Cathay Pacific is looking to cut staff costs by 10% following a poor first half performance, and is asking pilots to accept a pay freeze, reports the South China Morning Post.

The news site has seen an internal memo which shows of 2016’s staff costs of HKD19.7 billion (USD2.5 billion), half was attributable to pilots who make up 14.6% of the workforce.

In the first six months of 2017, Cathay reported a total loss of HKD2 billion (USD255.8 million), compared to a profit last year in the same period of HKD353 million (USD45.1 million). As part of its corporate transformation plan, the airline is aiming to become more lean and agile by cutting costs and finding sustainable revenue.

Staff efficiency will also be achieved through the use of optimised crew scheduling through Boeing’s Jeppesen Crew Pairing technology.

The proposed pay freeze and pension changes will be scrutinised by the pilots union before a deal is reached.

Cathay’s Director of Flight Operations, Anna Thompson, says that changes need to be made quickly.

“To turn this company around, it is clear that we need to reduce our cost base quickly and by a significant amount and also make productivity gains,” Thompson said.

Cathay Pacific cut 190 staff in May, and a further 400 in June this year, with staff from all organisational units affected. The carrier faces fierce competition from the rise of mainland Chinese rivals as well as a decline in the demand of its ‘premium’ offerings in light of low-cost alternatives.