Cathay Pacific eyes slashing workforce, winding up Cathay Dragon
SYDNEY (AUSTRALIA) – Hong Kong-based Cathay Pacific Airways Ltd announced on Wednesday it was planning to cut 5,900 jobs and end its regional brand Cathay Dragon. This comes as airline companies are cutting costs while tackling a huge dip in demand due to the pandemic crisis.
The airline is also expected to change its terms in contracts with cabin crew and pilots as part of a restructuring which costs HK$2.2 billion (1.70 billion pounds).
It is slated to slash 8,500 positions and that include 2,600 roles which are lying vacant, the firm said.
“The actions we have announced today, however unpalatable, are absolutely necessary to bring cash burn down to more sustainable levels,” Cathay Chairman Patrick Healy said.
Cathay, which has placed 40% of its fleet outside the city, said on Monday that it would operate less than half of its pre-pandemic capacity in 2021.
It has been conducting a review after receiving a stimulus package of $5 billion from the government.
The airline company said it was bleeding HK$1.5 billion to HK$2 billion a month and the restructuring would stem the outflow by HK$500 million a month next year and executive pay slashes would continue.
The bid to wind up the regional brand Cathay Dragon follows a similar move by rival Singapore Airlines to fold Silkair into its main brand.
Once known as Dragonair, Cathay Dragon used to operate most of the flights to and from mainland China. It has been pummelled by the pandemic and the anti-government protests in the city, which are deterring visitors from the mainland.
Cathay Pacific said it would stop operations of the airline immediately and would go for regulatory approval to fold the majority of Cathay Dragon routes in Cathay Pacific and low-cost HK Express.