20,000 Hong Kong airline staff asked to take unpaid leave

17 Apr 2009,


HONG KONG: Hong Kong's leading airlines Cathay Pacific and Dragonair on Friday invited nearly 20,000 employees to take between one and four weeks of unpaid leave as part of a raft of cost-cutting measures.

Flight frequencies or seat capacity would be reduced on flights to Mumbai, London, Paris, Frankfurt, Sydney, Singapore, Bangkok, Seoul, Taipei, Tokyo, and Dubai, Cathay Pacific announced.

Dragonair will cut its passenger capacity by 13 per cent, reducing its services to Bengaluru, Busan, Sanya and Shanghai and suspending services to Fukuoka, Dalian, Shenyang, Guilin and Xian.

The sister airlines announced that they would cut flight schedules, axing some Dragonair flights to mainland China and cutting Cathay Pacific's London flight schedule by 17 a month upwards.

The cost-cutting moves came as the airlines announced that first quarter revenue on Cathay Pacific and Dragonair for passenger and cargo services fell 22.4 per cent from 2008.

Cathay Pacific said it would cut passenger capacity by 8 per cent and overall cargo by 11 per cent from May in response to the downturn.

All staff would, meanwhile, be invited to take between one and four weeks unpaid leave depending on seniority, although the airline stressed the leave would not be mandatory.

Cathay chief executive Tony Tyler said: "We have no option but to take measures that will help us weather the current storm and maintain the long-term sustainability of the business.

"Our staff are being asked to make sacrifices that will be needed to see the company through this violent storm. The pain will be shared from the top down."

Dragonair chief executive officer Kenny Tang said: "Our business has been badly hit since the financial crisis first began to bite late last year.

"We have seen a significantly reduced demand for premium travel and pressure on our passenger yield due to the low fares in the market.

"The cost-cutting measures we have initiated since the end of last year are clearly not enough so we have no alternative but to introduce further measures to help us preserve cash."

Unions representing pilots and flight attendants were on Friday still locked in talks with management over the unpaid leave issue and the other cost-cutting measures.

More than 1,000 Cathay Pacific flight attendants and around 200 pilots took voluntary unpaid leave when it was offered in December in an earlier move to reduce costs.

Cathay Pacific has 13,600 staff in Hong Kong and 3,400 staff overseas while Dragonair has 1,820 staff in Hong Kong and 680 staff overseas.