(Bloomberg) -- Cathay Pacific Airways Ltd., Asia's biggest international carrier, is in talks with its pilots over compensation as it seeks to cut costs after reporting its worst half-half loss in at least two decades.
The airline has been in discussions with its pilots over the past few months as part of its goal to become more competitive, the company said in an e-mailed statement Wednesday without elaborating. Its pilots are being urged to accept a freeze in their pay and changes to pension benefits to help the carrier cut HK$1 billion ($128 million) in costs, the South China Morning Post reported Wednesday, citing an internal memo.
“We will continue to work in a collaborative manner with an aim to come to an agreeable solution,” Hong Kong-based Cathay said in the statement. “The goal is to make Cathay Pacific a more competitive organization and to ensure the long-term sustainable future for the people of the airline.”
Cathay is facing mounting competition from budget carriers and deep-pocketed mainland rivals, forcing the marquee airline to attract passengers with discounts. Rupert Hogg, who took over as chief executive officer on May 1, announced the elimination of 600 jobs the same month as part of a three-year transformation program Cathay revealed earlier this year.
The carrier reported a net loss of HK$2.05 billion for the six months through June, potentially putting it on course for the first back-to-back annual losses in its 70-year history.
Cathay has reported losses only for three years since it was founded in 1946 -- once in 1998 in the aftermath of the Asian financial crisis; again, in 2008 as the global credit crisis unfolded; and, last year as a result of fuel-hedging bets gone wrong and intensifying competition.
To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net.
To contact the editor responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net.
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