The vast majority of pilots and cabin crew at Cathay Pacific (CX, Hong Kong Int'l) have signed up for new take-it-or-leave-it contracts that will pay them less, the airline revealed in a statement on November 5.

This part of Cathay’s corporate restructuring, which it announced on October 21, is essential to ensure its survival and secure its future, it explained.

Following the end of a “consent period” on November 4, Cathay Pacific said that 2,613 pilots and 7,346 cabin crew had signed on to the new and permanent “conditions of service,” representing 98.5% of pilots and 91.6% of cabin crew who were asked to agree.

“We are very grateful to those who have accepted the new contracts. These are competitive contracts, which will enable us to continue to recruit and retain the very best people to be our pilots and cabin crew as we seek to survive and rebuild our business,” Hong Kong’s flag carrier, hard hit by the coronavirus crisis, added.

“For those who decided not to join us, we respect their decision. These staff will be offered packages that go beyond statutory requirements. None of the severance payments will be offset against pension contributions, and staff will be reimbursed for any unpaid leave they took in 2020,” Cathay Pacific pledged.

The restructuring will reduce its operating cash burn, it added, by about HKD500 million Hong Kong dollars (USD64.5 million) per month, bringing it down to HKD1-1.5 billion (USD129-194 million) per month.

Cathay Pacific outlined in a stock exchange filing on October 21 that it would halt operations at Cathay Dragon (KA, Hong Kong Int'l) with immediate effect and cut 5,900 jobs at Cathay Pacific Group overall, eliminating 8,500 positions in total (24% of its normal headcount) including 2,600 roles unfilled in a hiring freeze.

The following day, it asked its pilots and cabin crew, numbering about 2,000 and 8,000 respectively, to decide whether to sign the new contracts, which in some cases would see their combined salaries and benefits cut by between 20% and 60%, or face redundancy.

“We have jobs for every pilot who was offered [Cathay Pacific pilot contract] COS18 and we wanted a 100% take up. However, we also realised that it was possible that some would choose to leave us rather than accept,” the company’s director of flight operations, Chris Kempis, said in an internal memo on November 5, the South China Morning Post reported.

On November 9, Cathay Pacific’s chairman Patrick Healy promised the Legislative Council of Hong Kong, in a meeting the same newspaper described as “tense,” that the airline will not seek any further bailouts or job cuts as it anticipated normal capacity returning by 2022.

“In the assumptions we have made for our business going forward, [...] our liquidity position and balance sheet are certainly strong enough [...] to take us through the crisis without the need for further recapitalisation and without the need for further retrenchment,” he said.

Last month, the carrier forecast that it would operate around 10% of its pre-pandemic capacity for the remainder of 2020, under 25% in the first half of 2021, and less than 50% in the second half of that year.