Cathay Pacific is to cut 25% of management roles at its headquarters as part of the airline’s transformation programme to deal with increased competition from mainland Chinese rivals and fewer premium class passengers. The company said on Monday it would cut a total of 600 jobs across senior, middle management and non-managerial roles at its Hong Kong headquarters. It will cut 190 management roles, representing 25% of management with 400 roles in non-managerial positions also to go, or 18% of non-managerial posts. Cathay Pacific reported its first annual loss in eight years for 2016 at HK$575m (US$74m) after being hit by increased competition from state-owned Chinese rivals, a fall in business travellers and fuel hedging losses. Cathay Pacific CE Rupert Hogg, who replaced former CEO Ivan Chu in April said: "We greatly appreciate and respect our people’s dedication, hard work and achievements. However, we have had to make tough but necessary decisions for the future of our business and our customers.... As we look to the future we will have a new structure that will make us leaner, faster and more responsive to our customers’ needs. It is the first step in the transformation of our business."<br/>
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BA lost a landmark legal challenge over a decision by its pension scheme trustees to make additional payments to thousands of retired airline workers. In a 164-page judgment published on Friday, the UK High Court dismissed a wide-ranging legal action initiated by BA in 2013, against the trustees of its Airways Pension Scheme, which has 26,000 members. BA challenged a move by the trustees in 2011 to change the retirement plan’s rules to given them power to make discretionary payments to pensioners, in addition to the standard annual inflation rises. It then objected to a later decision by the trustees to use that power to award a 0.2% discretionary payment in December 2013, amounting to GBP12m, branding the decision “perverse and irrational”. As the funder of the pension scheme, BA would be on the hook for any shortfall, which could be exacerbated by making extra payments to members. The airline had argued that the total cost could spiral to GBP384m if the discretionary payments were made over consecutive years. On Friday the court ruled that the trustees’ actions were valid. “We are naturally very pleased with the clarity brought by the High Court’s decision,” said the APS. “We welcome the confirmation from the Court that we and our professional advisers acted appropriately in relation to those decisions.”<br/>
A Qantas flight carrying passengers from Los Angeles to Melbourne has turned back after an engine problem was discovered, the airline confirmed on Sunday. QF94 A380 was on its way to Australia on Friday when the pilots discovered an issue with one of the aircraft’s four engines. The airline denied reports that one of the engines was on fire. The faulty engine, however, had to be shut down and the plane returned to Los Angeles airport, where it landed safely at around 3am. “Reports that the engine was ‘on fire’ aren’t correct; passengers may have seen some sparks before it was safely shut down by the flight crew," the carrier said. Passengers were transferred to a replacement flight that left LA at around 2.30pm on Saturday and is scheduled to arrive in Melbourne on Sunday night.<br/>
A spat has blown up between BA and Heathrow over the airport’s hopes to increase domestic flights once it gets a third runway. Heathrow has written to the government asking it to “ring-fence” a proportion for domestic flights of the extra take-off and landing slots created. But BA has hit out at the plan, saying that the airport does not have any standing to control destinations served by the slots. “It’s not in Heathrow’s gift to increase domestic flying from the airport,”said BA’s owner, IAG. “Airlines, not airports, decide where to fly based on routes’ profitability.” BA is highly influential at Heathrow, where it is based and has roughly half of the slots currently available. The airline called for competitive fees to encourage flights at Heathrow, adding: “The best way to encourage domestic routes is for the airport to be fairly priced. It’s hard to make routes viable if airlines are charged more at Heathrow than any other airport. If costs are low, flights will follow.” If the highly controversial plans to add the new runway go ahead, the airport is expected to see flights increase to more than 700,000 annually. Currently, only 6% of passengers travel on domestic flights from Heathrow to eight UK destinations, though this could soar if plans go ahead to add more UK services.<br/>
LATAM Airlines Group reported a Q1 2017 net profit of US$65.6m, down 35.9% from the company’s $102.2m net income in 1Q 2016. Operating revenue for the quarter increased 6.4% year-over-year to $2.5b. LATAM attributed the increase to the company’s capacity management combined with stronger local currencies, particularly in Brazil. Total expenses increased 10.3% YOY to $2.3b as fuel and labor costs rose 29% and 7.5%, respectively YOY. The Santiago, Chile-based carrier has decreased its workforce headcount by 12.4% since the 1Q 2016 as part of the company’s cost efficiency transformation. LATAM Group’s operating income for the quarter fell 30.5% YOY to $152.3m; the company’s operating margin for the quarter was 6.1%, down 3.3 points from Q1 2016. “We are in the middle of transforming LATAM and [are] improving the value proposition for our clients with the renewal of the domestic flight model,” LATAM Airlines Group CEO Enrique Cueto said. “While we still have a lot of work to do, we are off to a solid start.”<br/>
Turkey's official news agency says the FBI has detained a Turkish man who attempted to sit in first class on a Los Angeles-Honolulu flight. The Anadolu news agency reported Sunday that 25-year-old Anil Tuvanc Uskanli bought an economy ticket on American Airlines Flight 31 but left his seat to try first class. Flight attendants stopped him but in the ensuing argument, he kicked a service cart. The agency said Uskanli was handcuffed to his seat after refusing to sit. Uskanli was taken into custody after the plane, escorted by two fighter jets, landed in Honolulu. He now faces a possible charge of interference with a flight crew. Anadolu said Uskanli studied film and journalism in California and London.<br/>
Malaysia Airlines flight MH127 that was about to take off from the Kuala Lumpur International Airport (KLIA) to Perth tonight was grounded while on roll due to a suspected burst tyre. MAS in a statement posted in the company“s Facebook and Twitter account at 10.59pm said in the interest of passenger safety, the operating captain made a decision to abandon take-off. “Passengers and crew were disembarked and transferred by bus to the terminal. Baggage will also be sent by bus to the terminal. Due to this, Runway 2 at KLIA will be closed until further notice,” according to the posting. It also said MAS will be deploying another B737-800 to operate MH127. Flight MH127 departed from KLIA at 11.20pm and expected to arrive in Perth at 5.10am tomorrow. The airline will be investigating the incident on the Boeing 738 aircraft, it said.<br/>
An American Airlines flight has made an unscheduled landing at a North Carolina airport after a strong electrical odor was detected on board. Spokeswoman Katie Cody said Flight 1889 from Charlotte to Hartford, Connecticut, was diverted to Raleigh-Durham International Airport, where it landed safely at 5:01 p.m. Friday. Cody said three crewmembers were taken to the hospital as a precaution. She said a maintenance crew is evaluating the Airbus 320. A statement from Raleigh-Durham said six others on the flight were checked out by medical responders, but declined to go to the hospital. Another American flight diverted on its way to Charlotte. Flight 1866 from Providence, Rhode Island, to Charlotte, reported an engine-related issue en route and diverted to Hartford. No one was hurt.<br/>