Despite current woes, Cathay is crucial to city’s long-term future
- Hong Kong’s flagship carrier is undergoing a painful restructuring, including lay-offs and the scrapping of the Cathay Dragon brand but, sadly, the loss of thousands of jobs is necessary for its survival if it is to meet the challenges ahead and maintain the city’s role as a regional aviation hub
Saving Cathay Pacific from the global pandemic downturn was always going to take more than a huge government handout.
The transfusion of nearly HK$30 billion of taxpayers’ money four months ago bought time for the airline to formulate a plan for the survival of a severely slimmed down operation acceptable to the government. It produced a blueprint yesterday that is brutal but could have been worse.
The blueprint abolishes 8,500 jobs globally, including 5,300 redundancies in Hong Kong, and closes the Cathay Dragon operation, an iconic Hong Kong brand.
However, under pressure from the government, and after taking into account a hiring freeze and voluntary retirements, the shrinkage of the 35,000 global headcount was cut from 24 per cent to 18, smaller than the industry average of 20-30 per cent staff cuts.
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Cathay Pacific Airways announces its largest job cuts in history
The stakes are high. The Basic Law compels the government to maintain Hong Kong as a centre of international and regional aviation. Cathay is pivotal to compliance with this requirement.
Cathay CEO Augustus Tang Kin-wing said the airline would not survive without the job cuts. They are part of a HK$2.2 billion restructuring forced by a 99 per cent collapse in daily passenger volume after most of its fleet was grounded by border closures and quarantine rules.