Cathay Pacific has staved off the threat of Christmas industrial action by one of its key unions after cabin crew accepted its offer of a 4.5 per cent pay rise.
But the airline is in a race against time to reach a deal with its pilots' union - which has been authorised by its members to declare a work-to-rule campaign if there is no agreement.
The airline's pay rise is often seen as a benchmark for the rest of Hong Kong.
Cathay Pacific Airways Flight Attendants Union vice-chairman Julian Yau Chi-hung said the union had sought a 7.5 per cent rise. But its 6,000 members accepted the lower offer after the airline agreed to increase other benefits. "It is a bit different from what we demanded, but we have taken into account other benefits," Yau said.
Staff paid a fixed monthly salary would see their duty allowance, received for each flight they work on, go up 10 per cent.
Yau said about 40 per cent of all cabin crew were employed on monthly contracts. The level of allowance varied by destination, but most crew received about HK$3,000 per month in duty allowance, he added. Cathay switched from monthly salaries to hourly pay for new staff in 1996. Senior pursers on hourly-pay contracts would get a 10 per cent raise after five years in the job.
The airline has also agreed to study how to improve the housing allowance for non-local cabin crew. It has demanded that the airline cancel a cap limiting the allowance to the first eight years of a recruit's service.
But the union was disappointed the airline had not acted on its suggestion that the retirement age be raised from 55 to 65. Yau said management were concerned about the impact on promotion prospects for junior staff.
Cathay made a net profit of HK$24 million in the first half of this year.
Cabin crew last year called off a Christmas work-to-rule protest over a 2 per cent pay rise when other benefits were increased.
Cathay chief executive John Slosar said the airline strived to balance fair and competitive rewards for its crew with its overall financial situation.
"While our business has seen some improvement compared to the previous year, 2013 has still been a challenging year for our airline," he said.
There has been no deal yet with the 1,900-strong Hong Kong Aircrew Officers Association, which represents Cathay pilots.
Union members are prepared to declare "contract compliance", a type of work-to-rule protest. One pilot said Cathay would be badly affected as pilots would refuse to work on rostered days off. The pilot said many pilots, especially junior ones, would be called in on days off two or three times a month.