HONG KONG (AP) – Hong Kong airline Cathay Pacific Airways said yesterday it would cut 8,500 jobs and shut a regional airline as it grapples with the plunge in air travel due to the pandemic.
About 5,300 employees based in Hong Kong and another 600 elsewhere will likely lose their jobs, and 2,600 unfilled positions will be cut. The cuts are about 24 per cent of the company’s workforce, Cathay Pacific said in a statement.
“The global pandemic continues to have a devastating impact on aviation and the hard truth is we must fundamentally restructure the group to survive,” Cathay Pacific CEO Augustus Tang said in a statement.
“We have to do this to protect as many jobs as possible, and meet our responsibilities to the Hong Kong aviation hub and our customers,” Tang said.
The company said it will also shut down Cathay Dragon, its regional airline unit, with operations ceasing yesterday. It will seek regulatory approval for most of the routes to be operated by Cathay Pacific and its budget airlines subsidiary HK Express.
The restructuring is aimed at reducing Cathay Pacific’s cash burn to USD64.5 million a month, from about USD193.5 million to USD258 million dollars a month currently, the company said.
The plan will cost about USD283.8 million, it said.
Executive pay cuts will continue throughout 2021 and there will be no pay increments for 2021 nor bonuses for this year for all Hong Kong employees, Cathay Pacific said. Ground staff will be offered a voluntary leave plan in the first half of next year.
In a news conference, Cathay Pacific Airways chairman Patrick Healy estimated that passenger levels will only return to pre-pandemic levels in 2024.
“The future remains highly uncertain. This crisis is deeper and the road to recovery slower and more patchy than anyone thought possible just a few short months ago,” he said.
Healy said Cathay Pacific is more affected than its peers as the airline is “100 per cent reliant on cross-border travel,” much of which has stopped as passengers remain wary of flying amid travel restrictions. Major destinations such as mainland China and other countries have temporarily closed their borders to visitors.