Andrzej Jeziorski/SINGAPORE
Cathay Pacific Airways pilots have until 30 April to respond to an offer of stock options in exchange for a pay cut.
The Hong Kong Air Crew Officers' Association (AOA)has welcomed the extension of the deadline, from 6 April to 30 April. Cathay initially tried to bypass the union by presenting direct to pilots its plan for a salary cut in exchange for stock options that can be exercised in three years.
The proposal was originally sent out in letters to individual pilots on 16 March. The AOA responded angrily, claiming that Cathay was trying to prevent it from negotiating on behalf of its members. The company employed a similar tactic with the Flight Attendants' Union earlier in the year.
Hong Kong-based pilots are being asked to accept a pay cut of 8%, while those based in Australia, Canada and the UK are faced with a 27% reduction, which Cathay says will bring them in line with local pay scales. Stock options would be offered in proportion to the pay cuts.
According to Cathay, the airline approached the AOA several times, writing to the union on 29 October and 11 March, but received no response. "It was only after we did not have a response that we appealed to [the pilots] directly," says the carrier.
The company says that it is being forced to cut costs because of the Asian regional financial crisis and the recession in Hong Kong. Cathay recently reported its first full-year net loss in 35 years, ending the year HK$542 million ($70 million) in the red, compared with a profit of HK$1.69 billion a year earlier. Revenues dropped to HK$26.69 billion from HK$30.64 billion.
Pilots are suspicious, however, that Cathay is using the short-term financial crisis as an excuse to cut costs in anticipation of increased profits following an economic recovery.
Cathay has refused to release future financial estimates to allow pilots to decide whether the cuts are justified, says the union. Cathay counters that argument, pointing out that Hong Kong stock exchange regulations prevent a publicly listed company from releasing such estimates.
The airline says that meetings between the two sides continue, but declines to comment on their progress.
Source: Flight International
