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Cathay Pacific Airways, the flag carrier of Hong Kong said on Wednesday it would slash 5,900 jobs and end its regional Cathay Dragon brand amid COVID -19. This means some 5,300 Hong Kong-based employees being made redundant, and approximately 600 employees based outside of Hong Kong also possibly being affected.
The Airline also seeking changes to its contracts with Cabin Crew and Pilots as part of a restructuring, which are designed to match remuneration more closely to productivity and to enhance market competitiveness.
Overall, Cathay will cut 8,500 jobs, or 24% of its normal workforce, but that includes 2,600 roles currently unfilled due to cost reduction initiatives.
On Monday, airline said it planned to operate less than 50% of its pre-pandemic capacity in 2021 to stem the cash outflow.
The airline received $5 billion rescue package led by the Hong Kong government in June, but was bleeding HK$1.5 billion to HK$2 billion of cash a month.
The restructuring would stem the outflow by HK$500 million a month in 2021, with executive pay cuts continuing throughout next year, says the airline.
Cathay Dragon, once known as Dragonair, operated mainly to and from mainland China for 35 year had been hit by falling demand before the pandemic due to widespread anti-government protests in Hong Kong that deterred mainland travelers.
“Cathay Dragon, the Group’s wholly owned regional subsidiary, will cease operations with immediate effect. It is intended that regulatory approval will be sought for a majority of Cathay Dragon’s routes to be operated by Cathay Pacific and HK Express, a wholly-owned subsidiary.” said the airline in a statement