Cathay Pacific Airways Ltd. will let go of some 6,000 staff and dissolve regional flyer Hong Kong Dragon Airlines Ltd. as it tries to save itself from the effects of the coronavirus pandemic.
The job cuts will shave 18% off Cathay's total staff, the South China Morning Post says. In June, the company said it was evaluating its strategy in the face of a continued decline in travel demand with very difficult decisions to be announced in the fourth quarter.
That month the Hong Kong government helped secure a $5 billion bailout for Cathay, which has been shedding around HK$1.5 billion ($194 million) to HK$2 billion per month.
The Hong Kong-based carrier initially planned to lay off around 8,000 employees worldwide, but after government intervention trimmed that to 18% - including some 5,000 positions in the financial district.
A Cathay Pacific representative said the airline would not issue any comment based on speculation, despite many sources confirming the terminations.
Cathay Pacific, a source said, would not withdraw from the mainland market and it would maintain its strong position in the regional aviation industry. Another insider said it would try to keep as many Cathay Dragon pilots and crew as possible.
Other carriers like Singapore Airlines have announced proposals to cut 20% of jobs while Australia's Qantas Airways has said it would retrench almost 30% of its pre-pandemic workforce.
Cathay has suffered almost HK$10 billion ($1.3 billion) in losses in the first six months this year and announced in September that it would go broke unless it adapted to the new normal.
Meanwhile, Cathay expects to provide less than 50% of its normal capacity in 2021 as most airlines continue to be battered by the pandemic. The forecast depends on the availability of a COVID vaccine by the middle of next year, the airline said.
