Cathay Pacific Announces Salary Increment for 2009 and Ex-Gratia Payment for Eligible Staff

Cathay Pacific Airways today announced that all eligible Hong Kong-based staff will receive an average salary increase of two per cent in 2009.

While the current difficulties the airline is facing mean it is unable to pay one month's salary as a discretionary year-end bonus to eligible employees, it will however make an ex-gratia payment to all eligible Hong Kong-based employees of an amount equal to half a month's salary or HK$8,000, whichever is the greater.

The announcement comes as Cathay Pacific's business is rocked by the current financial crisis and economic downturn. The airline posted an interim loss of HK$663 million in August and recently issued its second profit warning of the year, stressing that its full results for 2008 are expected to be disappointing.

Cathay Pacific Chief Executive Tony Tyler said: "We are keenly aware of the concerns and worries of the staff at this time about job security, pay and benefits, so I am pleased to be able to announce the salary increment for 2009 along with the ex-gratia payment for eligible staff. These adjustments are being made in recognition of our team's great contribution to our past success - and I have no doubt that together we will succeed again in future."

Mr Tyler said it was clear that Cathay Pacific has been badly hit by the twin challenges of exceptionally high fuel prices earlier in the year and the fallout from the global financial crisis.

"We are in turbulent times, and things will get worse before they get better. As a commercial airline with no government financial support or subsidies, we have to manage our resources in a responsible and prudent manner in the interests of our shareholders and staff. We have made our intention clear from the outset that we will do all we can to maintain our network and keep our team together. This is an important part of our strategy to come through the crisis in sufficiently good shape to take advantage of the upturn when it comes," he said.

Mr Tyler added that the economic environment remains very volatile, and stressed the airline will have to continue to keep a very close eye on developments. "The financial health and well-being of the company is our paramount objective, and we will have to take whatever steps are necessary to secure and protect this," he said.