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Sunday, Jul 05, 2020

Cathay Dragon offers 11 months’ unpaid leave, Cathay Pacific shelves cabin crew ‘extra pay’ as cost-savings plan kicks in

Offer of up to 11 months’ unpaid leave for cabin crew more popular than expected, union official says. Move comes with company set to reduce number of seats for sale in coming year

Cathay Dragon flight attendants have been told they can take the rest of 2020 as unpaid leave, while a lucrative pay scheme for cabin crew at Cathay Pacific has been suspended as the embattled airlines look to cut costs in the year ahead, the Post has learned.

Hong Kong’s de facto flag carrier, which has borne the brunt of seven months of anti-government protests – including a boycott by mainland Chinese customers – last week ran into stiff new headwinds as the growing coronavirus epidemic led to refunds being offered on flights to and from airports north of the border.

The company first told employees in November that it planned to cut capacity by 1.4 per cent in 2020, resulting in fewer flying duties for about 13,000 cabin crew and 4,000 pilots.

On Friday, it pointed to that “reduction of tasks”, as it informed cabin crew that a “high hours scheme” offering greater pay for those taking on heavier workloads would be shelved between March and June. The scheme involved flying 100 hours a month instead of an average of 70 to 80.

Cabin crew for Cathay Dragon, meanwhile, have been given the opportunity to take up to 11 months of unpaid leave, an offer flight attendants’ union official Matthew Chan said was “more popular than we expected”.

“Some want to spend more time with family or they have their own plans,” Chan, vice-chairman of the Hong Kong Dragon Airlines Flight Association, said.

“Not everyone is taking the whole 11 months; some are taking a handful. It is flexible and people pick whatever season they want to take leave,” he added, without specifying numbers.

Cathay Pacific is also seeking volunteers among experienced pilots, captains and first officers to take unpaid leave for up to two months in March and April.

Aircrew at that level are being offered stipends of up to HK$40,000 a month, a sum set aside for captains, and HK$30,000 for first officers. Even with those payouts, the move could help the airline save money as pilots earn a minimum of HK$1 million (US$129,000) for first officers and HK$1.8 million for captains annually.

The airline said it chose to offer the special leave during months when it already planned for “low operational demand.”

The airline confirmed the measures, saying it had offered pilots across Cathay Pacific and Cathay Dragon unpaid leave, and had “received a substantial number” of applications.

Pilots are also being surveyed on whether they would like to work a reduced roster, with one month on and one month off, the airline said, stemming from a request from senior Cathay Pacific pilots.

A company spokeswoman added: “We would like to reiterate that there is no compulsory unpaid leave for any employee groups.”

Cathay Dragon, which employs more than 2,000 flight attendants, is set to shrink, with plans to retire more aircraft than it brings in. It also has a greater exposure to the weaker Asia market, including mainland China, which has dragged the airline group down.

Luya You of brokerage Bocom International said the airline’s cost-saving efforts were sensible in the current climate.

“At face value, it could mean Cathay Pacific is less certain that non-China demand will remain low for that long. They do not want to be understaffed, so it’s possible they only want to offer unpaid leave for the months they’re certain are still looking dire,” the transportation analyst said.

She added expectations remained that demand would still be weak in the first quarter, though that was expected to stabilise, with a potential rebound by the end of the second quarter.

The airline has suffered amid citywide unrest since June last year, sparked by opposition to a now-withdrawn extradition bill. Frequent violent clashes between protesters and police have discouraged travellers from entering Hong Kong.

Visitor arrivals to the city dropped to 55.9 million in 2019, down 14.2 per cent on the previous year, according to official statistics. Cathay Pacific previously warned of a “highly challenging” 2020.

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