Cathay Pacific Announces Major Corporate Restructuring
Hong Kong’s flag carrier Cathay Pacific on Wednesday announced a major corporate restructuring in response to the impact of the COVID-19 pandemic on the aviation industry. The airline will be forced to cut a quarter of its workforce and retire the Cathay Dragon.
Cathay Pacific Major Corporate Restructuring
The Cathay Pacific Group has announced a corporate restructuring in response to the impact of the COVID-19 pandemic on the aviation industry. Because of a drastic drop in its traffic numbers caused by the pandemic Cathay will park 40% of its passenger fleet overseas and begin a corporate restructure. In order to stay afloat, Cathay is planning to cut a quarter of its worldwide workforce and Hong Kong-based cockpit and cabin crew members are being asked to accept pay cuts. Cathay Dragon, a subsidiary of the Cathay Pacific Group will immediately cease operations. After approval, Cathay Dragon routes will be operated by Cathay Pacific and HK Express.
Cathay Pacific Chief Executive Officer Augustus Tang said in the official press release:
“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.”
Major elements of the restructuring include:
-Cathay will reduce around 8,500 positions across the entire Group, which accounts for around 24% of its workforce. Because the airline implemented a recruitment freeze and natural attrition, the actual number of jobs lost was reduced to 5,900
-Cathay Dragon, the Cathay pacific Group’s owned regional subsidiary, will cease operations with immediate effect. It is intended that after regulatory approval a majority of Cathay Dragon’s routes will be operated by Cathay Pacific and HK Express.
-Cabin and cockpit crewmembers of Cathay Pacific that are based in Hong Kong will be asked to agree to a pay cut
-Special Leave Scheme for non-flying employees will be introduced for the first half of next year
-Cathay Pacific will be offering severance packages for all the employees affected by the change. The airline will also be extending medical benefits and staff travel entitlements, as well as providing counseling and job transition support services