Cathay Pacific cuts 8,500 jobs, shutters regional airline
The cuts are about 24% of the company’s workforce
Hong Kong airline Cathay Pacific Airways said Wednesday it would cut 8,500 jobs and shut a regional airline as it grapples with the plunge in air travel due to the pandemic.
About 5,300 employees based in Hong Kong and another 600 elsewhere will likely lose their jobs, and 2,600 unfilled positions will be cut. The cuts are about 24% of the company’s workforce, Cathay Pacific said in a statement.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The company will also shut down Cathay Dragon, its regional airline unit, with operations ceasing from Wednesday. It will seek regulatory approval for most of the routes to be operated by Cathay Pacific and its budget airlines subsidiary HK Express.
The restructuring is aimed at reducing Cathay Pacific’s cash burn to 500 million Hong Kong dollars ($64.5 million) a month, from about 1.5 billion Hong Kong dollars ($193.5 million) to 2 billion Hong Kong ($258 million) dollars currently, Cathay Pacific CEO Augustus Tang said in a statement.
PARENTS RETIRE EARLY FROM ALASKA AIRLINES TO PROTECT KIDS' JOBS: 'LEAVING GIVES THEM A BETTER CHANCE'
“The global pandemic continues to have a devastating impact on aviation and the hard truth is we must fundamentally restructure the Group to survive,” 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.”
AIRLINES PLAN FOR PROLONGED CORONAVIRUS TRAVEL DROUGHT
The restructuring plan will cost about 2.2 billion Hong Kong dollars ($283.8 million), the company said.
Executive pay cuts will also continue throughout 2021 and there will be no pay increments for 2021 nor bonuses for this year for all Hong Kong employees, Cathay Pacific said. Ground staff will also be offered a voluntary leave plan in the first half of next year.
CLICK HERE TO READ MORE ON FOX BUSINESS
In June, Cathay Pacific raised 39 billion Hong Kong dollars ($5 billion) in a recapitalization plan that gave the city’s government a stake of about 6% in the airline.