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Cathay Pacific to slash 8,500 jobs, end Cathay Dragon brand due to pandemic 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
SYDNEY (Reuters) – Hong Kong’s Cathay Pacific Airways Ltd said on Wednesday it would 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), it told the stock exchange. 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 said. “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 Chief Executive Augustus Tang said in a statement. Cathay shares jumped almost 7% in early trade, with broker Jefferies saying the announcement removed a key overhang on the stock. Singapore Airlines Ltd and Australia’s Qantas Airways Ltd have already announced similarly large payroll cuts, as the International Air Transport Association forecasts passenger traffic will not recover until 2024. Cathay, which has stored around 40% of its fleet outside Hong Kong, said on Monday 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 that analysts expected would result in major job losses. 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….Read More.