Around 674 cabin crew for Hong Kong-based airline Cathay Pacific have refused to sign new salary slashing contracts according to data supplied by the carrier on Wednesday. The cabin crew will now have their employment with the airline ‘terminated’ after a deadline to sign the new contracts lapsed on Wednesday night.
Just over two weeks ago, the Cathay Pacific Group announced a major restructuring as it seeks to cut costs in response to the continued pressure being felt from the Corona crisis. As part of the restructuring, the company closed regional subsidiary Cathay Dragon with immediate effect.
Nearly 8,000 employees, including all of Cathay Dragon’s cabin crew were laid off, while the vast majority of the airline’s pilots were also made redundant. Staffers at the mainline Cathay Pacific, meanwhile, were presented with new, more “competitive” contracts that the airline said were essential to secure the longterm future of the business.
Despite pleas from the Cathay Pacific Flight Attendants Association not to impose any permanent cuts and instead review the situation in six months time, Cathay Pacific management refused to concede and issued an ultimatum to staff who hadn’t yet signed the contract.
The union claims pay cuts amount to between 20 and 40 per cent, dependent on length of service and grade. Sweeping changes have also been made to terms and conditions as Cathay Pacific looks to slash overheads. Pilots face a salary reduction of as much as 60 per cent.
A last-ditch meeting between the unions and Cathay Pacific management at the Labour Department on Wednesday failed in finding any common ground between the two sides despite talks draggin on for three and a half hours of talks.
“Following the end of the consent period last night (4 November), Cathay Pacific announces that 2,613 pilots and 7,346 cabin crew have signed on to the new conditions of service. This represents 98.5% of pilots and 91.6% of cabin crew who were asked to agree to the new contracts,” the airline announced on Thursday.
“We are very grateful to those who have accepted the new contracts. 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. We look forward to engaging closely with all of our people as we start to focus on the future,” the statement continued.
Cathay Pacific said it “respected” the decision of pilots and cabin crew who “decided not to join us.” The airline said it would offer leaving terms that went beyond statutory requirements.
Unlike some airlines, Cathay Pacific has no domestic network and is heavily reliant on long-haul international travel. The Corona crisis has decimated its business and the airline currently forecasts offering less than 50 per cent of its pre-COVID capacity throughout the whole of next year.
