High expectations on Hong Kong’s Cathay executives to deliver after pay rise
- City flag carrier, having been bailed out by taxpayers, must now redouble efforts to restore city’s status as an international aviation hub
Cathay Pacific Airways has had an arduous struggle to recover from the pandemic. Hit hard when passenger traffic was decimated by quarantine restrictions, it shed staff including pilots and crew and took a multibillion-dollar bailout from the government in 2020 to survive.
Its once vaunted service suffered, while limited flights and higher fares led to sustained grumbling even among loyal passengers.
So when it announced earlier this year that it had returned to profitability for the first time in four years, expectations were raised for accelerated improvement of services, restoration of old routes and addition of new ones, more frequent flights and lower ticket prices.
What was not raised were expectations of healthy compensation packages for the top executives while the work was still ongoing.
Detailed in the airline’s latest annual report and reported by the Post, Cathay paid its 20 executive directors about 20 per cent more than in 2019, before the pandemic. CEO Ronald Lam Siu-por was highest paid, with a package worth HK$10.45 million (US$1.3 million), up 32 per cent from 2022.
CFO Rebecca Sharpe was second-highest at HK$9.71 million, up more than 35 per cent, and chairman Patrick Healy received HK$8.66 million, up more than 38 per cent.
To be sure, in the darkest days of the pandemic, Cathay’s management took a pay cut to help the airline weather the storm. It also laid off 5,300 crew members, pilots and ground staff.
Executive compensation needs to be competitive, and Cathay is hardly the most generous. Delta Air Lines CEO Ed Bastain received a jaw-dropping US $34.2 million, though his airline was the world’s most profitable.
Singapore Airlines CEO Goh Choon Phong received S$6.7 million (HK$38.9 million) in the year through March 2023. That airline in May reported record profits, and also plans to hand out a bonus of nearly eight months’ salary to employees.
The recovery has been far slower for Cathay. Holiday flight cancellations due to a shortage of pilots forced the airline to apologise to irate customers.
It has not yet restored all routes and flight frequency lags. It is flying older aircraft after delaying new orders amid the pandemic.
It aims to hire 20 per cent more staff this year.
Healy told the Post this week that Cathay had hit 80 per cent of pre-pandemic capacity but was not planning to add new routes, such as to the Middle East, until it restored full capacity in the first quarter of 2025. It is also under industry pressure to add more direct flights to eight mainland cities that have recently opened up to solo travellers.
The compensation packages have been announced and paid, and expectations are that much higher. Cathay cannot afford to disappoint.
On its wings rest Hong Kong’s hopes of regaining its rightful place as an international aviation hub.
