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Cathay Pacific

Hong Kong’s Cathay Pacific reassures staff over revamp of workforce

No figures given but airline says it will create new jobs and redefine others

PUBLISHED : Wednesday, 18 January, 2017, 7:36pm
UPDATED : Thursday, 19 January, 2017, 2:19pm

Cathay Pacific Airways yesterday said “some jobs will no longer be needed” as it unveiled its plan to turn the business around “for change and success”.

Hong Kong’s flagship airline yesterday confirmed the restructuring exercise, while a union leader said the changes would affect only back-office work.

While some jobs would go, others would be redefined and new ones created, it said, but gave no figures. A source familiar with the current plans said the net effect on the overall number of jobs should be zero.

In outlining a review of the business, Cathay cited changing and increasing customer expectations, rising competition, and an unstable global economy. It said these and other factors “have combined to put huge pressure on our business”. “The competition is here to stay and the uncertainty is ‘the new normal’ – we simply must respond,” it said.

Cathay’s business has deteriorated for three consecutive years, even amid falling jet fuel costs. It posted HK$13 billion in fuel hedging losses over the 18 months to June 30 last year. “We need a leaner, simpler structure that is driven by real insights into our customers and their needs and one that will allow us to respond quickly to change,” a spokeswoman said.

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Cathay said 2017 was going to be a year of “significant change”, presenting an opportunity to tackle the “increasingly competitive aviation landscape” head on.

Explaining the rationale for the business review, in an interview published this week in the Post, Cathay chief operating officer Rupert Hogg said his company needed to “become more agile and efficient in dealing with challenges ahead”. He said he was confident it had the right strategy going forward to “survive and thrive”.

Union leader Dora Lai Yuk-sim, representing 7,200 cabin crew, remained positive about the restructuring plans after securing guarantees from senior managers that no frontline staff would be laid off. “There will be job gains, not losses,” she said. “The losses will happen in the back office because it is trying to restructure and have a shared service concept.”

Cathay pilot and Hong Kong Airline Pilots Association president David Newbery said: “We appreciate that, although the airline business, as a whole, is making money, there are serious structural changes that all the major airlines are facing.

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“However, there is nothing in the ... briefing that will change the way we, as pilots, fly aircraft – that is to deliver passengers to their destination as safely and as efficiently as possible. We will wait and see what these conceptual changes will mean in detail.”

Customers are unlikely to be affected by the restructuring, and, according to the airline, stand to benefit from its expansion this year. New flights to Barcelona and Tel Aviv will be added, along with extra flights to current destinations such as Vancouver and Toronto. Cathay will also take delivery of a dozen next-generation Airbus A350 planes this year which will require more pilots and cabin crew.