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SYDNEY: Hong Kong’s Cathay Pacific Airways decision to permanently force pilots to contract lower-paying contracts or risk losing their jobs is “draconian” and “myopic,” the chief of the union that represents them.
The airline announced plans Wednesday to cut 5,900 jobs to help it weather the COVID-19 pandemic, including nearly all positions at its regional airline Cathay Dragon, which has closed.
It is also seeking changes to its contracts with pilots and cabin crew as part of a restructuring that would cost HK $ 2.2 billion (US $ 283.87 million).
Staff members of many airlines around the world have agreed to temporary pay cuts to help their companies weather the COVID-19 crisis.
READ: Cathay Pacific to downsize its workforce and kill the Cathay Dragon brand due to COVID-19
At rival Singapore Airlines, pilots agreed to pay cuts, including up to 28.5% for most captains and up to 18.5% for most first officers through March 31, 2022 to avoid further job losses.
“The vast majority (of other airlines’ pay cuts) are tied to a benchmark such as a point in time or profitability,” said Hong Kong Crew Officers Association (HKAOA) secretary general Chris Beebe, in an interview. At Cathay, he said, the cuts are “completely open and perpetual.”
HKAOA said that under the new contracts, Cathay will no longer need to follow the “last in, first out” principle used by most legacy carriers, with newer ones losing their jobs first.
That would allow it to target pilots for cuts based on the type of aircraft flown, which would be more financially and operationally efficient as it continues to review its fleet plans.
The new contracts, similar to those for new hires since 2018, also offer pay based more on flight hours than before, leading to much lower wages in periods when the airline is mostly inactive.
The extent of the pay cut depends on the oldest contract the pilot had, and a Cathay pilot told Reuters, on condition of anonymity, that he expected a reduction of around 40 percent.
READ: From travel to nowhere to ‘flight lessons’, how airlines stay afloat amid COVID-19 pandemic
“By imposing these things, you will undoubtedly erode goodwill,” Beebe said. “The arrogance of the company and the way they have approached this will be remembered for years to come.”
Cathay President Patrick Healy told the media Wednesday that the new terms were “highly competitive” with those of its global peers. The airline did not respond to a request for comment on Friday.
Luya You, an analyst at BOCOM International, said that the new contracts could have greater acceptance than expected given the soft market for aviation professionals, but that there was a risk that employees would leave when conditions improved.
Pilots who do not sign the new contract will be fired with a three-month pay instead of being fired with a six-month pay, Beebe said, adding that the union was receiving legal advice on the matter.
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