.
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Old Feb 20, 19, 6:39 am
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Originally Posted by christep View Post
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.
Not being sceptical to that point- wouldn’t be surprised one bit- but, would love to know more- who was on the other side/how it flowed to Swire?
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Old Feb 20, 19, 11:07 am
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There are plenty of rumours about who was on the other side but i suspect it will never be confirmed.

Either way i think they were all supposed to expire by the end of 2018.
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Old Feb 20, 19, 1:54 pm
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Originally Posted by christep View Post
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.
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.
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Old Feb 20, 19, 8:14 pm
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Originally Posted by christep View Post
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.
If fuel hedge would give money to Swire why do they kill the over-hedging?
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Old Feb 20, 19, 9:06 pm
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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.
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