Hong Kong airline Cathay Pacific has launched a resignation scheme that is asking frontline staffers, including locally based pilots and cabin crews, to volunteer to quit, with compensation said to be up to six months’ salary.
The carrier was still facing significant challenges amid the COVID-19 pandemic “despite some pockets of good news,” such as the Hong Kong-Singapore travel bubble, director of people Patricia Hwang said in an internal memo sent to staff on Wednesday and obtained by Apple Daily.
“We expect that we will continue to operate a very limited schedule in the near term,” Hwang wrote. “We must continue to manage our business prudently, balancing the need to manage costs and preserve cash with the need to prepare for the eventual recovery.”
She thanked colleagues who chose to leave for their contributions to the company.
A union leader at Cathay said that the exit scheme was on a voluntary basis without a quota. It was available only to frontline staffers, including cabin crews, ground staff and pilots, and excluded people working in the back office, said Zuki Wong, chair of the Cathay Pacific Airways Flight Attendants Union.
Volunteers for the scheme would get payouts that were about two to six months of salary, depending on their years of service, and the money would not be deducted from their pensions, Wong said, citing information provided by the company to the union.
Wong said the six-month cap on the compensation made the redundancy package unattractive to long-time staffers. She said the move had come too late, given the union had suggested the launch of a voluntary exit scheme before the carrier resorted to extensive layoffs last year.
In that exercise, Cathay cut almost 8,500 jobs worldwide in October, including 5,300 in Hong Kong. The compensation dished out at the time to people with 10 years’ service was understood to be equivalent to nearly 12 months’ pay, similar to a voluntary redundancy scheme the airline pushed in 2017.
Employees who did not get the axe but turned down the offer of a new contract because of its salary ceiling are losing out on the voluntary scheme this time, as they have already resigned. One of the staffers told Apple Daily that he tendered his resignation early this month with immigration in mind, so he would not get the payout that would have amounted to more than HK$100,000 (US$12,880).
Cathay shares fell 1.69% to HK$6.98 at 2:30p.m. on Wednesday.