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Cathay Union Threatens Holiday-Travel Disruptions Over Pay

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Dec. 5 (Bloomberg) -- Cathay Pacific Airways Ltd.’s flight attendants’ union, representing more than 5,800 cabin crew, may stage industrial action during the year-end travel rush because of a pay dispute.

Cabin crew could work to rule or possibly stage a strike after management refused to re-open salary talks, union spokesman Tsang Kwok-fung said yesterday by phone. A special committee will assess options ahead of a Dec. 10 vote by members, Vice Chairman Yau Chi-hung told reporters in Hong Kong.

The union refused to rule out protests over the Christmas travel season, traditionally one of Hong Kong-based Cathay’s busiest times of the year. The employees are seeking a bigger pay increase while the airline is cutting costs amid slowing demand and higher fuel prices.

“What we want is just renegotiation with the employer,” Yau said. “We are deeply disappointed.”

The carrier rose 1.8 percent to HK$13.50 at the close in Hong Kong trading. The benchmark Hang Seng Index gained 2.2 percent.

The airline has said it will raise salaries by about 2 percent next year. The union has sought a 5 percent raise. That’s above the government’s 3.9 percent forecast for inflation this year. More than 100 flight attendants staged a rally at Hong Kong airport to protest the pay increase Dec. 3.

The planned increase is “fair, reasonable and competitive,” Cathay said in an e-mailed statement yesterday. Workers will also get a discretionary extra month’s pay.

Union Talks

The airline also said it’s willing to meet the union to discuss matters other than pay, provided workers don’t threaten industrial action. Salary talks have been concluded, it said.

Cathay always has contingency plans to cope with pressure on its resources arising from disruptions, Liza Ng, its head for cabin crew, said in the statement.

The last time Cathay flight attendants staged a strike was during the Chinese New Year holiday in 1993 when about 1,000 cabin crew walked out for 17 days, the longest in the union’s history, according to Tsang. Since then, there were only small-scale industrial actions such as work to rule, he said.

The airline, which reported a first-half loss, has unveiled cost-cutting measures including banning spending on festive gatherings, scrapping a management conference and cutting entertainment spending to a “bare minimum.”

Cathay carried 2.46 million passengers last December, making it the third busiest month of the year, according to data compiled by Bloomberg.

To contact the reporters on this story: Jasmine Wang in Hong Kong at jwang513@bloomberg.net; Simon Lee in Hong Kong at slee936@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

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