Cathay Pacific’s trainee pilots appeal against lower pay package, but airline says no returning to more generous earlier terms

Cathay Pacific is looking to rein in pilot expenses.

Cathay Pacific Airways has rejected a plea by its cadet pilots to reverse a decision to shrink pay and terms for newly qualified aircrew.

In a letter to the airline’s management, 95 trainees asked to be given the terms they expected when they signed on for their 55-week training programme.

They have been undergoing training in Adelaide, Australia, since Nov 2017 and expect to finish from Dec this year, after the new contract takes effect. Those who complete their training successfully will start as second officers, the lowest rank of pilot.

In an overhaul of pilots’ pay and benefits aimed at cutting costs and raising productivity, the loss-making airline announced in Sept that the package for new pilots would be trimmed, in the first major effort to rein in aircrew expenses.

New second officers would continue to receive HK$538,000 (US$68,600) annually in their first year, but would get less in subsequent years than those on the old terms, according to cadets who have seen the different pay scales. The airline initially said cadets would have to pay half of the HK$1 million cost of their own training, but this was later dropped.

Unhappy with the prospect of earning less, the trainees appealed, saying they had given up other jobs to pursue their passion for flying, and signed up based on the offer made by Cathay Pacific at the time.

Some suggested the airline had misled them by showing them the 2008 pilot contract, referred to as COS08, stating the previous pay and terms for second officers.

In their letter earlier this month to general manager of flying Peter Clemmow, who oversees cadet training, the trainees asked the company to consider keeping the COS08 terms for their batch of cadets.

“This is due to the fact that all of us and our families based our career expectations and future plans around COS08 prior to applying for the Cadet Pilot Programme and taking up the training offer,” the letter said.

The trainees were told in Sept they could either accept the new terms in the airline’s 2018 contract, COS18, or quit training.

One cadet said: “It’s OK to launch the new COS18 contract if Cathay sees it as necessary. But they shouldn’t impose it on those already in Adelaide for training. That’s just not right or ethical.”

He said the trainees made a “decision of a lifetime” and chose to join Cathay Pacific after considering the airline’s offer of training, which came with a copy of the 2008 contracts, including pay scales stated in full.

“The 2008 contract was said to be for reference. But the difference between the two contracts is just too drastic,” the cadet said.

In response to cadets in an email earlier this month, Clemmow acknowledged their “understandable request”, but made clear there would be no change to their pay and terms when they start flying.

He said Cathay would start hiring experienced pilots from Dec 2018 on new, lowered terms, and it would be “unmanageable” to keep the cadets on the old terms.

By the time the trainees qualify, he added, Cathay would be well into implementing its restructured terms for pilots.

He reminded them the airline had already taken “exceptional” action by dropping its earlier proposal to make the cadets pay half the cost of their training.

A Cathay Pacific spokeswoman said in a statement: “We will continue to communicate with our cadets directly. [The new contract] has now been in the market for a little over a month and we are very encouraged by the response from both cadets and direct-entry pilots.”

The airline did not answer questions on the gulf in pay for pilots signed on contracts in 2018 versus 2008, nor on the estimated loss of earnings for cadets and potential savings for the company. It did not address cadets’ suggestion that they were misled before signing on with the carrier.

Relations between the airline and its pilots have of late been strained, with both sides locked in a four-year dispute over pay and benefits. A pilots’ union survey earlier this year found that two-fifths of Cathay pilots were considering leaving.

Cathay has 3,300 pilots, most based in Hong Kong with hundreds more overseas. Several hundred others work for sister airline Cathay Dragon.

The Hong Kong carrier has been forced to restructure after facing tough competition, and has been in the red for two years in a row.

It hopes to cut HK$4 billion from its costs by 2019, with HK$1 billion cut from pilot costs.

It announced in Sept it would introduce new terms for flying crew from Dec 1. Sources at the airline said changing from the 2008 contracts to the 2018 ones would cut about 30 per cent of pilot costs.

From Dec 1, up to 30 per cent of a pilot’s salary will be variable and tied to the number of hours flown. The current variable portion is only 10 per cent.

First officers will continue to rake in HK$825,000 in annual basic pay. The annual basic pay for captains will be “aligned with market levels” to HK$1.8 million.

There are wide differences in the allowances Cathay Pacific pilots receive, depending on when they joined.

Most receive between HK$32,000 and HK$70,000 a month for housing, but a minority still get HK$100,000 every month. Those who joined after 2008 receive a lump sum of HK$10,000 a month on average.

In the revamped package, new second officers will receive HK$14,000 a month for housing, and captains HK$30,000.