Cathay Pacific cuts 8,500 jobs, shutters regional airline
23 October, 2020
Hong Kong airline Cathay Pacific Airways said Wednesday it could cut 8,500 jobs and shut a regional airline since it grapples with the plunge in air travel because of the pandemic.
About 5,300 employees based in Hong Kong and another 600 elsewhere will probably lose their jobs, and 2,600 unfilled positions will be cut. The cuts are about 24% of the company’s workforce, Cathay Pacific said in a statement.
The company may also turn off Cathay Dragon, its regional airline unit, with businesses ceasing from Wednesday. It'll seek regulatory approval for almost all of the routes to be operated by Cathay Pacific and its budget airlines subsidiary HK Express.
The restructuring is targeted at reducing Cathay Pacific’s cash burn to 500 million Hong Kong dollars ($64.5 million) per month, from about 1.5 billion Hong Kong dollars ($193.5 million) to 2 billion Hong Kong ($258 million) dollars currently, Cathay Pacific CEO Augustus Tang said in a statement.
“The global pandemic continues to truly have a devastating impact on aviation and the hard truth is we should fundamentally restructure the Group to survive,” Tang said.
“We have to do that to protect as many jobs as possible, and meet our obligations to the Hong Kong aviation hub and our customers.”
The restructuring plan will definitely cost about 2.2 billion Hong Kong dollars ($283.8 million), the business said.
Executive pay cuts may also continue throughout 2021 and there will be no pay increments for 2021 nor bonuses because of this year for all Hong Kong employees, Cathay Pacific said. Ground staff may also be offered a voluntary leave plan in the first half of next year.
In June, Cathay Pacific raised 39 billion Hong Kong dollars ($5 billion) in a recapitalization plan that gave the city’s government a stake of around 6% in the airline.
Source: japantoday.com
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