It’s no secret that Cathay Pacific has been struggling financially for the past few years… The Hong Kong-based airline has been fighting off intense competition from Middle East carriers as well as a new wave of regional low-cost competitors and rapidly expanding Chinese mainland airlines. Rising fuel prices and a strong U.S. dollar have only added to Cathay’s woes and have contributed to the airline’s significant losses.
To get back in the black, Cathay is half-way through a big cost reduction programme which has seen some middle management roles made redundant. At the same time, the airline has been making investments in its onboard product to better compete with its rivals. Stuck in the middle are Cathay’s flight attendants who are expected to implement new services while accepting less generous working conditions.
One big point of concern amongst the airline’s cabin crew community was the introduction of a Dine On Demand service for Business Class passengers. Cathay executives see the new service as essential to win high-paying passengers but have been forced to make a number of big changes based on angry feedback from its flight attendants.
The introduction of a bespoke iPad ordering system – similar to what many servers in chain restaurants have used for years – will be introduced in late 2019 in an attempt to reduce the workload of cabin crew during the new service. The use of new technology is a compromise solution to avoid paying out for an extra member of cabin crew that the airline can ill afford.
Nonetheless, and perhaps realising that it was on the verge of losing the confidence of its cabin crew, Cathay Pacific has agreed to make a number of concessions to improve the pay and conditions of onboard staff. After initial negotiations that didn’t seem to be making any progress, the airline has offered a 3% pay rise for 2019, as well as a yearly bonus worth one month’s salary.
Considering Cathay’s current financial position, this deal seems like a good one for flight attendants – although, there are still some concerns…
Cathay has come under criticism for reducing ad Diem allowances at some outstations, changing hotel accommodation to cheaper options and reducing the layover length of some trips. In some cases, the airline has been forced to backtrack on its cost reduction plans – notably, a decision to reduce the layover time in Tel Aviv had to be reversed after fierce opposition from the flight attendants union.
In the last year, Cathay’s flight attendants also won the right to retire an older age. The vote was recently ratified by the airline’s board and will bring Cathay’s retirement age for flight attendants in line with major regional competitors like Singapore Airlines and Japan Airlines.
Cathay Pacific has also been facing significant pushback from its pilots who have been fighting cost reduction plans, especially in terms of housing allowances in the famously expensive Hong Kong. Last year, officials banned recruiters from mainland Chinese airlines holding events in the city in a bid to stop an exodus of expat pilots.