As Cathay Pacific continues to suffer from the fallout of violent pro-democracy protests that has seen a huge slump in air travel demand to the territory, the airline has nonetheless agreed to give flight attendants and many other of the group’s 25,000+ staffers a 2 per cent year-end pay rise. In addition, Cathay Pacific will pay all staff an ex-gratia payment equivalent to one month’s pay or HK$30,000 (USD$3,800) – whichever is lower.
But while seemingly positive, the ex-gratia payment does come at the expense of normal year-end bonuses and many staffers have been left in no doubt that many other agreements will come under pressure as the airline seeks to massively cut costs throughout 2020.
“I recognise the disappointment of not being paid a Discretionary Year-End Bonus and hope the ex-gratia payment represents a token of our goodwill and appreciation,” explained Cathay’s new chief executive Augustus Tang Kin-wing in an internal memo. “I know people are pulling together and supporting each other through what has been a very turbulent period,” Tang continued.
Describing the current situation at the airline as “turbulent” the Cathay Pacific Flight Attendants Association (FAU) told its members that executives at the airline had refused to negotiate many of the points on its year-end agenda. Only a couple of days ago, talks to secure a pay rise had stalled but the staff union has conceded that the new offer from Cathay Pacific is the best that can be offered.
It’s a big change from last year when staff received annual pay rises of between 3 and 8 per cent.
“Even though the increment percentage is lower than what we proposed, we understand the turbulent period the Company is under,” the union told its members.
“Throughout this year-end negotiation, the Management (Cathay Pacific) kept reiterating the challenges and uncertainties our Company is facing and cost containment will be the main focus for the Company to sustain,” the memo continued.
The union warned that cost-cutting measures likely to be implemented in the new year will have a “significant impact” in the lifestyle and benefits that flight attendants have become accustomed to.
For the first time in years, Cathay Pacific warned recently that it would actually shrink next year by an estimated 1.4 per cent. The airline had originally hoped to expand by over 3 per cent in 2020 but that plan had been made before protests started to grip Hong Kong.
In October, Cathay Pacific recorded a drop in passenger numbers of over 7 per cent. Capacity across the Cathay Pacific route network has been reduced by as much as 7 per cent in December as it adjusts to falling demand. Chief commercial officer, Ronald Lam has warned that forward bookings continue to look “weak”.