Cathay Pacific Airways to cut 5,900 jobs from its workforce

According news reports, Hong Kong’s Cathay Pacific Airways to slash 5,900 jobs and end its regional Cathay Dragon brand, joining peers in cutting costs as it grapples with a plunge in demand due to the coronavirus pandemic.

The airline would also seek changes in conditions in its contracts with cabin crew and pilots as part of a restructuring that would cost HK$2.2 billion ($283.9 million). Overall, it will cut 8,500 positions, or 24% of its normal headcount, but that includes 2,600 roles currently unfilled due to cost reduction initiatives.

Cathay, which has stored around 40% of its fleet outside Hong Kong, said it planned to operate less than 50% of its pre-pandemic capacity in 2021. After receiving a $5 billion rescue package led by the Hong Kong government in June, it had been conducting a strategic review.

The airline said it was bleeding HK$1.5 billion to HK$2 billion of cash a month and the restructuring would stem the outflow by HK$500 million a month in 2021, with executive pay cuts continuing throughout next year. Cathay will postpone the delivery of its 21 Boeing Co 777-9 jets on order beyond 2025.

The decision to end regional brand Cathay Dragon is in line with rival Singapore Airlines’ pre-pandemic move to fold regional brand Silkair into its main brand, though in this case 2,500 Cathay Dragon pilots and cabin crew will lose their jobs.

Cathay Dragon operated most of the group’s flights to and from mainland China and had been hit by falling demand before the pandemic due to widespread anti-government protests in Hong Kong.

Plans to merge Cathay Dragon into Cathay’s main brand earlier this year hit roadblocks from China’s aviation regulator because of infractions during last year’s pro-democracy protests.

Cathay said the airline would cease operating immediately and it would seek regulatory approval to fold the majority of Cathay Dragon’s routes in Cathay Pacific and low-cost arm HK Express.

Cathay like Singapore Airlines lacks a domestic market to cushion it from the fall in international travel due to border closures.