The Hong Kong-based Cathay Pacific Group has decided to cease operations of its regional subsidiary Cathay Dragon.
The Group has also announced that it will reduce its workforce and passenger capacity to adapt to the new travel reality with the covid-19 crisis.
Cathay Pacific Group announced today that it is undergoing a corporate restructuring due to the ongoing impact of the COVID-19 on the aviation industry.
The Airline will reduce around 8,500 positions across the group, which is approximately 24% of the team. Except for the freezing of recruitment and natural separations, the company is planned to part ways with 5,900 active employees.
In addition, Cathay Dragon, the regional subsidiary owned 100% by the group, will cease its operation with immediate affect.
Cathay Pacific Chief Executive Officer Augustus Tang 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. 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.
“Our immediate priority is to support those affected by today’s announcement. We are deeply saddened to part ways with our talented and respected colleagues, and I want to thank them for their hard work, achievements and dedication.”
We have taken every possible action to avoid job losses up to this point. We have scaled back capacity to match demand, deferred new aircraft deliveries, suspended non-essential spend, implemented a recruitment freeze, executive pay cuts and two rounds of Special Leave Schemes.
CEO added that the company continues to burn HK$1.5-2 billion cash per month and with the new cost measures this will reduce by around HK$500 million per month.
The carrier expects to operate under 25% of 2019 passenger capacity in the first half of 2021 and below 50% for the entire year.
Source: Cathay Pacific
