jetset
4th Dec 2010, 03:01
HONG KONG—Cathay Pacific Airways Ltd., Hong Kong's flagship carrier, could be facing troubled skies just ahead of the holiday travel season.
Rejecting the airline's offer of an average salary increase of 4% to 5%, pilots authorized their union to start a work slowdown if a new round of salary negotiations starting Dec. 13 go badly.
Unlike a full-scale strike, in work-to-rule, employees only do exactly what their contracts stipulate, but nothing more. The union called the vote "a clear mandate" for industrial action if the negotiations don't progress "in good faith and in a timely manner."
One particular part of the pilots' vote for what's called "contract compliance" could be especially bothersome for holiday tourists. December is one of the heaviest travel seasons globally. The Hong Kong Aircrew Officers Association warned that if triggered, "they would not agree to perform additional work due to shortage of available pilots nor would they agree to work on their days off, as they often do now."
Cathay said in a statement that it was "disappointed" with the pilots' vote, noting that it doesn't create "an appropriate atmosphere in which to commence negotiations."
Cathay also warned that "it would be irresponsible to set reward levels at unrealistically high and unsustainable levels just because times are good today."
Times are indeed good at the airline. Investment banks have been raising up their forecasts for Cathay's share price after the airline announced that its full-year net profit would be at least 12.50 billion Hong Kong dollars (US$1.61 billion), more than doubling to a record high because of strong recovery in passenger and cargo service in the region.
"We are expecting an outstanding financial result following a very difficult period brought about by the global financial crisis," Cathay Pacific Chief Executive Tony Tyler said when the earnings were announced in mid-November.
The union vote on Tuesday came a day after other concerns for the airline. On Monday, a Cathay plane had to make an emergency landing in Kazakhstan after problems with an air pressure valve. The same plane had trouble with a different air pressure component in September, the airline said.
Cathay's negotiations with its pilots have hit snags before. In 2001, pilots engaged in a weeks-long work slowdown that cost the airline millions in expenses and lost passenger revenue.
Rejecting the airline's offer of an average salary increase of 4% to 5%, pilots authorized their union to start a work slowdown if a new round of salary negotiations starting Dec. 13 go badly.
Unlike a full-scale strike, in work-to-rule, employees only do exactly what their contracts stipulate, but nothing more. The union called the vote "a clear mandate" for industrial action if the negotiations don't progress "in good faith and in a timely manner."
One particular part of the pilots' vote for what's called "contract compliance" could be especially bothersome for holiday tourists. December is one of the heaviest travel seasons globally. The Hong Kong Aircrew Officers Association warned that if triggered, "they would not agree to perform additional work due to shortage of available pilots nor would they agree to work on their days off, as they often do now."
Cathay said in a statement that it was "disappointed" with the pilots' vote, noting that it doesn't create "an appropriate atmosphere in which to commence negotiations."
Cathay also warned that "it would be irresponsible to set reward levels at unrealistically high and unsustainable levels just because times are good today."
Times are indeed good at the airline. Investment banks have been raising up their forecasts for Cathay's share price after the airline announced that its full-year net profit would be at least 12.50 billion Hong Kong dollars (US$1.61 billion), more than doubling to a record high because of strong recovery in passenger and cargo service in the region.
"We are expecting an outstanding financial result following a very difficult period brought about by the global financial crisis," Cathay Pacific Chief Executive Tony Tyler said when the earnings were announced in mid-November.
The union vote on Tuesday came a day after other concerns for the airline. On Monday, a Cathay plane had to make an emergency landing in Kazakhstan after problems with an air pressure valve. The same plane had trouble with a different air pressure component in September, the airline said.
Cathay's negotiations with its pilots have hit snags before. In 2001, pilots engaged in a weeks-long work slowdown that cost the airline millions in expenses and lost passenger revenue.