Cathay pilots to take action

General secretary John Findlay and senior pilot Nigel Demery

HONG KONG, China -- Disgruntled Cathay Pacific pilots have vowed to take "limited industrial action" at the start of July, raising fears of flight disruption and lost revenue.

The pilots accuse Cathay of discrimination against employees, saying those hired before 1993 were being treated differently from those hired later.

They are also pressing for a new "rostering" agreement that would keep pilots from being overly jet-lagged.

Management has agreed to forego a third year of pay cuts to settle the labor dispute, but said pilots wanted more money through a pay raise of as much as 32 percent.

A Cathay Pacific spokeswoman said that the airline's pilots are the best-paid in the industry.

But pilots cited the airline's HK$5 billion (US$641 million) record profit in 2000.

Cancelled flights beginning July, a busy month for air travel, would cost Cathay Pacific some $5 million a day.

Talks with management will continue on Thursday with the labor department as arbiter.

Sense of frustration

The pilot union's General Secretary John Findlay said that Wednesday's motion for "limited industrial action" was heavily supported, with 996 votes in favor and 81 against.

VIDEO CNN's Lian Pek speaks to the Hong Kong Aircrew Officers Assocation's John Findlay Play video (QuickTime, Real or Windows Media)

Findlay said the vote reflected the pilots' "sense of overwhelming frustration."

The Hong Kong Aircrew Officers Association (HKAOA), which represents 1,200 of Cathay's 1,400 pilots, did not say what particular actions were being planned.

Past actions included "sick-outs" and work slowdowns that disrupted flights.

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In a 1999 pay row, pilots staged a costly two-week "sick-out" and forced the cancellation of hundreds of flights.

Cathay countered by laying on a fleet of more than 30 chartered aircraft to maintain part of normal services. The operation cost about HK$500 million (US$64 million).

Cathay director of corporate development, Tony Tyler, said the traveling public "is being held to ransom here," but added that it was important to focus on negotiations.

'Negotiating tactic'

Tyler said he expected the pilots to vote for industrial action and called the move a "negotiating tactic."

"We've made what we believe is already a very generous offer," Tyler said in an interview with CNN television.

"We've indicated to the union that we're prepared to improve things in order to satisfy some of their demands, but we simply cannot go to increases in the order of 32 percent for some pilots in order to reach a solution."

Pilots head for a meeting

Cathay cut costs and pilots' pay after being caught in the windshear of Asia's economic crisis.

The airline posted a loss of HK$542 million in 1998, its first in 35 years.

Cathay settled the 1999 pay dispute with senior pilots after most aircrew accepted cuts of up to 22 percent over three years, in exchange for stock options.

The package was intended to save HK$1.4 billion over 10 years.

Meanwhile, disgruntled pilots and cabin crew of Japan's third-largest airline, Japan Air System Co (JAS), began a 24-hour strike on Wednesday, affecting some 23,500 passengers.

In South Korea, however, unionized ground workers of the country's number-two carrier Asiana Airlines reached a provisional agreement on Monday to end an almost week-long strike.

Reuters contributed to this report.