Cathay Pacific Airways today expressed grave disappointment that its pilots` union has neither accepted the company`s improved offer nor withdrawn its intention to distribute the union`s Hong Kong disruption plan. As the distribution of the plan would effectively initiate industrial action, further good faith negotiations are impossible.

The airline`s comprehensive new offer presented on Thursday included significant improvements in hourly pay, provident funds, housing allowances, education allowances, maternity leave and medical benefits. The pilots` union rejected the offer and refused to present any response of its own. The offer included:

* Pay rises of up to 10.5%;

* Contributing 15.5% of the pay increase to pilots` provident funds;

* Offering additional overtime pay with a premiums of up to two and a half times pilots` basic hourly pay; and

* Improvements to roster stability and incentive pay.

Cathay Pacific`s Director Corporate Development Tony Tyler said: “We have clearly put a lot of money on the table to keep the Hong Kong public travelling. We have done this despite the current global economic slowdown and the weakening demand being seen by airlines around the world. Offering anything more would compromise our long-term competitiveness. Sadly, the pilot union leadership has chosen disruption over negotiation.”

Given the threat of imminent industrial action, Cathay Pacific is working hard on a range of contingency plans to protect passengers. The airline is prepared to charter aircraft and rebook passengers on other airlines.

Unfortunately as the union has kept its disruption plans secret, it appears inevitable there will be some level of disruption. The airline sincerely apologises to all passengers for the inconvenience this will cause. For the time being, the airline continues to operate as normal and all flights remain open for booking.

Mr Tyler said the airline would like to thank the highly capable staff of the Labour Department who have worked hard to help the parties reach an agreement. He said he hoped the Department would continue to offer its assistance.

Cathay Pacific and its pilots` union have held over 50 meetings since late 1999 on the issues of remuneration and roster practises. The union has asked for increased pay and benefits of up to 32% for some pilots. Cathay Pacific feels its own offer is generous given Hong Kong`s economic outlook. The two parties reached a three-year agreement in June 1999, which was not supposed to expire until 2002.

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