Cathay Pilots Hit by Pay Squeeze Courted by Chinese Airlines

Chinese airlines have started to circle the pilots at Cathay Pacific Airways, based in Hong Kong, offering salaries that are very high to fill the shortage they have of experienced captains in an aviation industry that is rapidly expanding.

Chinese air carriers such as Hainan Airlines, Juenyao Airlines and China Southern Airlines will all need over 100,000 new pilots during the next 20 years, according to estimates by Boeing Co, as air travel expands thanks to increased prosperity in the second largest economy in the world.

China trains over 4,700 new pilots each year, according to its Civil Aviation Administration of China or CAAC. However, the sharp growth in the industry has left it without enough captains that have thousands of hours of experience flying.

Airlines in China are growing at such a quick rate, but it takes a long period before a pilot becomes a captain, said a recruiting company whose clients include Loong Air and China Southern. The company said that pilots hired by airlines based in Hong Kong have likely passed assessments that were very strict.

Firms specializing in pilot recruitment have flocked to Hong Kong in hopes of enticing established pilots at Cathay, which has cut over 600 jobs this year.

While none of its 2,500 pilots based in Hong Kong are being fired, Cathay has warned that next month there would be cuts to their allowances for housing, which for some captains that have been with the company for a long period, can be worth more than $11,000 per month.

Some pilots with Cathay say the cuts could price them out of being able to live in the one of the most expensive cities in the world. In the industry, pilots with Cathay are regarded as amongst the best-qualified as well as highest paid in the industry and many are expatriate American, Australians and Britons.

Some airlines in China have offered pay packages that are tax free of as much as $314,000 per year. That is in line with what captains are now earning at Cathay, before any allowance cuts. The airline is looking at reducing its pensions as well as increasing productivity.

Chinese airlines are using recruiting agencies to scout for their pilots around the world. Hong Kong was not a major target previously, but has now become one due to the struggling Cathay.

One official from Cathay said the company is used to having their pilots courted by other airlines.

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