In early September that Cathay Pacific had turned its efforts towards cutting the costs of its compensation packages for its pilots.
Last Friday evening, the airline informed Hong Kong-based pilots their million-dollar housing packages would be slashed as part of the airline’s ongoing drive to reduce costs.
Some industry experts also believe the expatriate pay and benefits packages offered at Cathay Pacific are above market rates and will need a rethink.
According to an internal memo seen by the South China Morning Post, each pilot could lose perks worth up to HK$1.2 million annually. This cost-cutting move is expected to affect 43% of the airline’s 2500 pilots who are based in Hong Kong.
The timing of the decision to cut housing benefits makes it even harder to swallow with Centaline’s Centa-City leading index of home prices surging to record highs week after week. The financial pressure of accommodation has never been higher.
The airline said “significant savings” would be made from slashing the housing allowance of pilots. The current Accommodation and Rental Assistance Policy Agreement which benefited more than 1,000 cockpit crew, cost more than HK$900 million last year. Those who have been affected by the change will be given three months’ notice.
“This is simply not feasible in the current economic environment,” the airline’s flight operations director, Anna Thompson, said in a memo to the pilots on Friday night. The company said it had “no choice” as it was “faced with tough decisions”.