Bloomberg News

Cathay Pacific Union Threatens Industrial Action

December 03, 2012

Cathay Union Threatens Industrial Action in Absence of Talks

Cathay has unveiled cost-cutting measures including banning spending on festive gatherings, scrapping a management conference and cutting entertainment spending to a “bare minimum.” Photographer: Jerome Favre/Bloomberg

Cathay Pacific Airways Ltd. (293)’s flight attendants union, which represents more than 5,800 airline cabin crew members, threatened industrial action if the carrier doesn’t agree to hold wage talks by 3 p.m. today.

The Flight Attendants Union will set up a preparation committee for possible action including work to rule or a strike if the carrier declined the demand, Tsang Kwok-fung, a spokesman, said by phone today. Elin Wong, a spokeswoman for the airline, didn’t immediately respond to an e-mail seeking comment.

More than 100 flight attendants staged a rally at Hong Kong’s airport yesterday after the company said last week it will raise salaries by about 2 percent next year, less than the 5 percent sought by the workers’ union. Cathay yesterday reiterated its position on pay increments and urged the union to remain calm and put the interest of the public first.

Shares of the carrier fell 0.8 percent to HK$13.30 as of 11:40 a.m. in Hong Kong today. The city’s benchmark Hang Seng Index was little changed.

Cathay Chief Executive Officer John Slosar told staff last month the airline faces a “very challenging year” and must cut expenses as it contends with rising fuel costs, declining fares and a cargo slump caused by the economic slowdown.

Hong Kong’s government last month increased its forecast for the city’s full-year inflation rate for 2012 to 3.9 percent from 3.7 percent, citing higher global food prices, the impact of quantitative easing in advanced economies and a renewed pickup in housing rental costs. The CPI increased 3.8 percent in October from a year earlier.

Cathay, which reported a first-half loss, has unveiled cost-cutting measures including banning spending on festive gatherings, scrapping a management conference and cutting entertainment spending to a “bare minimum.”

To contact the reporters on this story: Jasmine Wang in Hong Kong at jwang513@bloomberg.net; Simon Lee in Hong Kong at slee936@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net


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