Jay Singer may be Cathay Pacific Airway Ltd's worst nightmare.
"I'm doing everything I can to avoid Cathay," said Hong Kong-based Singer, an American who travels about 800,000km a year as vice president at MasterCard International Inc.
As Asia's fifth-largest carrier struggles to contain a labor dispute with pilots that led to scores of canceled or delayed flights, it faces a deeper test: retaining customer loyalty.
Beyond the cost of chartered aircraft and borrowed crews from other airlines, Cathay must win back passengers so dismayed by the airline's recurring disputes with pilots in the past eight years that they are switching to rivals. A particular problem could be lost customers among full-fare business class clients.
Singer, who spends more than half of his time traveling, told his secretary to switch all bookings from Cathay to other airlines. On recent trips to Korea and Taiwan, he flew with Korean Air Co and Thai Airways International Pcl. When he headed for the US this weekend, he flew Continental Airlines Inc.
Aiming to force an end to the dispute, Cathay fired three pilots initially and then 49 more. It gave the rest raises of as much as 9 percent and better benefits and work schedules.
Yet neither side is showing signs of compromise. The pilots vow to continue the campaign to delay flights. Cathay says it won't give in to their demands.
Cathay has already lost four-fifths of corporate travel bookings, the most profitable kind, according to Thomas Cook (HK) Ltd, a Hong Kong-based travel agency.
"So many of our clients have already changed to another airline," said Billy Kwan, a marketing executive at Thomas Cook.
"Monthly, we have about 100 bookings with Cathay Pacific. Right now, because of the dispute, 80 percent of bookings are going to other airlines." The airline, for its part, says it expects customers to remain loyal. It declined comment on whether it is losing passengers as a result of the dispute.
"The schedule is getting back to normal," said Rosita Ng, a Cathay spokeswoman. "It looks like we are resuming normal operations. We have certainly been able to build our service to a level that offers our customers reasonable confidence." The airline said flight operations have stabilized, with six flights to be canceled today, the same number as yesterday. The airline said in a statement it is operating 123 flights out of 129 originally scheduled today.
Cathay's labor troubles also exacerbated frustration among passengers stranded at Hong Kong's airport when Typhoon Utor passed near the city a week ago, forcing the airline to delay or cancel all arriving and departing flights for half a day.
Milly Mak, a recruitment consultant, said she waited on board her Sydney-bound flight for six hours last week before being told after midnight that it was canceled. She got on another flight the next day, but was frustrated with the service.
"I'm flying back with Qantas. I just don't know -- they might have another dispute in six months' time," she said. She won't fly with Cathay "for a long time. I just don't want to go through the whole thing again." Pilots at Cathay began a campaign to delay flights on July 3, after talks over wages and work schedules broke down. The pilots have been following union instructions to report for duty 80 minutes before departure, as required.
The way in which Cathay fired the pilots has increased the resolve of the union, said John Findlay, general secretary of the Hong Kong Aircrew Officers Association, which represents almost 1,300 of the airline's more than 1,500 pilots.
"The reason for sacking 49 pilots was to put fear in the other pilots," Findlay said. "They have got the opposite result." One pilot who had flown to the US was woken up at 2am and told he was out of a job, Findlay said. Another tried to report for duty on Tuesday night, only to find his electronic access card didn't work. A manager had to come to entrance to tell him he had been fired, Findlay said.
Findlay said 20 pilots have joined the union in the past few days. "We are getting applications every day," he said.
For Singer, Cathay's labor problems have given him an unexpected opportunity: while he doesn't plan to stop flying Cathay for good, he's looking forward to exploring alternatives.
"It's giving me an opportunity to take a look at other airlines," he said. "I'm not going to say I would switch my allegiance to Thai or Korean, but people are telling me Continental's a pretty good airline. I'll check that out."
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