Cathay Pacific to cut 5,900 jobs, end Cathay Dragon brand due to pandemic

By Jamie Freed SYDNEY (Reuters) - Hong Kong's Cathay Pacific Airways Ltd said on Wednesday it would cut 5,900 jobs and end its regional Cathay Dragon brand as it grapples with a plunge in demand from the coronavirus pandemic.

Reuters October 21, 2020 06:05:08 IST
Cathay Pacific to cut 5,900 jobs, end Cathay Dragon brand due to pandemic

Cathay Pacific to cut 5900 jobs end Cathay Dragon brand due to pandemic

By Jamie Freed

SYDNEY (Reuters) - Hong Kong's Cathay Pacific Airways Ltd <0293.HK> said on Wednesday it would cut 5,900 jobs and end its regional Cathay Dragon brand as it grapples with a plunge in demand from the coronavirus pandemic.

The restructuring will cost HK$2.2 billion ($283.9 million) and 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% 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.

The International Air Transport Association expects it will take until 2024 for passenger traffic to recover to pre-COVID-levels.

The airline, 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 because it has been bleeding 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 airline said, adding executive pay cuts would continue throughout next year.

The decision to end regional brand Cathay Dragon is in line with rival Singapore Airlines Ltd's pre-pandemic move to fold regional brand Silkair into its main brand.

Cathay Dragon, once known as Dragonair, operated most of the group's flights to and from mainland China and had been hit by falling demand before the pandemic due to widespread anti-government protests in Hong Kong that deterred mainland travellers.

Plans to end the brand earlier this year hit roadblocks from China's aviation regulator because of infractions during last year's pro-democracy protests, two sources told Reuters in May.

Cathay said it would seek regulatory approval to fold the majority of Cathay Dragon's routes in Cathay Pacific and low-cost arm HK Express.

Like Singapore Airlines, Cathay lacks a domestic market to cushion it from the fall in international travel due to border closures.

In September, Cathay's passenger numbers fell by 98.1% compared with a year earlier, though cargo carriage was down by a smaller 36.6%.

Cathay had until now refrained from major job cuts but Singapore Airlines announced plans to cut around 20% of positions, while Australia's Qantas Airways Ltd has said it will cut nearly 30% of its pre-pandemic staff.

Cathay shares have fallen 43% since the start of January. In July, it reached agreement with Airbus SE to delay the delivery of A350s and A321neos and said it was in advanced talks with Boeing Co about deferring its 777-9 orders.

(Reporting by Jamie Freed; Editing by Stephen Coates)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Facebook releases first data on hate speech prevalence on its platform
News &amp; Analysis

Facebook releases first data on hate speech prevalence on its platform

By Elizabeth Culliford (Reuters) - Facebook Inc for the first time on Thursday disclosed numbers on the prevalence of hate speech on its platform, saying that out of every 10,000 content views in the third quarter, 10 to 11 included hate speech. The world's largest social media company, under scrutiny over its policing of abuses, particularly around November's U.S.

Santa, barred from malls and chimneys, enters homes via interactive video
News &amp; Analysis

Santa, barred from malls and chimneys, enters homes via interactive video

(Reuters) - Santa cannot sit with kids in shopping malls this year, but they can still tell him their Christmas wishlist in a video chat at home.     Technology company Storyfile has come up with an artificial intelligence alternative to the holiday tradition: an interactive website where Father Christmas answers questions as if in person

Facebook estimates hate speech seen in 1 out of 1000 views on its platform
News &amp; Analysis

Facebook estimates hate speech seen in 1 out of 1000 views on its platform

By Elizabeth Culliford (Reuters) - Facebook Inc for the first time on Thursday disclosed numbers on the prevalence of hate speech on its platform, saying that out of every 10,000 content views in the third quarter, 10 to 11 included hate speech. The world's largest social media company, under scrutiny over its policing of abuses, particularly around November's U.S.