Aviation

Cathay Pacific axes 8,500 jobs and ditches regional airline as part of major restructure

Cathay Pacific Group has announced a major corporate restructure in response to the continued impact of the COVID-19 pandemic on the aviation sector.

Approximately 8,500 positions are being cut across the entire company, which accounts for around 24 per cent of its established headcount.

Through a recruitment freeze and natural attrition, Cathay Pacific has been able to reduce this to 5,900 actual jobs (or 17 per cent of its established headcount).

This means some 5,300 Hong Kong-based employees being made redundant, and approximately 600 employees based outside of Hong Kong also possibly being affected, subject to local regulatory requirements.

Cathay Dragon, the group’s wholly-owned regional subsidiary, has ceased operations. It is intended that regulatory approval will be sought for a majority of Cathay Dragon’s routes to be operated by Cathay Pacific and the group’s low-cost carrier, HK Express.

Hong Kong-based cabin and cockpit crew members of Cathay Pacific will be asked to agree to changes in their conditions of service, designed to match remuneration more closely to productivity and to enhance market competitiveness, according to the company.

Executive pay cuts will continue throughout 2021, and Cathay Pacific will introduce a third voluntary Special Leave Scheme for non-flying employees for the first half of next year.

There will be no salary increases for 2021, nor the payment of the annual discretionary bonus for 2020 across the board for all of the company’s employees. Cathay Pacific’s outport colleagues will be subject to local arrangements.

“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.

“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 Cathay Pacific’s immediate priority is to support those affected by the restructure.

“We are deeply saddened to part ways with our talented and respected colleagues, and I want to thank them for their hard work, achievements and dedication.

“We have taken every possible action to avoid job losses up to this point. We have scaled back capacity to match demand, deferred new aircraft deliveries, suspended non-essential spend, implemented a recruitment freeze, executive pay cuts and two rounds of Special Leave Schemes.

“But in spite of these efforts, we continue to burn HK$1.5 to 2 billion cash per month. This is simply unsustainable.”

Tang said the changes will reduce Cathay Pacific’s cash burn by about HK$500 million per month.

“We have studied multiple scenarios and have adopted the most responsible approach to retain as many jobs as possible,” he said.

“Even so, it is quite clear now recovery is going to be slow. We expect to operate well under 25 per cent of 2019 passenger capacity in the first half of 2021 and below 50 per cent for the entire year.”


Featured image source: iStock/Kristian1108

SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Aviation

Virgin pushes back most short-haul international flights, as ScoMo refuses to guarantee quarantine-free travel in 2022

In what shouldn’t come as much of a surprise to you all, Virgin has followed Qantas in adjusting its international restart timeline.

Share

CommentComments

Cruise

Norwegian Cruise Line introduces first ship as part of new Prima Class

NCL has kicked off its first new class of ships in nearly 10 years with an absolute ripper of a vessel. Get a load of it right here.

Share

CommentComments

Wholesalers

TTC to share its huge DMC portfolio with the wider industry

The Travel Corporation has made the bold move of opening its destination management company portfolio to the rest of the industry.

Share

CommentComments

Aviation

Ex-airline CEO cops fine for refusing to provide menstrual leave

by Ali Coulton

This former top dog of the commercial aviation world argued that employees failed to provide “proof” they had their period, which doesn’t sound ideal, if you ask us.

Share

CommentComments

Destinations

REVEALED: The plan to transform Sydney’s Cockatoo Island

The plan would see the iconic island restored with added art, retail, dining and educational spaces. No word on whether the cockatoos would get a better choice of seeds and berries, however.

Share

CommentComments

Tourism

Allianz returns to the travel insurance fold

The insurance giant is back to service the travel sector. No word on its court case against ASIC, however.

Share

CommentComments

Aviation

Qantas delays international restart, as Joyce issues “hermit state” warning

Thought Qantas’ October timeline for the restart of international flights was looking rather precarious before last night’s Federal Budget reveal? Be proven right here.

Share

CommentComments

Cruise

CLIA creates new avenue for agents to lobby politicians on Australia’s cruise restart

Have your numerous attempts to highlight the plight of cruising to your local MP fallen on deaf ears? Help has arrived.

Share

CommentComments

Midweek Interview

Life in the time of COVID-19 with Cunard’s Katrina McAlpine

Cunard’s commercial director had plenty to share during her catch-up with Travel Weekly, including how she once saw a koala walk out of a bar.

Share

CommentComments

Aviation

British Airways staff (not actors) front airline’s first ad campaign since 2019

Got a minute to spare? Grab a cuppa and watch British Airways’ snazzy new ad starring the airline’s very own employees.

Share

CommentComments

Tourism

Health Minister says international travel “an incentive” for Aussies to get vaccinated

Got a few clients who desperately want to venture overseas, but aren’t keen on getting the jab? We highly recommend sharing this article with them.

Share

CommentComments

Travel Agents

Federal Budget “unlikely” to deliver major benefits for agents: AFTA

Were you counting on a big cash splash from the government this Federal Budget? Well, AFTA has warned not to get too excited ahead of tonight’s big reveal.

Share

CommentComments