Cathay Pacific Airways’ pilots have voted to reject a tentative contract agreement, dealing a setback to the Hong Kong flag carrier’s turnaround efforts.

The proposal was voted down by a significant margin, despite being endorsed by the Hong Kong Aircrew Officers Association (HKOA). With 96% of eligible members voting, the deal was rejected 1,775-483.

Cathay and pilots have been in dispute over various contract terms since 2014. The stalemate led to the introduction of a work-to-rule campaign by pilots. A tentative agreement was also reached in 2016 but was rejected.

In a letter to members following the latest vote, HKOA chairman Darryl Soligo said union leaders will now “meet to formalize our next moves.” This is likely to occur at an urgent general committee meeting this week, he said. HKOA will also commission a survey to obtain more details of the reasons behind the vote result. This could be “further refined with a select committee to conduct a more in-depth assessment.”

The airline had targeted cost-savings and productivity gains from labor groups as part of a broader restructuring initiative aimed at curbing financial losses. Cathay is now in the third year of restructuring, the airline said in a statement.

“All other staff groups have contributed toward a sustainable growth path for Cathay Pacific, including a leaner structure and the improvement of productivity in their respective areas,” the carrier noted.

Cathay said it was “sorry to learn that the [HKAOA members] voted against the proposal, which was recommended by both the company and [union] leadership.” The airline is “committed to engaging positively with our pilots and pursing opportunities to align interests … we will continue to look for ways to move forward together with our pilot community.”

Adrian Schofield, adrian.schofield@informa.com