Cathay Pacific pilots and cabin crew agree to new contract to avert retrenchment

 Majority of pilots and cabin crew of Cathay Pacific have opted to sign new contracts which is necessary for the airline to survive. Around 2,613 pilots and 7,364 cabin crew, which represent 98.5% and 91.6% respectively have agreed to the new contracts in order to avert retrenchments.

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In October, Cathay Pacific has announced that it would be laying-off 6,000 of its employees and will be shutting down its regional affiliate Cathay Dragon or Dragon Air. 

Cathay Pacific also claims that the new contracts are competitive as the airline seeks to retain their pilots and cabin crew. It is also necessary as the airline rebuilds itself after it was badly affected by the Covid-19 pandemic.

Operating under 25% capacity

Cathay Pacific said that it had to scale back its capacity in order to match the travel demand. Presently, the airline is operating at under 25% of its capacity in 2019. It will also be operating below 50% capacity for the entire year.

According to a report from Asian Aviation, the company also said its “cash-preservation measures continue unabated”. Executive pay cuts will continue throughout 2021 and a third voluntary Special Leave Scheme for non-flying employees will be introduced for the first half of next year. There will be no salary increases for 2021 nor the payment of the annual discretionary bonus for 2020 across the board for all employees.

Cathay said the restructuring will reduce operating cash burn by about HK$500 million (US$64.47 million) per month, bringing it down to HK$1 billion-HK$1.5 billion per month.

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