Speech on move to resolve pilots' pay dispute
09 Jul 2001
By Tony Tyler, Director Corporate Development
- Ladies and gentlemen, thank you for joining us here again today. We have some important announcements to make. Let me begin however by recapping briefly on how we reached the current situation in this industrial dispute with the pilots' union.
- As you know, we are in the middle of a three-year signed agreement with the pilots' union. This agreement has only run for two years and there is still a year to run. Yet the union has seen fit to make demands for salary increases and provident fund improvements of up to 32%. Such demands are completely unjustified and out of touch with the realities of Hong Kong and the global economy.
- We have tried months of negotiations but have been repeatedly rebuffed. Only recently, we made the union a very generous offer including pay rises, as well as improvements in benefits, overtime pay, and rostering. Sadly the union rejected this offer without even referring it to its members.
- Regrettably, the AOA leadership chose, instead, to launch a campaign of industrial action that seeks to severely disrupt the airline and Hong Kong - a campaign aimed at maximising inconvenience and uncertainty for the public. In the AOA's words, their "prime strategy is to use guerrilla-style tactics".
- This action has already seriously affected the airline, our passengers and the wider Hong Kong public. The AOA has said very publicly that it wants to escalate the action further and is prepared to prolong this agony. Again in the union President's own words, their "strategy is based on incrementally increasing the pressure". And they are prepared to "continue this way for three months, six months, nine months or a year".
- Cathay Pacific simply cannot stand by and allow the AOA's selfish action to cause such damage. Nor is Hong Kong prepared to tolerate such disruptions by the AOA on what seems to be a repeated basis. Under the circumstances, we need to take prompt and firm action to resolve the situation for the good of all of our employees, our customers, our shareholders, the tourism industry and the whole of Hong Kong.
- Therefore after extremely careful consideration, we have decided on two courses of action.
- First we have determined that we will implement a new pay, benefits and rostering package for our pilots. From today, our pilots will benefit from an improved pay, benefits and rostering package.
- This package includes pay rises of up to 9%, increased education, housing and maternity benefits, and improved rostering practices. The package will be introduced with immediate effect -- although elements of the overtime pay and rostering will, for administrative reasons, be phased in by November.
- Regrettably, this package is not quite as generous as the proposal we made to the union leadership at the end of June. This is because, frankly, there is less money available as a result of the damage done to the company by the union's industrial action.
- We believe most of our pilots want to work for the success of the company. This package will reward them for doing so. We were frustrated that the union leadership blocked our earlier proposal. Based on feedback from crews, we believe they will welcome the additional incentives and other improvements in the new package.
- This brings me to our second announcement. Sadly, we have also taken the very painful decision to terminate the employment of 49 of our pilots. This is in addition to the three cases previously announced.
- Thus, today we have issued letters of termination to these pilots. In accordance with their Conditions of Service and the Employment Ordinance the pilots will all receive three months wages in lieu of notice. Those affected include 23 Captains and 26 First Officers. The average years of service of these officers are 8 years, ranging from 18 months to 22 years.
- We have taken this very serious step only after extremely careful consideration. We have undertaken a detailed review of the employment history of all our pilots and identified those who, we feel, cannot be relied upon to act in the best interests of the company in the future. We have, essentially, lost confidence in those employees who have been terminated and decided that their continued employment with the company is no longer in the best interests of the company as a whole.
- Clearly, all our other staff will be very concerned about today's decision to terminate some pilots' employment. However -- and this is very important - I can give an assurance that we will not be laying-off any cabin crew or ground staff as a result of this action.
- This situation is, I am sorry to say, one of those where we, our staff, our passengers and our customers, must regrettably endure some short-term pain for the long-term benefit of the company.
- Hong Kong is tired of being held to ransom. The time has come for prompt and resolute action. That is what we have done. We must now move on and apply our efforts to the important task of resolving this issue so we can rebuild the airline's reputation and restore public confidence.
- We sincerely apologise to the Hong Kong community for the inconvenience and stress that the AOA's industrial action has caused. We thank everyone in Hong Kong for their patience and continued support -- something we know we can never take for granted.
- Thank you ladies and gentlemen. We would now be happy to take your questions.