Hong Kong flag carrier Cathay Pacific said Thursday (5 November) that the majority of its pilots and cabin crew have opted to sign up to new contracts. The reduced deals were necessary for the airline to survive, Cathay Pacific has said. Following the end of the consent period that ended Wednesday (4 November), Cathay said 2,613 pilots and 7,346 cabin crew have signed on to the new conditions of service. This represents 98.5 percent of pilots and 91.6 percent of cabin crew who were asked to agree to the new contracts.
Cathay announced in October it was restructuring, laying off 6,000 workers and killing off its Dragon Air affiliate in order to survive the COVID-19 pandemic. “We are very grateful to those who have accepted the new contracts,” Cathay said in a statement announcing the new deals. “These are competitive contracts, which will enable us to continue to recruit and retain the very best people to be our pilots and cabin crew as we seek to survive and rebuild our business…For those who decided not to join us, we respect their decision. These staff will be offered packages that go beyond statutory requirements. None of the severance payments will be offset against pension contributions, and staff will be reimbursed for any unpaid leave they took in 2020.”
Cathay added that it has scaled back capacity to match demand and expects to operate well under 25 percent of 2019 passenger capacity in the first half of 2021, and below 50 percent for the entire year.
The company also said its “cash-preservation measures continue unabated”. Executive pay cuts will continue throughout 2021 and a third voluntary Special Leave Scheme for non-flying employees will be introduced for the first half of next year. There will be no salary increases for 2021 nor the payment of the annual discretionary bonus for 2020 across the board for all employees.
Cathay said the restructuring will reduce operating cash burn by about HK$500 million (US$64.47 million) per month, bringing it down to HK$1 billion-HK$1.5 billion per month.