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Cathay Pacific to Close Pilot Base in Canada
Hong Kong’s Cathay Pacific Airways announced on April 22 that it will close its Canadian pilot base and has proposed to also shut down its pilot bases in Australia and New Zealand, putting hundreds of its employees’ jobs at risk.
No decisions have yet been made on the future of its pilots based in Europe and the United Sates, as all passenger fleet pilots on overseas bases had been stood down since May 2020 in light of the Covid-19 pandemic.
The decision to close the Canadian base is final, whereas those in Australia and New Zealand is still under proposal at this stage and will involve a good-faith consultation process with employees, Cathay said.
In Australia and New Zealand, employers must consult with employees before redundancies as part of union agreements but it is rare for publicly announced decisions to be reversed.
Qantas Airways and Air New Zealand made similar announcements last year about consultations before proceeding with their planned staff cuts.
“We have not made any decisions on bases other than Canada at this time nor any general decision on the future of bases – each base area will be considered on its own merits and any decision to close, maintain or restructure that base area will not have a bearing on any subsequent base reviews,” Deborah McConnochie, Cathay’s general manager for aircrew, said in a statement.
As part of a review of the Hong Kong flag carrier’s overseas cockpit crew operations, the airline might start transferring pilots to Hong Kong on a voluntary basis.
However, if the carrier chooses to transfer overseas pilots to Hong Kong, it would raise concerns as existing expatriate cockpit crew in Hong Kong are only receiving short-term work via approvals. The remaining Hong-Kong-based pilots and cabin crew had to agree to permanent steep pay cuts in exchange for job security.
Following the closure of overseas cabin crew bases and shutting down its regional airline Cathay Dragon last year, there is also a large group of unemployed local pilots, and this could mean the Hong Kong authorities blocking the transfer.
These moves come as the airline posted a record annual loss of HK$21.65 billion that was caused by a lack of international air travel, restructuring costs and fleet write-downs, causing the airline to further focus on preserving cash.
In addition, Cathay Pacific had to put more freighter crew on voluntary rosters of three weeks flying, two weeks in a hotel and two weeks off at home due to Hong Kong’s stricter quarantine rules. This resulted in an increase in cash burned by about HK$300 million to HK$400 million per month.
Suspended Europe and U.S-based pilots have been receiving half of their salary, while Canadian pilots were getting two-thirds. Since April 1 however, Cathay Pacific had not been paying its Australian crews.
“Covid-19 continues to have a devastating impact on our industry and our airlines,” says McConnochie, adding that, “following the record loss for 2020, all of the company’s cash preservation measures continue unabated. It is clear that we must continue to review all areas of the business to ensure we emerge competitively from this unprecedented global crisis.”
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