Orient Aviation Daily Digest: Cathay Pacific Group cockpit and cabin crew overwhelmingly accept reduced pay and benefits packages

November 5th 2020

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November 5, 2020

• Cathay Pacific Group said today 98.5% of pilots and 91.6% of cabin crew had agreed to reduced base pay and allowances in a company restructure prompted by COVID-19. Read More » The group said 2,613 pilots and 7,346 cabin crew had signed on for the new conditions of service. "For those who decided not to join us, we respect their decision," the airline group said. "These staff will be offered packages that go beyond statutory requirements. None of the severance payments will be offset against pension contributions and staff will be reimbursed for any unpaid leave they took in 2020."
  
  The Cathay statement reaffirmed previous forecasts that passenger capacity would be well below 25% of 2019 levels in the first half of calendar 2021 and below 50% for the 2021 year. "We would like to reassure the travelling public we have adequate manpower to operate our planned flights throughout 2021," the company said.

• The International Air Transport Association (IATA) said overnight passenger demand remained highly depressed in September with revenue passenger kilometres (RPK) down 72.8% compared with a year earlier. This was a slight improvement from the 75.2% year-on-year decline in August, IATA's monthly traffic report said. “We have hit a wall in the industry’s recovery," IATA director general and CEO, Alexandre de Juniac, said. Domestic markets were doing better due to growth in China and Russia, he said, but this was insufficient to sustain a general recovery given domestic flights represented a third of total traffic.
  
  IATA's monthly cargo report, also published overnight, showed cargo tonne kilometres (CTK), a measure of demand, declined 8% in September compared with a year earlier. This was above the 12% year-on-year fall recorded in August. "Favourable indicators for the peak year-end season will support the continued recovery in demand," de Juniac said, referring to industry surveys that show a return to new export orders growth and the World Trade Organisation's (WTO) upward revision for 2020 trade growth forecasts.

• Lion Air Group’s Malindo Air, headquartered in Malaysia, intends to eliminate 2,647 jobs due to COVID-19, local media reported yesterday, citing figures from the country's Ministry of Human Resources. The latest measure followed a March imposition of 50% pay cuts and compulsory unpaid leave for selected staff at the carrier.

• The announcement yesterday that travel restrictions would be eased between the Australian states of New South Wales and Victoria prompted Qantas and Jetstar to announce scores more flights between Melbourne and Sydney. Before the onset of COVID-19, the route was one of the busiest city pairs in the world. Qantas said the two carriers would operate a combined 137 flights a week between the two cities from November 23, the day quarantine restrictions are to be lifted between the two state borders. Until that date, the group will continue to fly 10 times a week between Australia’s two largest cities.

• India's Ministry of Civil Aviation has extended a 60% capacity restriction for the country's domestic carriers to February 24, 2021, local media reports. The restriction was due to expire on November 24. When the government allowed domestic flights to resume in May, capacity was limited to 33%. The limit was increased to 45% in June and to the current 60% from September 1.

• AirAsia X (AAX) said in a regulatory filing to the Bursa Malaysia yesterday it had agreed to Malaysia Airports Holdings Berhad (MAHB) being classified as a secure creditor as part of the long-haul LCC’s proposed debt restructuring. In October, MAHB filed a writ of summons and statement of claim against AAX in the High Court of Kuala Lumpur to recover 78 million ringgit (US$187.95 million) in outstanding charges. It argued it was pursuing its legal right to recover the debt that was critical for the upkeep and maintenance of its airports. AAX said yesterday the revision was "made in the interest of time, without prejudice to AAX’s rights to defend and seek the appropriate remedies in the writ action and in order for the court convened meetings to be held as soon as possible for the creditors to consider and vote on the proposed debt restructuring".