Cathay Pacific

Will Cathay Pacific face a pilot exodus to mainland airlines as it cuts salaries and benefits?

Better pay, lifestyle and roster could mean about 200 cockpit staff seeking greener pastures across the border, recruiters say

PUBLISHED : Sunday, 22 October, 2017, 12:31pm
UPDATED : Sunday, 22 October, 2017, 11:29pm

Mainland Chinese carriers are seeking to poach Cathay Pacific Airways pilots, capitalising on a cost-cutting drive by Hong Kong’s flagship airline to slash salaries and benefits.

Some 200 pilots from Cathay Pacific are considering their options with the likes of China Southern Airlines and Hainan Airlines after registering with a recruitment agency, according to a source.

This has contributed to cockpit recruiters for China’s major state-owned and private airlines making greater strides to woo Hong Kong-based pilots feeling disenchanted over salary cuts and wanting a better lifestyle.

Cathay Pacific to slash housing packages for pilots as part of ongoing cost-cutting drive

In an attempt to plug losses of HK$2.05 billion in the first half of the year, Cathay Pacific embarked on a three-year transformation plan to rein in costs which included 600 job cuts so far.

Last month, pilots at Cathay Pacific were told that they would face a salary freeze, pension changes and substantial cuts to housing allowances worth HK$1.2 million.

We have seen a spike in interest in recent weeks, numbering in the hundreds
Deborah White, recruiter

“Until last month, very few Cathay Pacific pilots have inquired, or made applications to Chinese airlines. However we have seen a spike in interest in recent weeks, numbering in the hundreds,” said Deborah White, marketing manager for Longreach Aviation, which recruits pilots for Chinese airlines. It will host recruitment briefings for Hong Kong pilots at the end of the month.

Longreach Aviation said two of its clients – China Southern and Hainan – would need an estimated 100 foreign captains to meet demand for expansion each year until 2020.

At least 200 experienced pilots from Cathay Pacific, out of a total of 250 applicants, have expressed interest in flying for mainland Chinese airlines.

Of Cathay Pacific’s 3,265 pilots, the average turnover rate remained “around” 2.5 per cent this year for resignations and retirements, a figure the company said was “manageable.”

However, the Hong Kong Aircrew Officers Association claimed its figures were double the official rate.

“Without doubt, the impending cancellation of the housing allowance agreement at Cathay Pacific will force pilots to look elsewhere,” union general secretary Chris Beebe said.

Pilot pay and pensions targeted as Cathay Pacific looks to slash HK$1 billion in costs

An exodus of pilots, however, could be beneficial for the carrier as it tries to reduce costs.

The company said it accepted that its brand, quality and reputation for safety made its pilots some of the “most sought after” among rival airlines.

“Our resignation rate and early retirement rate … are both a very manageable and in the appropriate range as we continue with our plans to recruit, train, and retain the appropriate mix of skilled pilots to meet our growth plans,” a Cathay Pacific spokeswoman said.

Our resignation rate and early retirement rate … are both a very manageable
Cathay Pacific spokeswoman

The airline said it was focused on implementing big changes to pilot pay as its cost structure was “out of line” with that of its competitors.

Hong Kong cockpit crew are in demand because their locally registered pilot licences come from schools with good reputations and they are familiar with flying in the region, according to Longreach Aviation.

A pilot moving to an airline across the border can expect a salary of up to US$280,000 (HK$2.2 million) a year after tax, a jump of about US$80,000 (HK$624,000). Other benefits include the lower costs of living on the mainland, and up to three months of leave.

“We forget [these also] motivate pilots and personnel,” said Jose Jimenez, a pilot recruiter and a captain for Beijing Capital Airlines. Jimenez said he expected more Hong Kong-based pilots to move to the mainland.

He added that another pull factor for pilots was a reliable roster that ensured they had more leisure and family time.

“We are in the early stages [of such movement in flight personnel]. If Cathay Pacific doesn’t correct this rolling back of terms and conditions – such as removing housing benefits – they are going to see this trend happen.”