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Cathay CEO says Airline Willing to Extend Talks with Pilots over Cuts

Cathay CEO says Airline Willing to Extend Talks with Pilots

2018 06 19

2018 06 19

Cathay Pacific CEO Rupert Hogg Says Airline Willing to Extend Talks with Pilots over Cuts - But Won't Confirm If It Can Wait until 2019


By Danny Lee, South China Morning Post 

Cathay Pacific Airways has indicated it could extend negotiations with pilots to resolve a long-standing impasse over cutbacks - but would not say whether it would wait until next year.

The airline's chief Rupert Hogg, who rose to the top post last May, said management and the pilot's union had set a timetable to achieve a deal.

Negotiations between pilots - who make up about 13 per cent of employees - and the loss-making carrier over pay and changes to flying schedules have been going on for almost four years.

The Hong Kong Aircrew Officers Association (HKAOA), which represents most of Cathay's 3,300 pilots, have been fighting for better working hours to reduce fatigue, while Cathay, looking to reduce HK$4 billion from its books by 2019, has been pushing for cuts that would amount to HK$1 billion. Talks stalled last November.

"When we agreed to talk, we agreed that we'll set ourselves a timetable and if we get to a certain point that we need some more time, we'll take some more time," Hogg said in an interview with the Post on the sidelines of a global aviation summit in Sydney last week.

There have been two more rounds of talks since the end of April, union sources said, but Hogg declined to say whether the airline would allow for talks to continue into next year out of respect for the ongoing discussions, he said.

However, union sources familiar with the recent meetings said an agreement was still a long way off, as there had only been progress on one of the four major burning issues, with the pilots looking to match or improve upon a failed 2016 offer - the closest each side had got to finalising a deal.

The talks have taken place as mainland Chinese carriers in particular make overtures to pilots to lure them away from established airlines to feed their own expansion, amid a shortage in the industry.

Similarly, while the airline has been firmly losing money since 2016, it recorded a smaller-than-expected loss of HK$1.25 billion loss last year and notched up a profit in the second half of 2017.

The silver lining in the company's earnings could mean pilots were less likely to accept financial restraint.

Asked to describe the progress made by Hong Kong's largest airline, halfway through its three-year turnaround plan, Hogg said it was "on track" to achieve profitability targets by the end of 2019. The airline cut 600 jobs and delayed delivery of planes, among other things, as part of restructuring.

"We have got a lot of work to do and this is not an industry that is easy to produce consistent results," said Hogg. "We have a long way to go but we have made a lot of progress in areas against our plan and to that extent we are on track."

The CEO of Cathay Pacific's third largest shareholder Qatar Airways, which owns a 9.94 per cent stake, also spoke to the Post on the sidelines in Sydney of the International Air Transport Association (IATA) annual gathering. He said it endorsed the restructuring of the Hong Kong carrier and threw its full weight behind Cathay's 55-year-old British CEO.

Akbar Al Baker, the CEO of the Doha-based Middle East carrier, said he was "very satisfied" with the restructuring describing Rupert Hogg as a "very good" CEO.

"We fully support what [Hogg] he is doing to turn around Cathay Pacific and the turnaround is giving results already, said Al Baker.  "Good," responded Hogg, to Al Baker's complimentary remarks.

Qatar, which described itself as a "strategic investor" looking to profit from its stake in Cathay, also offered to give any support the airline wanted.

"If tomorrow, Cathay Pacific requires any assistance from us, yes as a shareholder, we would always be there to assist them, regardless what kind of assistance they require from Qatar Airways," Al Baker also said.

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