Nearly all Cathay Dragon staff to lose jobs in cuts, as boss apologises and says focus must be on ‘world-leading’ Cathay Pacific

Nearly all Cathay Dragon staff will be made redundant under the job cuts announced by its parent company Cathay Pacific Airways on Wednesday, as chairman Patrick Healy apologised for the “great distress and anxiety” the move had caused.

Around 2,000 cabin crew, and about 550 pilots working under the Dragon brand were expected to lose their jobs, the airline said, adding that across the group in Hong Kong 4,000 cabin crew, 600 pilots, and 700 ground staff and head office positions would be cut.

Just 10 Dragon pilots had been kept on to train future Cathay Pacific pilots on new single-aisle jets, a source said.

Cathay to eliminate 8,500 job posts globally in HK$2.2 billion restructuring

Earlier, Cathay announced it would eliminate 8,500 job posts globally in a HK$2.2 billion (US$284 million) restructuring, and close Cathay Dragon with immediate effect. The move would lead to 5,900 staff being made redundant, with 5,300 of those based in Hong Kong.

Healy said the airline group had done everything it could to avoid the cuts, but they had to be made to “secure the survival of this incredible 74-year-old company”.

“The decisions we have announced today will cause great distress and anxiety for a large number of our people and their families,” Healy said. “For this we are truly sorry.

“We have thought long and hard over recent months, we have examined diligently all possible ways forward, and we have come to the conclusion, reluctantly, that today’s decisions must be made to … secure the survival of this incredible 74-year-old company.”

Healy said Cathay Dragon was being sacrificed so the company could focus on creating a “world-leading travel brand in Cathay Pacific”, and a single “low-cost leisure brand in HK Express”.

The chairman called the decision to part ways with “such a large number of our outstanding colleagues heart-wrenching … and nothing would give us greater pleasure than to be able to hire back the people we are losing today when we return to growth in the future”.

Cathay Pacific shares jump on restructuring plan, 8,500 job cuts

Cathay Pacific secured a HK$39 billion bailout in June, with a HK$27.3 billion injection from the Hong Kong government preventing its collapse amid the turmoil of the coronavirus pandemic.

But Healy said the future remained highly uncertain, and called the crisis “deeper, and the road to recovery slower than anyone thought possible just a few short months ago”.

Amber Suen, internal vice-chairwoman of the Cathay Pacific Airways Flight Attendants Union, said she was “completely disappointed with this decision”.

“We have talked to the company on the reason why they haven’t implemented any voluntary unpaid scheme before they made the decision, but then the company said they simply are not able to do so,” she said.

Union chairwoman Zuki Wong said the group had not called for any industrial action and was focused on helping colleagues come to terms with the news.

Staff morale has been low for quite some time now, so now the situation is pretty bad,” she said.

Cathay Dragon operated 48 aircraft to 51 destinations and was the crown jewel in the airline group’s network flying to 23 mainland Chinese destinations. Dragon operated most of Cathay’s roughly 370 weekly flights to the mainland.

Cathay Pacific’s cargo business said with the shutdown, it would not be able to carry cargo to destinations such as Fuzhou, Guangzhou, Kuala Lumpur and Fukuoka.

However, the airline would only operate special freighters to Xiamen, Chengdu and Hanoi, but could not use Cathay Dragon passenger aircraft in the near term, the cargo unit said.

“The cessation and the discontinuation of the Cathay Dragon brand absolutely does not mean we are turning our back on the network that was previously serviced by Cathay Dragon. It will be our intention for Cathay Pacific and HK Express to apply for traffic rights and slots to those destinations,” Healy said.