Hong Kong’s flag carrier, Cathay Pacific Airways Ltd, stated yesterday that it would lay off 5,900 jobs and end its regional Cathay Dragon brand as it catches with a dive in demand from the COVID-19 pandemic.
The reorganization will cost HK$ 2.2 billion or about 283.9 million US dollars. The airline will also seek changes in conditions in its contracts with cabin crew and pilots. It told the stock exchange.
Overall, it will cut 8,500 positions or 24 percent of its expected headcount, but that includes 2,600 roles currently unfilled due to cost reduction initiatives, Cathay said.”The future remains highly uncertain and it is clear that recovery is slow,” Cathay said in a statement, citing the International Air Transport Association’s expectation it will take until 2024 for passenger traffic to recover to pre-COVID-levels.
The airline, which has filed around 40 percent of its fleet outside Hong Kong, said on Monday it prepared to operate less than 50% of its pre-pandemic capability in 2021.
After securing a $5 billion rescue package led by the Hong Kong government in June, it had been handling a strategic review that analysts foreseen would result in significant job losses because it has been draining HK$1.5 billion to HK$2 billion of cash a month.
The restructuring will stem the cash burn by HK$500 million a month in 2021, the spokesperson of the airline announced.
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