Cathay pilots dispute 'costing $12.8 million a week'

By CNN's Nic Hopkins

HONG KONG, China (CNN) -- - A protracted pilots dispute is costing Hong Kong-based airline Cathay Pacific at least $12.8 million a week, analysts say.

They say the airline, one of Asia's most profitable, is forfeiting more than HK$100 million ($12.8 million) every week as a direct result of the row with its pilots over pay and work conditions.

Deutsche Bank aviation analyst Kevin O'Connor says the carrier has already lost some $32 million as a result of the dispute.

"We estimate Cathay is currently operating at around 80 percent of its scheduled capacity," said O'Connor. "We estimate that this is costing Cathay around HK$100 million post tax per week in terms of lost revenues."

The outlook remained bleak for Cathay on Wednesday as pilots voted to continue to the industrial campaign that has forced the airline to charter jets and crews from other airlines in the region.

Cathay has chartered 17 aircraft and crew to make up for the lost capacity, which is estimated by analysts to be costing some $HK27 million a week.

Industrial action extended

Meeting for the first time since they began "their work to rule" campaign on July 3, the Hong Kong Aircrew Officers' Association (HKAOA) endorsed a motion for "indefinite industrial action".

"It will have an impact on the company's bottom line, but how much will depend on how long the dispute drags on," said another Hong Kong-based analyst, who declined to be named.

For the past two weeks the pilots' work to rule strategy, which is effectively a slowdown, has caused delays and cancellations of flights.

Company corporate communication manager Lisa Wong said the airline had to cancel five flights out of 143 scheduled flights on Wednesday.

A day earlier the company operated 139 flights out of its original schedule of 144 flights, with 35 flights delayed by more than 15 minutes, including five by more than 90 minutes.

"We are more or less back to normal," said Wong. "But it's costing us because we have to charter the aircraft and crew, and that's why we're saying this action benefits no one."

Responding to the vote by pilots to continue their industrial action, Wong said: "We are naturally disappointed that the union has decided to continue with its misguided approach."

Support for sacked pilots

In a separate vote, the pilots pledged full support for 52 pilots sacked by Cathay during the ongoing dispute over pay and work conditions.

The HKAOA represents more than 85 percent of Cathay's 1,500 pilots. It has said there will be no negotiations with Cathay management until the sacked pilots are reinstated.

Cathay says it won't go back to the bargaining table until the pilots stop the industrial action, and it refuses to negotiate with any sacked pilots.

"They are no longer employees of Cathay, so I don't see how we could negotiate with them," said Wong.

Stephen Miller, managing director of Hong Kong consulting firm Trinity Group, says Cathay faces a public backlash if the dispute continues much longer.

"The public is angry at Cathay for not resolving this sooner," he told CNN.

History of disputes

"This is something that has built up for some time. There is a history of disputes between Cathay and its pilots and cabin staff, and somehow they have to find a method of solving them."

"I expect this time both sides will eventually become exhausted both mentally and physically by what's going on and there will be some sort of patch-up, but I don't think it will be a long-term resolution."