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Statement on improved pilots' package (Updated as of HKT16:30)
10 Jul 2001
By Tony Tyler, Director Corporate Development
Thank you for joining us once again.
Today, I want to give you a brief update on our operations and the degree of success we have had in bringing our schedule under control since the effects of Typhoon Utor and the AOA's industrial action. We have also had a number of questions about the improved pay, benefits and rostering package we implemented yesterday and I would like to give you more details on that item.
First let us look at our operations.
As you know, we took the decision last week to reduce our schedule by approximately 20 percent. We did this because it is crucial for our passengers to be able to rely on Cathay Pacific to get them where they want to go. Frankly, we would rather operate a smaller, certain schedule than have a larger schedule which cannot be relied on due to the disruption as a result of the AOA's industrial action.
To further increase the certainty for our customers, we also took the decision to charter a total of 17 aircraft, and we are working with other carriers to mount extra flights as needed.
Because of our decision to cut the schedule and bring in charter aircraft, the level of flight disruptions and delays has been considerably reduced. And this is despite the fact that short-term sickness levels have roughly doubled since industrial action began on 3 July. Sickness levels today remain high but have not increased compared to yesterday.
Today we plan to operate a total of 114 flights out of our original schedule of 143. So far today, 11 flights have experienced delays of 15 minutes or more and, among them, 2 flights had delays of 90 minutes or more. This is an improvement compared to yesterday, when a total of 49 flights experienced delays of 15 minutes or more and 10 flights experienced delays of 90 minutes or more.
If this improvement continues and, frankly, that rather depends on what the AOA decides to do next, we will be aiming over the next few weeks to add additional flights so we can get back to our normal schedule.
We sincerely apologise for the inconvenience that the AOA's industrial action has caused to passengers.
I would now like to say a few words about the improved pay, benefits and rostering package we implemented yesterday:
Yesterday we announced that we are implementing a new pay benefits and rostering package for our pilots. Some reports have suggested that this has been "imposed" on our pilots as if there was something disadvantageous. That is not the case. This package we have implemented contains improvements in all areas, and will, we believe, be welcomed by our pilots.
The new package includes pay rises of up to 9% for some pilots, increased education, housing and maternity benefits and improved rosters.
The new package incorporates a new form of incentive pay "Hourly Duty Pay".
For senior pilots recruited before 1993, this will be an effective pay increase of approximately 4%, more than offsetting the third year of pay concessions agreed in 1999.
For pilots who joined after 1993, this incentive pay will represent an additional pay increase of about six percent which, on top of the three percent pay rises already agreed and implemented for this year, will result in an overall pay increase for these pilots of up to nine percent.
In addition the company has introduced additional overtime pay at 1.5 times the normal hourly rate for pilots who work between 84 and 92 hours a month, and at 2.5 times normal pay for hours worked between 92 and a 100 hours a month. It is up to the individual pilots to decide if they want to work more hours for more pay.
In addition, we have made a number of improvements in benefits including enhanced medical cover, housing and education allowances.
Overall the value of this package to pilots amounts to well over HK$200 million a year. That is a generous package, and all the company can reasonably afford.
Thank you for your attention. We would now be happy to take any questions.