Cathay Pa­cific be­gins pi­lot wage talks un­der threat of in­dus­trial ac­tion

The Pak Banker - - Company& -

HONG KONG: Cathay Pa­cific Air­ways Ltd., Hong Kong's biggest car­rier, to­day be­gins pay talks with pi­lots who have voted for pos­si­ble in­dus­trial ac­tion as they seek raises.

The dis­cus­sions are ex­pected to last five days, Carolyn Le­ung, a Cathay spokes­woman said yes­ter­day by phone. She didn't say how much the pi­lots were seek­ing.

The union wants rises of more than 30 per­cent over the next four years and they could take ac­tion that would dis­rupt flights over the Christ­mas pe­riod, the South China Morn­ing Post re­ported yes­ter­day. Union mem­bers last month voted to al­low lead­ers to pos­si­bly rec­om­mend shun­ning over­time, while re­ject­ing calls for such ac­tion to start on Dec. 1.

"It's a cost in­crease that the air­line should be able to ab­sorb rather than hav­ing to face any pos­si­ble dis­rup­tions," said K. Ajith, an an­a­lyst at UOB-Kay Hian Re­search Pte in Singapore. "I would ex­pect the air­line to come to some com­pro­mise in the ne­go­ti­a­tions."

Ajith ex­pects the air­line's staffing costs to rise about 14.5 per­cent next year, he said. Last month, the car­rier an­nounced it will give Hong Kong-based staff an­nual pay rises av­er­ag­ing 4 per­cent and 4.5 per­cent. Staff will also re­ceive a 13th month bonus pay­ment and a prof­it­share pay-out.

Cathay's in­com­ing Chief Ex­ec­u­tive John Slosar said Dec. 7 he was op­ti­mistic the air­line would reach an agree­ment with the pi­lots.

"We are look­ing for­ward to con­struc­tive ne­go­ti­a­tions and a mu­tu­ally ac­cept­able agree­ment," John Findlay, as­sis­tant gen­eral sec­re­tary of the Hong Kong Air­crew Of­fi­cers As­so­ci­a­tion, said to­day by email. "The pay claim we sub­mit­ted was rea­son­able and is af­ford­able."

Cathay rose 2.8 per­cent to HK$23.95 at 11:06 a.m. in Hong Kong. The stock has risen 65 per­cent this year com­pared with a 6.7 per­cent gain in the bench­mark Hang Seng In­dex. The car­rier, the world's third-largest by mar­ket value, ex­pects to more than dou­ble profit this year to at least HK$12.5 bil­lion ($1.6 bil­lion), helped by re­bound­ing travel de­mand and the sale of stakes in an air-cargo han­dler and a main­te­nance com­pany.

In an­other news item, Air­bus SAS Chief Op­er­at­ing Of­fi­cer John Leahy and Erik Pil­let, the for­mer hu­man re­sources di­rec­tor at the Euro­pean Aero­nau­tic De­fence and Space Co. unit, were charged by a Paris in­ves­ti­gat­ing judge with in­sider trad­ing.

Leahy was placed un­der in­ves­ti­ga­tion Nov. 5, and Pil­let Oct. 1 af­ter they were called in for ques­tion­ing, said a spokes­woman for the pros­e­cu­tor's of­fice who de­clined to be named cit­ing of­fice pol­icy.

Crim­i­nal in­ves­ti­ga­tors are look­ing into al­le­ga­tions that as many as 17 cur­rent and for­mer EADS of­fi­cials en­gaged in in­sider trad­ing ahead of the an­nounce­ment about pro­duc­tion prob­lems that would de­lay the A380, the world's biggest pas­sen­ger plane. The re­port pre­cip­i­tated a 26 per­cent drop in the share price on June 14, 2006.

France's mar­ket reg­u­la­tor cleared the of­fi­cials and the com­pany of any wrong­do­ing in De­cem­ber 2009 in a par­al­lel probe. Leahy's lawyer Pa­trick Bernard and EADS spokesman Pierre Bayle de­clined to com­ment. Calls for com­ment to the men's of­fices weren't im­me­di­ately re­turned.

Leahy, 60, has been the one con­stant in Air­bus's top man­age­ment for close to two decades. He was hired six CEOs ago in 1985, and, as an Amer­i­can, is one of the few non-Euro­peans. Air­bus, the world's largest air­craft maker, is EADS's biggest unit.

Leahy sold 260,000 shares for 3.1 mil­lion eu­ros ($4.1 mil­lion) while ex­er­cis­ing his op­tions, and Pil­let sold 50,400 shares for 542,416 eu­ros, ac­cord­ing to a re­port by the Au­torite des Marches Fi­nanciers. Four for­mer ex­ec­u­tives in­clud­ing for­mer EADS co-chief ex­ec­u­tive of­fi­cer Noel Forgeard and one cur­rent of­fi­cial have also been pre­lim­i­nar­ily charged in the probe. The in­ves­ti­ga­tion be­gan af­ter EADS in­vestors filed a crim­i­nal com­plaint fol­low­ing the 2006 share price slide. -Bloomberg

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