'Cathay Cuts Futile As Fuel Hedging Costs Billions'

The Confederation of Trade Unions and the Aviation Staff Alliance have slammed Cathay Pacific's move to sack thousands of employees, asking if saving HK$500 million a month through job cuts will help them after the company lost billions of dollars on fuel hedging in the past.

Cathay Pacific on Wednesday announced that it will eliminate 8,500 staff roles and stop operating its regional subsidiary Cathay Dragon as a part of its restructuring.

Carol Ng, chairwoman of CTU, questioned whether the savings from the job cuts could really aid the company’s survival.

“It’s actually not helpful to Cathay's situation. The fuel hedging losses is about HK$6.5 billion every year. How could that feed this company? It’s unreasonable,” she said.

“If there’s a need for redundancy, they need to exhaust every single avenue of cost-saving measures before they enter any redundancy plan.”

Cathay reported a fuel hedging loss of HK$1.6 billion for the first half of this year, partially offsetting a reduction in fuel costs of almost HK$9 billion due to lower prices and a reduction in services. It reported hedging losses of HK$6.4 billion in 2017, and larger losses in the previous two years.

Ng also said the new contracts being offered to flight attendants and pilots are aimed at silencing them, as their probation period will be a year long.

“It’s obviously a complete wipe-out of the old contracts within this company. In the past, there were so many legal cases against Cathay Pacific in terms of employment. Some are related to holidays, holiday payments and also union rights. Now, with these contracts, all these rights will be removed.”

The unions called on those spared from the sackings not to sign the new contracts just yet before they have studied thoroughly the new terms and conditions.

Members protested outside the headquarters of Cathay’s parent company, Swire, accusing the two airlines of forgetting their social responsibilities and betraying their employees at a difficult time.

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