Flight attendants at Cathay Pacific have been forced to sign a new contract that allows the Hong Kong-based airline group to move them to budget subsidiary HK Express or to perform alternative roles on the ground. On Wednesday, the embattled airline group announced plans to make 5,900 staffers redundant, shutter its Cathay Dragon regional airline with immediate effect and impose sweeping contractual changes to make the airline more competitive.
The massive restructuring will see many of Cathay Dragon’s flights move to HK Express so that the Cathay Pacific Group can realise cost savings while competing with mainland Chinese airlines with lower fares. Cathay Pacific acquired HK Express last year and the airline initially had to reassure budget-conscious travellers that it would remain a low-cost carrier.
But as Cathay Pacific looks to carve out an existence on the other side of the COVID-19 pandemic, the HK Express brand is becoming much more important to its future. In contrast, Cathay Dragon operated with much higher overhead costs, including wage bills for pilots and cabin crew on more generous contracts.
The Hong Kong Dragon Airlines Flight Attendants Association blasted the company on Wednesday for its decision to shut down its regional subsidiary which first started operations in 1985 as Dragonair. Cathay Pacific acquired a significant stake in the airline in 1990 before buying it outright and rebranding the carrier as Cathay Dragon in 2006.
The majority of cabin crew at Cathay Pacific and HK Express will keep their jobs for now but with big changes on the horizon. Cathay Pacific flight attendants could be asked to work for HK Express as the budget carrier takes on more routes in a contract change known as ‘interoperability’.
Cabin crew will be expected to work on any Cathay Pacific aircraft and for any group airline as the business sees fit. They may also be reassigned to work other jobs on the ground or provide services for any other business that Cathay Pacific determines.
Higher ranking cabin crew may be demoted or moved into another position at a whim according to a leaked copy for a new contract that has been thrust on staffers.
The changes will, however, prevent many more cabin crew from losing their jobs and will give the Cathay Pacific group a fighting chance of survival. For the remainder of 2020, the airline group plans to operate less than 10 per cent of pre-pandemic capacity and its unlikely to top 50 per cent throughout the whole of 2021.
The Cathay Pacific Airways Flight Attendants Union said “fundamental changes” to crew contracts had cause unease amongst employees but thanked the airline for considering alternatives to forced redundancies.
