Hong Kong’s Cathay Pacific chief promises better performance, admits flight cancellations ‘negatively impacted’ brand
- In a report to Civil Aviation Department, Cathay CEO Ronald Lam says airline underestimated level of reserve pilots necessary to cover absence caused by seasonal illness
- ‘This incident has negatively impacted our brand reputation and the confidence that Hong Kong people and our customers have in Cathay,’ he adds
Hong Kong flag carrier Cathay Pacific Airways has promised to improve operations, with its CEO admitting a recent wave of flight cancellations has negatively affected customer confidence and its brand reputation.
In an internal memo sent to all staff on Wednesday, Cathay Pacific CEO Ronald Lam Siu-por said the decision to cut flights until the end of February to ensure services were not disrupted over the busy Lunar New Year period was a setback.
“This incident has negatively impacted our brand reputation and the confidence that Hong Kong people and our customers have in Cathay,” he said.
“While it is a painful time for us all, we will not miss the opportunity to learn from it and improve.”
He added a review was under way to improve the carrier’s planning.
In a preliminary report on the flight cancellations submitted to the Civil Aviation Department on Wednesday, Lam said the airline had underestimated the level of reserve pilots needed to cover an increase in seasonal illness.
Lam said the decision to cancel flights until the end of next month was made to ensure the rest could go ahead as scheduled. All affected customers had been contacted and offered alternative flights or a refund.
Hong Kong’s Cathay Pacific to offer bonuses to pilots for Lunar New Year work
He promised measures had been taken to ensure reliable services over the Lunar New Year travel peak.
“We will provide a comprehensive report, including an update on progress towards our long-term improvement measures, to the Civil Aviation Department before Chinese New Year,” Lam said.
But in a memo dated December 30 and seen by the Post, the carrier also acknowledged that many pilots had reached or were close to hitting their limit of 900 flying hours during a rolling 12-month period.
Cathay axing a dozen flights a day on average until the end of February drew the ire of the government. Chief Executive John Lee Ka-chiu expressed concerns about the cancellations as flight capacity was key to maintaining the city’s status as an aviation hub.
The airline is suffering from a shortage of experienced pilots following pandemic-related lay-offs and pay cuts to remaining crew, which resulted in hundreds resigning.
Hong Kong’s Cathay group carries over 20 million passengers in 2023
Lam said the carrier had taken a range of measures to ensure people’s travel plans were smooth over the Lunar New Year holiday, such as increasing the number of reserve pilots.
Cathay is expected to post its first annual profit since 2019 in March, with the group’s second-half 2023 results anticipated to surpass those for the first six months. It posted a HK$4.26 billion (US$546 million) half-year net profit in August.
Last year, Cathay said all staff would receive profit-sharing bonuses for the 2023 to 2025 financial years.
In Wednesday’s memo, Lam promised a “meaningful amount” of profit would be shared with employees.
CEO of Hong Kong’s Cathay Pacific apologises for wave of flight cancellations
Shukor Yusof, founder of aviation advisory firm Endau Analytics, said Lam’s memo underscored how seriously he was taking the issue of low morale among staff and damage to the company’s reputation.
Yusof said he believed Cathay could overcome its problems, thanks to “the quality of the airline and the quality of the people”.
However, he said it was crucial for management to engage with its rank and file.
“I think longer term, Lam needs to ensure that he gets a buy-in from everyone involved, especially the pilots,” he said.
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The company has rolled out a series of incentives in the past week aimed at boosting the morale of cockpit crew, but the Cathay pilots union has called it a “piecemeal approach”. It said the airline needed to do more to recruit and retain pilots.
According to another memo issued on Tuesday and seen by the Post, the carrier said it would offer a new bonus to pilots who flew between February 7 and 18, amounting to 15, 25 or 30 per cent of their respective hourly flying rates, depending on the scheduled length of the flight.
Last week, the company said it would increase a cap on school allowances and commit to not increasing the mechanism for the annual target of flying hours – used to fix hourly rates of pay – this year or in 2025.
The carrier has also slashed the flying hours required for pilots to apply for captain training, adding an alternate path of 3,000 flying hours with at least 500 flights, potentially making it more attractive to some employees.
However, the Hong Kong Aircrew Officers Association, which represents Cathay pilots, said the number of captains and first officers for passenger flights stood at just 52 per cent of 2019 levels.
Hong Kong’s Cathay Pacific says captain training move targets short-haul pilots
It added these measures did not go far enough to attract and retain pilots, which would require improvements to the overall contract and rostering system.
Lam earlier this month said the number of flights had reached 70 per cent of pre-pandemic levels.
Cathay and its budget arm, HK Express, have set a target of a return to full passenger flight capacity this year.
