Pilot pay and pensions targeted as Cathay Pacific looks to slash HK$1 billion in costs
Memo discloses almost half of company’s HK$19.7 billion spending on staff costs last year was on pilots – who represent 14.6 per cent of the workforce
Cathay Pacific is urging its pilots to accept pay freezes and changes in pension benefits to help Hong Kong’s flagship airline slash HK$1 billion (US$128 million) in costs amid an ongoing restructuring of the business.
An internal memo, released on Tuesday, revealed that almost half of the company’s HK$19.7 billion spending on staff costs last year was on pilots, who represent 14.6 per cent of the 26,670-strong workforce.
The memo said Cathay was seeking a 10 per cent reduction target by 2019 through a pay freeze, unspecified pension “changes” and productivity improvements.
Anna Thompson, the airline’s director of flight operations, warned the current costs were “too high”.
“To turn this company around, it is clear that we need to reduce our cost base quickly and by a significant amount and also make productivity gains,” Thompson, who sits on the airline’s management board, said.
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The pilots’ union is expected to scrutinise the financial situation of the airline independently before considering the cost savings.